Address: 1 Buellton, Irvine, CA 92602 (Northpark)
Plan: 4133 sq ft – 5/5
MLS: S438082 DOM: 158
Sale History: 11/14/2005: $1,550,000
2/21/2002: $786,500
Price Reduced: 06/11/06 — $1,769,000 to $1,739,000
Price Reduced: 06/25/06 — $1,739,000 to $1,709,000
Price Reduced: 07/24/06 — $1,709,000 to $1,699,000
Price Reduced: 09/10/06 — $1,699,000 to $1,675,000
Current Price: $1,675,000
We found out about this flip from an anonymous tipster (Thank You!). This huge Plan 3 in the Huntington tract built by Richmond American in 2002 sold for about 100% more in 2005 and came back on the market 5 months later in April 2006 for even more. The original owner made some great money on this property in those 3 1/2 years from 2002-2005. The original owner was able to move this property from listing to escrow in 9 days (see MLS S413640)! That’s FAST considering it was late 2005 at the time. Great timing huh? The original owner also sold for $45,000 less than the original listing price of $1,595,000. Motivated seller huh? Perhaps.. but accepting a price $45k below asking after only 9 days on the market just doesn’t make sense.
That is… until you find out the original owner is a RE broker and represented the new buyer. This broker was more than glad to reduce the price by 3% since he wouldn’t have to pay a commission to another agent.
Let’s look at the new buyer. From what I can gather, the new buyer has loans totaling $1,469,500 – which INCLUDES a $307,000 loan from the original owner/RE broker! The original owner/RE broker really had to put in some effort and $$ to make this deal come together. A $1,469,500 loan on a $1,550,000 property is just absurd! That’s a 95% financed purchase! Any idea what would happen if the new buyer can’t make the payments?
Now the new buyer listed the home 5 months after they bought it hoping for a quick 200k profit. That’s definitely not happening. You can tell they realized this and started reducing the price. The first two price cuts were 30k each but after that you can see the hesitation in reducing the price further. IF sold at the current asking price of $1,675,000 they will make a profit of $24,500. We’ll have to just wait and see what happens here.
holy cow that is such a small profit for such a big risk. i wonder what the end net will be……
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funny thing is that the $786K sale price in 2002 was bubbly to begin with. I recall being gunshy at that time to buy, despite plenty of income and prodding from my real estate agent sister-in-law. She proceeded to brag about how much money she has made, both on her home purchases and on her commissions. she ain’t braggin now. I didn’t want to buy then, it struck me as too risky — that the tech bubble meltdown and the 9/11 shocks hadn’t played out. felt like an idiot for the past couple of years but can finally say that my wrong way bets are going to payoff. i want these flippers to burn and burn good. $786K is coming back, hallelujah.
The original owner made $700k for nothing. Money out of thin air! Why work? Let’s just sell houses back and forth to eachother.
Crazy.
Thanks for following up on this! Looks like the broker listed because s/he knew the market was starting to turn, found his GF, gladly took the 3% drop in price rather than pay a commission to another agent, and walked away with a fat profit. Now the GF looks like a FB.
Another plan 3 just came on the market (20 Buellton) asking $1,699,900. Even though this one appears to be on a better lot, I can’t beleive the owner listed it for more than the other FB when that one has already been sitting for 158 days. This one was bought on 8/19/05 for $1,480,000 according to Zillow.
Maybe we’ll have an interesting race to the bottom between these two!
The Million+ market is always seems more daffy. Lots of re-lists, price gyrations, other attention grabbers.
15 Malibu, my “exotic entertainer” flip went AWOL. I wonder if a GF was found.
Thanks again for the tip anonymous. It’s fun when you find out there’s a little bit of a story to all of it. 20 Buellton has more wiggle room and it seems they only have 700k in loans. We’ll have to keep an eye that one too.
OC Fliptrack,
15 Malibu went under contract a little while ago. I posted it on your blog, but you probably missed it since that post was a few days old by then.
Zovall,
Thanks for giving us the background info on your blog. It is really interesting.
We moved here from back East. We sold our townhouse that we owned since ’98 in July and are renting here until we see what the market does and figure out where we want to live.
It is very scary for me to buy in CA because there doesn’t seem to be as much information readily available as there is in MD. There you can check on the MD Department of Assessment and Taxation Site (http://sdatcert3.resiusa.org/rp_rewrite/)for prior sales over the last 4 years (last 3 + calandar) or you can search by specific property. They then show you information about the house including: last several sales, sq. ft. of house, sq. ft. of land, year built, taxes, etc.
When we were considering buying there, I used it to check potential properties to see if they were flips. I would also check other houses on the street or in the neighborhood for comps. It took a long time, but if we were going to spend that much money we wanted to be fully informed. Also, I don’t like to rely on RE Agents or other interested parties.
If you could take a quick look at the MD site (just put in any county and address off a map) and let me know if similar info is available online in CA, I’d really appreciate it. I found the MD site because the local paper printed recent sales and quoted the MD Dept. of Assessment and Taxation as its source. Here, the OC Register provides only the most recent sales and does not give a source for where to get this info.
Sorry for the long post. Thanks again for starting this blog. It is really helpful for those who want to buy and live here.
Can I post a link here? Let’s try:
http://tax.ocgov.com/tcweb/search_page.asp
Or maybe this link.
Dunno if this works… There’s no preview function.
OC Fliptrack,
Thanks for the link. I put in the address of the place we are renting. All I can find it the assessed value and taxes due. It appears the assessed value is a little higher than what the owner paid in December 2004 (according to Zillow). But, I can’t find the other info available in MD, like sales history, sq. ft., etc.
Is this info available online in CA? Am I just missing it?
Thanks!
I suspect that this information is not available online. I’m almost certain that it *is* public record, though.
Zovall,
This one is no longer listed on OC Register’s Real Estate Finder. Could you do an update and see if it actually sold or was just taken off the market?
Thanks!
The listing has expired and the private remarks say “AGENT PLEASE DO NOT CALL OWNER. PROPERTY WILL BE RELISTED. THANK YOU”
I’ll try to keep an eye on when it comes back on the market.