This does not sound like a good investment, CB. That $40,000 could easily be $60,000 once the work starts.
10 Wooded Area
This is the house on a very busy traffic corner. I drove the house again today to give it a 2nd chance. It didn’t get any better - it got worse. Even during ‘slow traffic’ time of day, the road noise was really loud. House too small and no yard. My agent reviewed it and says NO.
3766 Warner St 92106
14 Victorian in Wooded Area
There is a house in wooded area that has tons of character. Gorgeous woodwork on the inside and good siding / wood trim on exterior. Desireable area, but small lot for the neighborhood. This house has fallen out of escrow twice and just came back on the market. As I was driving up to the house I saw a friend outside who lives across the street. She told me that the house is just wood walls, no insulation and that a giant sinkhole appeared in back yard from recent rains.
House is really cute and has potential. I would need to add a little bit of square footage because the downstairs bedroom is too small. Kitchen/laundry/bath have to be completely changed around to open up the house and take advantage of access to the back yard. Sink hole doesn’t really look like a big deal to me (but what do I know!!). Agent and/or sellers have put a piece of wood over it.
It is currently priced too high to make it a feasible project. My agent is going to research what future value might be.
15 La Mesa
There is a property that has been on the market over 60 days that is in 1970s condition. Large house, big flat lot, but no views. Superior location in the foothills below Mt Helix. I called up the agent and there have been no offers. My agent thinks it may not fetch more than $700k and I need to be careful because it is not extremely special.
I have asked the listing agent to send me comparables to estimate future value. I’m planning to do my numbers and then call her back to discuss a possible offer. Don’t want to waste her time showing the house if we aren’t even close.
cb, the one on Warner St is cute and has potential, but not if it’s on a busy corner. Too bad.
It sounds like things are picking up, however. This is good news.
I don’t know what sink holes are like in California, but here in PA they can be a nightmare. You can fill them up, but then they sink again. Some people have had to fill the sinkhole with cement. Again, our issue here is limestone that dissolves with too much water, and the conditions in California are probably different. But I just wanted to give you a different perspective.
We have sandy or clay soil. My guess is that there is maybe a broken irrigation pipe under there somewhere
14 Wooded Area Victorian
My agent and I ran all the comparables and there is no margin. I will not be able to pursue it. Price would have to drop substantially
15 La Mesa
I ran the comparables and called the agent. She says the Sellers are not very negotiable so I am not going to pursue further.
That’s a shame. Very frustrating for you, I’m sure. Seems like everyone thinks the market is going to repeat last summer’s intensity.
The more you see what’s out there, the wiser you get about what to offer, what to invest in, and how much to do to a house. It looks like dead ends, but it’s all useful information.
Sounds like there have been lots of houses to choose from, coralbrook. So there will be a perfect diamond in the rough that you will find.
12 Pt Loma
I went through the house again yesterday. I wanted to carefully analyze the walls that have to be moved and how to reconfigure the interior. I was concerned about how much view there really is from the home. I stood in several places and made decisions on how to reconfigure interior to maximize the views. If I knock out some walls and move the kitchen, the kitchen and living areas will enjoy expansive southerly views. Then I would take the back portion of the house and create a large master suite that will have northerly views over Mission Bay (although the views are over the alley in the back).
This gave me a comfort that there is a way to maximize the views. I have asked the agent to send me a comparable analysis of future value and they have been stalling. I get this situation a lot… agents do not want to be in a position to say “I can get you $1.4 million” and then possibly be liable for that statement later in the future when the house does not sell. He did say that, if the house remains at the same square footage, it is very hard to find a comparable that sold recently at the same size that would justify a really high price. Then he started giving me the soft sell that “if I listed with them, they are sure they could get $1.4 million”. And then started in on how they would market it and all this ‘international marketing’ baloney. I’m not convinced that it makes any difference about international marketing. If someone in China was looking for a view home in San Diego… they are searching the Internet and everything is out there. I knew this was coming… trying to get me to agree to let them list in the future. I had warned my agent about it and had a discussion with her about how I could be put into this position in order to get the house.
He then continued to tell me that they really felt that my offer was the ‘cleanest’ and that the house really needed to have a clean offer because of the issues. He confirmed what I thought… other buyer has a Counter Offer back to them with all of my terms (no contingencies) and the asking price. I fished around to try to find out who is making the other offer. I know that it is an investor who is ‘local’ and has ‘3 to 4 other projects’ going in the neighborhood.
