Pacific Beach market question

[jpinpb]

I am once again amazed and confused. Probably more of another rant, but I sure could use an explanation.

I was watching this place for sale in P.B. MLS# 086002359 1319 Emerald St. I’ve seen it on and off the market for quite a while, like 2 years. But apparently, it got sold 06/11/2007 for $625,000.

Very shortly thereafter, it was put on the market again, then removed, then relisted 01/09/2008. Beds/Baths: 3 / 2, Square Feet: 1,286, Lot Size: 6,300 sf. Was EMPTY. I doubt it was lived in for the 2 years it was off and on the market. They redid the inside probably 2 years ago w/granite, etc, fixed the front and back yards. It was pretty nice. But the last time it listed SWEOB $699,000-$729,000.

With all the defaults and foreclosures and tightening of credit, I thought unlikely it would sell for that. Probably less and not for a while. It went pending and I was watching to see if it would be BOM b/c of tightening of credit standards and people not qualifying.

Well, it sold for 710k. I’m a little surprised, frankly. It’s on Craigslist for rent for 3k. I just don’t understand. Must have been purchased by an investor, but even if the person gets 3k a month for the place, WTF. How much is he putting down or putting out every month? I mean, ROI makes no sense here.

Everything I read seems so ominous for real estate, yet when I see a sale like this, I really think I’m losing my mind and I’m missing something here. I realize it’s the coast and I don’t think it’s immune, but that it will take a while for prices to come down some. But when I see someone flipping still like this, then I just can’t get my mind around it.

[Doofrat]

It makes total sense and here’s why:

Take $710,000 minus $80,000 down payment that you got from a home equity loan. You now have $630,000 financed.

Take $630,000 and multiply it by 5% interest which equals $31,500. This is the interest you pay. Add a little more, (lets say $4000 for principal) which gives you a total payment each year of $35,500.

Divide $35,500 by 12 and it equals a monthly payment of $2958.00.

They are asking $3000 for rent. It just about evens out.

Don’t like my math? Neither do I, but this is the way people think.

[Doofrat]

It makes total sense and here’s why:

Take $710,000 minus $80,000 down payment that you got from a home equity loan. You now have $630,000 financed.

Take $630,000 and multiply it by 5% interest which equals $31,500. This is the interest you pay. Add a little more, (lets say $4000 for principal) which gives you a total payment each year of $35,500.

Divide $35,500 by 12 and it equals a monthly payment of $2958.00.

They are asking $3000 for rent. It just about evens out.

Don’t like my math? Neither do I, but this is the way people think.

[Doofrat]

It makes total sense and here’s why:

Take $710,000 minus $80,000 down payment that you got from a home equity loan. You now have $630,000 financed.

Take $630,000 and multiply it by 5% interest which equals $31,500. This is the interest you pay. Add a little more, (lets say $4000 for principal) which gives you a total payment each year of $35,500.

Divide $35,500 by 12 and it equals a monthly payment of $2958.00.

They are asking $3000 for rent. It just about evens out.

Don’t like my math? Neither do I, but this is the way people think.

[Doofrat]

It makes total sense and here’s why:

Take $710,000 minus $80,000 down payment that you got from a home equity loan. You now have $630,000 financed.

Take $630,000 and multiply it by 5% interest which equals $31,500. This is the interest you pay. Add a little more, (lets say $4000 for principal) which gives you a total payment each year of $35,500.

Divide $35,500 by 12 and it equals a monthly payment of $2958.00.

They are asking $3000 for rent. It just about evens out.

Don’t like my math? Neither do I, but this is the way people think.

[Doofrat]

It makes total sense and here’s why:

Take $710,000 minus $80,000 down payment that you got from a home equity loan. You now have $630,000 financed.

Take $630,000 and multiply it by 5% interest which equals $31,500. This is the interest you pay. Add a little more, (lets say $4000 for principal) which gives you a total payment each year of $35,500.

Divide $35,500 by 12 and it equals a monthly payment of $2958.00.

They are asking $3000 for rent. It just about evens out.

Don’t like my math? Neither do I, but this is the way people think.

[jpinpb]

Ok. I admit. Math is not my forte. This must be some new math or I’m just not using correct numbers. Even if I use your numbers and really give the benefit of doubt and he/she put 80k down that wasn’t a HELOC (b/c then they’ll have that additional monthly payment of what? 500?)

630k at a rate of 6% – Can you get a loan w/5%?

anyway 630k @ 6% = 3,777 + prop. tax of 525 + insurance? 100? = $4,402.

Now, I am not sure of how much they can write off on taxes. That’s another weakness of mine. Is he/she writing off 1400+ a month?

Say they are. So now they’re breaking even. What if something breaks in the house? How long before that 80k makes him/her money? How long are they holding on to this “investment” before they can sell it and make money? Is the rental market going to be the next bubble and next year they’re renting it for 5k?

Maybe I should find a realtor cheerleading board so I can understand. Everything I’m reading is saying market will go down in 2008, best optimistic is flat in 2009 and maybe pick up in 2010. The dire ones are saying it will suck until 2011 and then pick up.

Who to believe?

