I am introducing an new honor at the Irvine Housing Blog: the Knife Catcher Award. This dubious distinction goes out to all the knife-catchers stupid enough to attempt to flip a property in this declining market.
As you can see the knife-catcher is poised to eviscerate any greedy flipper with a death by a thousand cuts: a slow bleed of monthly cashflow and depreciation. To be eligible for the knife catcher award, the property must be put for sale within 6 months of purchase, and it must look like it has little or no chance of success (admittedly, the last hurdle is not very high).
One would think properties put for sale immediately after purchase would be difficult to find. Some may be bank repossessions, but some are simply delusional kool-aid drinkin’ fools who really believe this “softness” in the market is temporary and they are betting on the speedy return of double-digit appreciation. There is a special measure of schadenfreude for these fools worthy of unique honor on this blog. So without further delay, our first knife catcher award goes to…
Asking Price: $567,900
Purchase Price: $505,750
Purchase Date: 2/13/2007
Address: 162 Hayward, Irvine, CA 92602
Beds: 2
Baths: 2
Sq. Ft.*: 1,550
Year Built: 2002
Stories: 2
Type: Condominium
Neighborhood: Northpark
$/Sq. Ft.*: $366
MLS: P570133
Status: Active on market
On Redfin: 20 days
From Redfin: “Beautiful townhome in Northpark with cathedral ceilings. Turn key condition with fireplace in living room. Balcony and windows provide great view of area. Large kitchen. Separate laundry room. Huge two car garage with direct access. Separate formal dining room next to kitchen. Private large master bedroom. Lots of storage throughout. Floor plan is excellent. All the rooms are large. Northpark has many amenities for all ages. Quick access to freeways and shopping.”
This flipper couldn’t even be bothered to replace the tile counters with granite. The unit appears to be empty, so the bleeding has already begun. I have to wonder if this isn’t a realtor or a bank. If this seller pays a full 6% commission, they only stand to make about $28,000. IMO, it doesn’t seem worth the risk. However, if it is an agent paying only half a commission, this could net them $50,000 in just a few months making it at least worth dreaming about.
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Today’s knife catcher award is a double feature as a neighboring property is also a 2007 flip…
Asking Price: $590,000
Purchase Price: $545,000
Purchase Date: 1/31/2007
Address: 259 Lockford, Irvine, CA 92602
Beds: 2
Baths: 2
Sq. Ft.*: 1,496
Year Built: 2002
Stories: 3
Type: Condominium
View: Mountain
Neighborhood: Northpark
$/Sq. Ft.*: $394
MLS: U7001632
Status: Active on market
On Redfin: 7 days
From Redfin, “Auburn at Northpark community. Great end unit location directly across from the pool and park. Dramatic 20 ft. ceilings, and decorator touches. Upgraded sile stone counters in kitchen which is open to a great room, great condition, ceiling fans, windows in 2 car tandem garage. Office area outside master bedroom. Home shows well and has easy access for viewing. Washer, Dryer and Refrigerator included. Wonderful gated community with basketball courts, parks and nature trails. For lease also @$2500”
Another treasure trove of interesting information. My first observation is the price to rent ratio of 218 — assuming this floplord could actually get $2,500 a month. I doubt they will get that much rent as there are many better properties in better neighborhoods for less. My guess is a rent ratio of 250 leaving a $2,180 rent is more realistic. Since this flipper has fantasies, let ’em dream. Also, because it is being offered for lease, this isn’t a bank REO.
Another item I found interesting was the photographs. Notice the 2006/10/31 date? It is possible the buyer took these photos and later used them in the MLS listing, but is is also possible these photos came from the previous listing and the same realtor is involved in both transactions. These photos were taken 3 months before the closing, so it was either a very patient buyer, or these were realtor photos.
So there you have our first knife catcher award. In the future, you will know these special flips by the knife catcher image next to the property breakdown as it was displayed above. If anyone notices when these sell or rent, please email me at irvinerenter@irvinehousingblog.com and I will be sure to update everyone on the carnage.
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BTW, Redfin updated its look last night. Check it out.
I like the idea of the Knife Catcher Awards 😉
On 162 Hayward, you’re right. It is the bank. It was purchased on 8/30/2005 for $600,000 using 100% (80 first/20 second) financing. The lender for both loans was Argent Mortgage. On 2/13/2007 it looks like the Lender ended up taking it back. On the Trustee’s Deed Upon Sale, it says the Amount of the Unpaid Debt was $505,750.67 and the Amount Paid By the Grantee was $505,750.67. Now the owner is listed as: DEUTSCHE BANK NATIONAL TRUST CO, ; ARGENT MORTGAGE SECURITIES INC,.
Private remarks for 162 Hayward: FORECLOSURE property being sold in an ‘as-is’ condition. Seller will not provide a survey, condition inspection, or home warranty. Seller makes no warranties, expressed or implied, as to the condition of the property or the presence of any hazardous substances.
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IrvineRenter,
*162 Hayward is in escrow as of 4/18/2007.
*259 Lockford should be off the market in the next few days.
I will keep you posted.
Wow, hopefully no where near asking price.
I like the Knife Catcher symbol
Very appropriate for what’s to come
*162 Hayward is in escrow as of 4/18/2007.
April 2007 is this is new owner’s Nasdaq 4500.
Quail hill hammered:
48 Paperwhite, Irvine, CA 92603
06/2006 sold at 888K
03/2007 sold at 750K
Another one sold at 1725K last year, 04/2007 sold at 1500K
06/2006 sold at 888K
03/2007 sold at 750K
9 months later, and a $138k loss to show for it? That’s alot of money to people who work REAL jobs for their income. Do that enough times, and it’s gonna leave a scar. Although that’s just a superficial scratch compared to the sucking chest wound their pocket book will experience if similar FBs hold on to the property and try to sell, 2 years from now….
Another one sold at 1725K last year, 04/2007 sold at 1500K
Wow! $225k? I know, that doesn’t seem like very much, unless you think of it as ‘real’ money (instead of the funny money the banks have been loaning for the past 6 years). Oh, you say it IS real money? 🙂
Yeah, I love the knife catcher symbol: kind of like a dream catcher, only uglier and more painful since it’s driven by greed. 😉
Could you provide more information about 48 Paperwhite? who is the listing agent and
why is it back in market in 3 months?