[quote=sdrealtor]The camino serbal is in a tract of similarly priced properties. It is on the higher end of the tract which has 1050 homes in it. It is not gated. The homes in the tract were built between 98 and 2003. If I remember correctly in 2001, homes in this tract went between 400 and 700K depending upon size, builder and upgrades. No home built in this tract is worth less than it originally sold for, not even close.
To answer your question HOA fees there were about 87/month which included pool, gym, tennis, parks, walking trails, country club calibur club house and the top scoring school in the district located a short walk from most homes. MR is $800. If you added in PITI plus HOA fees on a $500K mortgage for the house plus taxes, insurance hoa etc you would still be around equivalent rent for a house like that. You cant live in a CD last time I checked….[/quote]
Acc to nearby listings on SDLookup, HOA fees for this subdivision now show as $103 mo. Not sure what they have been since 2001 so will just make a guesstimate here:
120 mos (10 yrs) HOA dues = $11,000 (avg of $91.67 mo HOA dues investment)
$800 x 10 yrs + $8,000 MR investment
Purchase price $633,000; $133,000 downpayment
50,000 landscaping investment
Closing costs at time of purchase (9/01?) $6,000
Closing costs for 3/04 refinance $6,000
Total cash investment over 10-yr life of ownership (not incl maintenance): $214,000
Selling price (10 yrs later) $1,000,000
“Annualized return” 16.66%
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Necessary carrying costs for ROI (we’ll call it “rent”):
Taxes = $655 mo (avg of 111 mos – tax basis = .010785)*
Insurance = $111 mo (average of 1/12 of 10 years’ premiums)
Total taxes pd over life of ownership: approx. $72,730.00*
Total ins prems pd over life of ownership: approx $13,320.00
$500,000 mortgage (“jumbo” – FNMA conforming limit was $275K in 2001). Prevailing jumbo fixed mtg rate in Q3 2001 was about 7%.
Monthly P & I (11/1/01 to 3/1/04 – 29 mos) = $3,326.51**
Total monthly P&I for first 29 mos = $96,469.79**
Tax records indicate seller refied in March of ’04 so beginning May of ’04, seller’s new 30-yr fixed rate will be 5.5% (“jumbo” – FNMA conforming limit was $333,700 in 2004). New mtg will be $492,606 (based upon lender demand of $486,606 + $6,000 [addt’l] closing costs wrapped into it).
Monthly P & I (5/1/04 to 9/1/11 – 89 mos) = $2,796.96**
Total PI for months 31 thru 120 = $248,929.44**
$345,399.23= Total PI pd for life of ownership (not incl amt shown on HUD 1’s at closings)
$431,449.23 = Total PITI for life of ownership (we can call this “rent” or “oppty expense”). It breaks down to $3741 month over 118 months.
Maintenance expense is not included and unknown. MID benefit to this seller is unknown.
*MR is subtracted from mo property tax exp and used as a “cash investment.” Assumes seller took the HOEX every year of ownership. Assessment raised 2% annually pursuant to Prop 13. For first 9 mos of ownership, seller is charged a supplemental bill only (portion of prior owner’s bill).
**Mtg terms and closing costs based upon seller qualifying for prime mortgages at time of mtg origination and refinance.
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What is interesting to me here is that it would have taken a household with an approx. $11,500 mo verified gross income to qualify for this mtg back in 2001 (assuming the buyer had zero consumer debt). This assumes ratios of 30/38 used by lender. And the buyer would have had to have $139K in cash at that time to close escrow ($133K downpayment + $6K closing costs).
sdr stated this property was not representative of the norm in 2001 for 92009 (it was higher-priced). I’m curious what the average selling price was for a SFR in 92009 in the year 2001.
Camino Serbal wasn’t an investment that Joe 6P, me or the avg Pigg was able to make back in 2001, IMHO.
I will note that 2001 was PRIOR to the “millenium boom” era of “loose lending.” I will also note that CD’s don’t have “rent expense” or “oppty expense.” One can live in a studio or 1 BR apt, a relative’s back BR or a mobile home/RV and invest in a jumbo CD (and many seniors do)!
Just laying it all out there for the Piggs to much on . . . pls feel free to comment on or challenge any or all of this.