This gave me just enough information to go back and put on my Snoop Dog Snoopy hat and start researching. I know exactly who submitted the other offer (by putting a lot of pieces together) and this guy makes mistakes. He is currently sitting on some McMansion he built that has not sold for over 5 months because his asking price is way too high. Keeps dropping the price continuously (It is not the Newell/Byron investor… another one). As far as I can tell he does not have “3 to 4” projects going… he is desperately trying to sell this speculative build. I don’t see a history of him purchasing houses at asking price so I will be surprised if he signs the Counter Offer at the high price.
The reason I researched this very carefully is because I know several investors in the area that are very smart and they get their hands on good properties and make huge money. But, they all scrape the house and build new, or at least add a lot of square footage. If I knew it was one of these guys I would know that it is worth whatever they would pay for it and I might go hard to get the property.
I’m not going to follow this particular investor down a rabbit hole.
I did propose something a little creative. If the Sellers are really stuck on their asking price, I am willing to offer the high price with $$$$ in credit for repairs. Doubt if it will fly, but it’s a shot.
Meanwhile, as an example of how old houses in that same pocket neighborhood as some of those others we were looking at earlier just fly off the shelf at ridiculous prices…sold before it ever went on the market (and sold by an agent who is not local which I find interesting)
4436 Alhambra 92107
3/1 998sq ft $899k
That’s $900/sf
No view… but superior location
Long time lurker on all your threads. Love them & it’s the only reason I read here anymore. Was sick with a cold yesterday so I watched HGTV all day (which I never do). The Flip or Flop show is entertaining but I think they need you!! They don’t seem to research their properties very well and seem to end up over budget a lot. And several of the episodes were left hanging with offers falling through so we’re never told when and what price the properties were sold for.
I like the Property Brothers show more. They seem more realistic and entertaining. Living in coastal CA though I marvel at the low prices for housing in many other areas of the U.S.
Good luck with your search
$900/sf?? Yowza!!
cb, it sounds to me like you are very invested emotionally in #12 Pt Loma. You’ve devoted a lot of time and energy to thinking about what to do to the house and how to make the deal work. I hope the seller realizes that your offer is as good as it’s going to get. And I hope the other investor walks away.
Does it seem like they’re trying avoid listing the Pt Loma house on the MLS? Do they figure most of their potential buyers already know about the house? Or are they not allowed to list with current offers under consideration?
Odd man out here…this PT Loma property has a lot of issues. Maybe it’s an omen it’s not falling into place mire easily. I mean already the amount to fix the slope is $40,000 rather than the $15,000 CB originally thought she could budget…and that $40,000 is assuming no other issues are unearthed (sorry for the pun) when the work begins,
The reasons I think they are not listing yet are…
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the listing agent knows that it is probably going to have to be an investor. Too many major issues to get a purchase financed through a regular bank because of appraisal and condition. If it was listed in MLS there would be a flurry of buyers coming through and submitting all kinds of offers that would never really close escrow.
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The holdout son is still living in there and he has a bunch of crap strewn all over the house. My understanding is that the sisters feel sorry for him and don’t want to inconvenience with showings, open houses, etc.
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House is dirty. They were going to waste their time cleaning the house and painting the interior. The son volunteered to live in the house and do all of these tasks. He has been there 6 weeks and it has only gotten worse. Nothing cleaned or painted.
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Their listing agreement specifically states that property stays off the MLS for 30 days. This is probably because of the cleaning out and occupancy status.
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Listing agent wants to try to find his own buyer and get both sides of commission. This is just the reality of the business.
I watched the new episode of Flip or Flop last night (I think it was new) where they purchased a house in Costa Mesa directly from a family - never listed. Somehow they got it for $70,000 less than what the family wanted, although $40,000 is savings in commission. I felt that this show was very realistic. They went way over budget (just like what happens to me all the time) and they had to do hard money loans. The loan costs stated were realistic and accurate. This added $8,000 origination fee and $100/day in interest costs. Then it appeared to take them 3 months to finish the project which is much more realistic than these flips that people seem to do in less than 30 days.
I thought the remodel was nice, and the remodel costs were much more realistic than some of their previous shows. For example, they keep walking into houses and the contractor says “$35,000” for a complete gut. Really?? No Way!! This time the guy said $90,000 (and they still went way over).
In the end, the total cost was very close to what they originally stated was the future value/comparables for the sale - $925,000. But, somehow they just magically pulled $1,149,000 out of their hat for the asking price. It took 30 days to sell it (which is another $3,000 in loan interest). This is the part that amazes me. How can they just list their properties for so high and actually get the sale?? I need some of the stuff they are smoking.