Remember this *distressed* oceanfront home that I blogged about?
Well, someone scooped it up. Here's the email I received from the selling broker:
I just wanted you to know that 550A Jerusalem Rd was recently sold to an investor who is currently fixing the property up and it will back on the market in about a week. The property will be back on the market at, or close to the assessed value (890k). Please let me know if there is any interest in viewing the property once its completed.
Is this guy serious? $890,000?
The house was sitting there at $750,000 and it only needed, by my rough calculation, about 50 grand worth of work. Furthermore, much of that was cosmetic. The house was quite livable as it stood. Improvements could be made over time.
I had to ask (and feign interest):
yeah thanks for the update. i did see some worker types milling about on the property. my wife was intrigued by the house. in fact i took her up there for a walk around the grounds.
can you tell me what the buyer paid for the house? and roughly what he plans to fix? thanks.
Here's his response:
The buyer closed yesterday, he paid 675k and it was a cash deal. As far as improvements he plans on putting in about 75k. The wall and the driveway( which was completed yesterday cost him about 35k), also the entire house inside/outside is being painted, the front door and back door are being replaced, there were new gutters put on the house, the floors are going to be re-sanded, most of the light fixtures are going to be replaced, there is a full sheet of granite going over the dated fireplace, new railings are being put on the front stairwell, and lastly, with a full price offer of 899k the entire front yard will have new sod( 5200sf) an irrigation system installed, and another circular driveway put in which can be accessed from the hillside of Jerusalem Rd. Please let me know if you want to see it before I put it on the market.
A new railing, sanding floors, new light fixtures, and wall paint....those were not reasons for this house languishing 100k+ below where this intrepid speculator aspires to sell this *falling knife*. (Yes, the eroded driveway was a little complicated. But surely I could have found someone myself to fix it for the bargain price of $35,000.) I think this buyer was watching too many HGTV reruns from 2005!
$675,000 was a good price to buy this house, BUT not for a flip, not in this market.
With a $50,000 real estate commission looming plus the 75k of improvements, $800,000 is this flipper's breakeven point. I predict he owns it for quite a while.
Too bad....who wants an extra beach house with the summer nearly over?
UPDATE - It's official, house just hit the market at $899,000 on July 24th.
UPDATE - July 30th, price dropped down to $875,000. The seller didn't even give it a week. The open house on Sunday must have been an *empty house*.
UPDATE - August 7th, price reduced to $849,900. Hah, it's only been two weeks!
UPDATE - August 21st, price reduced to $829,900. So as of right now, this *speculator* risked 750k to make 30k. Doesn't sound like any odds I would enjoy playing.
UPDATE - September 30th. Boy, this didn't take long - price just dropped to $809,000. Guy must be watching the stock market (-777 pts yesterday).
UPDATE - October 7th. Down to $799,900. We're at breakeven, officially.
UPDATE - October 24th. Down to $779,000. Now a loser. Great investment pal! link
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