Let’s adjust these numbers for inflation and transaction costs. The CPI numbers are available here by month.
If you subtract the common 6% transaction cost for broker commission and deflate the remaining money to purchase month/year equivalency, 50% of those deals lost money.
1646 Tennis Match Encinitas 6-03 499K 12-06 627K LC (less commission “clear”) $589 DD(Deflated Dollars equivalence) $537. A winner with CAGR of 2.1% above inflation.
4503 Sierra Morena Carlsbad 7-03 440K 12-06 509K LC $478, DD $437. First loser, but not bad, basically break even. Hopefully his mortgage was cheap.
2876 Vista Acedra Carlsbad 1-04 800K 12-06 905K LC $851, DD $782. Loser $18K in Jan 2004 dollars or about $20K in todays dollars.
9276 Birch Spring Valley 11-04 475K 12-06 640K LC $602, DD $570, our Big Winner. Provided they didn’t rehab the property.
6151 Veemac La Mesa 6-04 398K 12-06 REO 410K Hey, it’s REO, obviously the owner lost. But the bank… Well, in June 2004 dollars that $410K is only $386K. If they paid a commission, all the worse, LC $385 DD $362. Ouch looks like even the banks lose.
2407 Sweet Sage Chula Vista 3-05 726K 12-06 820K Alright, a nice quick flip for $100K, but… LC $771, DD $739. Well, any profit is a profit. Hopefully they didn’t do anything to the house, because lately, even $45K of paper profit gets eaten quickly.