[jpinpb]

Ok. I admit. Math is not my forte. This must be some new math or I’m just not using correct numbers. Even if I use your numbers and really give the benefit of doubt and he/she put 80k down that wasn’t a HELOC (b/c then they’ll have that additional monthly payment of what? 500?)

630k at a rate of 6% – Can you get a loan w/5%?

anyway 630k @ 6% = 3,777 + prop. tax of 525 + insurance? 100? = $4,402.

Now, I am not sure of how much they can write off on taxes. That’s another weakness of mine. Is he/she writing off 1400+ a month?

Say they are. So now they’re breaking even. What if something breaks in the house? How long before that 80k makes him/her money? How long are they holding on to this “investment” before they can sell it and make money? Is the rental market going to be the next bubble and next year they’re renting it for 5k?

Maybe I should find a realtor cheerleading board so I can understand. Everything I’m reading is saying market will go down in 2008, best optimistic is flat in 2009 and maybe pick up in 2010. The dire ones are saying it will suck until 2011 and then pick up.

Who to believe?

[jpinpb]

Ok. I admit. Math is not my forte. This must be some new math or I’m just not using correct numbers. Even if I use your numbers and really give the benefit of doubt and he/she put 80k down that wasn’t a HELOC (b/c then they’ll have that additional monthly payment of what? 500?)

630k at a rate of 6% – Can you get a loan w/5%?

anyway 630k @ 6% = 3,777 + prop. tax of 525 + insurance? 100? = $4,402.

Now, I am not sure of how much they can write off on taxes. That’s another weakness of mine. Is he/she writing off 1400+ a month?

Say they are. So now they’re breaking even. What if something breaks in the house? How long before that 80k makes him/her money? How long are they holding on to this “investment” before they can sell it and make money? Is the rental market going to be the next bubble and next year they’re renting it for 5k?

Maybe I should find a realtor cheerleading board so I can understand. Everything I’m reading is saying market will go down in 2008, best optimistic is flat in 2009 and maybe pick up in 2010. The dire ones are saying it will suck until 2011 and then pick up.

Who to believe?

[jpinpb]

Ok. I admit. Math is not my forte. This must be some new math or I’m just not using correct numbers. Even if I use your numbers and really give the benefit of doubt and he/she put 80k down that wasn’t a HELOC (b/c then they’ll have that additional monthly payment of what? 500?)

630k at a rate of 6% – Can you get a loan w/5%?

anyway 630k @ 6% = 3,777 + prop. tax of 525 + insurance? 100? = $4,402.

Now, I am not sure of how much they can write off on taxes. That’s another weakness of mine. Is he/she writing off 1400+ a month?

Say they are. So now they’re breaking even. What if something breaks in the house? How long before that 80k makes him/her money? How long are they holding on to this “investment” before they can sell it and make money? Is the rental market going to be the next bubble and next year they’re renting it for 5k?

Maybe I should find a realtor cheerleading board so I can understand. Everything I’m reading is saying market will go down in 2008, best optimistic is flat in 2009 and maybe pick up in 2010. The dire ones are saying it will suck until 2011 and then pick up.

Who to believe?

[jpinpb]

Ok. I admit. Math is not my forte. This must be some new math or I’m just not using correct numbers. Even if I use your numbers and really give the benefit of doubt and he/she put 80k down that wasn’t a HELOC (b/c then they’ll have that additional monthly payment of what? 500?)

630k at a rate of 6% – Can you get a loan w/5%?

anyway 630k @ 6% = 3,777 + prop. tax of 525 + insurance? 100? = $4,402.

Now, I am not sure of how much they can write off on taxes. That’s another weakness of mine. Is he/she writing off 1400+ a month?

Say they are. So now they’re breaking even. What if something breaks in the house? How long before that 80k makes him/her money? How long are they holding on to this “investment” before they can sell it and make money? Is the rental market going to be the next bubble and next year they’re renting it for 5k?

Maybe I should find a realtor cheerleading board so I can understand. Everything I’m reading is saying market will go down in 2008, best optimistic is flat in 2009 and maybe pick up in 2010. The dire ones are saying it will suck until 2011 and then pick up.

Who to believe?

[boomer]

Don’t forget $700 per month in property taxes. That house is crap. I think it was a couple of agents that bought it last June. They have to be thrilled they dumped it. It was an out of town agent that sold it, probably an out of town buyer as well. I wouldn’t be surprised if they are planning to scrape it and build. There is a giant house next door.

[boomer]

Don’t forget $700 per month in property taxes. That house is crap. I think it was a couple of agents that bought it last June. They have to be thrilled they dumped it. It was an out of town agent that sold it, probably an out of town buyer as well. I wouldn’t be surprised if they are planning to scrape it and build. There is a giant house next door.

[boomer]

Don’t forget $700 per month in property taxes. That house is crap. I think it was a couple of agents that bought it last June. They have to be thrilled they dumped it. It was an out of town agent that sold it, probably an out of town buyer as well. I wouldn’t be surprised if they are planning to scrape it and build. There is a giant house next door.

[boomer]

Don’t forget $700 per month in property taxes. That house is crap. I think it was a couple of agents that bought it last June. They have to be thrilled they dumped it. It was an out of town agent that sold it, probably an out of town buyer as well. I wouldn’t be surprised if they are planning to scrape it and build. There is a giant house next door.

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