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no_such_reality
ParticipantIt still looks like a rental. 🙂
Minor nit, it’s only permitted for 4 bedrooms. The other 2 bedrooms appear to be a den and storeroom.
ParticipantVADCMD, good point, that wasn’t a sale, that was a foreclosure and the unit was bought at the foreclosure auction.
ParticipantMy guess would be the house isn’t worth $300K let alone $360K.
The owner will have the senior lien on the home.
If it’s a townhome, what’s the rental value of it?
At $1500/month, you’ve basically up-front paid the loan for the next 10 years without interest, with interest, somewhere between 20 years and indefinitely.
The owner no longer has the has any an management costs, no maintenance costs, no mortgage payments, no taxes, no HOAs. If you go to default, he as the $180K to make the loan whole and repossess.
ParticipantOkay, FSD, I’ll give you that he could have left. So I apologize for my cheap shot yesterday. I had a particularly bad afternoon yesterday after getting stuck behind a pair of clowns driving 50 side-by-side down the 101 from Santa Maria until almost Ventura.
However, I really do have the simplistic view that he who throws the first punch is usually wrong. I also have the simple view that when people are angry that people ask questions about what they are doing on public dealings, it’s typically because they aren’t 100% on the up and up on their dealings.
ParticipantActually, I think any motivated sellers that think the market is going down fast are simply pricing it right at the market which typically has them 20% below their peers anyway.
Take a look at Powaysellers posts on the houses in her neighborhood. You don’t really have to cut the market if everyone else is trying to take a 10% premium.
ParticipantLet’s clear something up, 10% below asking price isn’t low-ball. That’s a legit beginning offer even if the asking price is at the real market.
A low-ball offer IMHO, is something that is 20% or more below the market. And the market is the real price houses are selling at with all the under the radar kick-backs in it like paying closing costs, points, etc.
In the current market, that means a low-ball offer can literally be 40% below asking price. There are plethora of homes out there that are looking at the price from last year and adding 20-25% to it when it is literally 10% below it. So for example, if the home last year was $512, they’re asking $620 the real market is at at ~$460 with a fair starting offer at $414. A lowball comes in below that say $370 or so.
ParticipantWell PS, you left the biggy.
Partially Hydrogenated Oil. Sometimes just labeled as Hydrogenated Oil which may or may not be partially hydrogenated.
Also, you cannot depend on the food labels for information. For example, Townhouse crackers, link Notice the #2 ingredient is Partially Hydrogenated Oil yet, all the fat is labelled at Saturated, partially saturate, mono-unsaturated each listed at 0.5 grams and the total at 1.5 grams. With the dreaded dagger symbol disclosing the transfat gotcha.
Two other items to watch out for: invert sugar, basically, this is sugar that has already had the first and most difficult breakdown (digestion) stage done so a complex sugar module becomes two simple fructose and glucose modules. Usually, the boxes will contain the label 100% natural…
The second item is splenda (sucralose), another artificial sweetener labelled 100% natural because it is derived, extracted and concentrated from a natural item (bananas). Not sure if in the modern manufacture if they extract or simply brew the chemical equivalent.
ParticipantDo we really have a generation of free range kids on the way, totally oversnacked and videoed, and under-boundaried and parented?
Do you really need to ask this when the most popular option on family vehicles is rear seat LCD Screens with DVD players?
ParticipantFutureSDGuy, your position is pathetic. Anybody in our society is free to question people when they are acting unethically without fear of violence and have someone like you insinuate they *caused* the violence by sticking their nose in. Let me guess, when you hear someone was raped, your first question is what was she wearing.
The fact that the couple reacted so violently shows their true colors and understanding that what they were doing was illegal.
It’s foolish to think that we as a society should expect only the police to investigate something. Criminals would love nothing more. Imagine, no more neighborhood watches, no more security guards asking questions, no reporters tracing the paperwork.
ParticipantYour equating owning investment property as the same risks as bonds. It isn’t. With a GRM of 13, you’re looking at 7.5% return. With CD’s yielding 5.5% that would be an extremely poor risk adjusted return.
Yet, even with a GRM of 13, the OP’s original condo renting at $1050, would be worth $163,000 $1050 x 12 x13. At $189K he’s at a GRM of 15, at $219K – $240K the owners are at 17-19.
A condo at $1500 / month with a GRM of 13 would net $234,000. If there are concerns the property won’t appreciate, there are significant HOA fees, vacancies increases, that goes down. With low investor mortgage rates or lower risk free rates, it goes up.
When I said condos won’t compete at over $200K, I already allowed for the premium that SoCal prices into properties.
ParticipantYour equating owning investment property as the same risks as bonds. It isn’t. With a GRM of 13, you’re looking at 7.5% return. With CD’s yielding 5.5% that would be an extremely poor risk adjusted return.
Yet, even with a GRM of 13, the OP’s original condo renting at $1050, would be worth $163,000 $1050 x 12 x13. At $189K he’s at a GRM of 15, at $219K – $240K the owners are at 17-19.
A condo at $1500 / month with a GRM of 13 would net $234,000. If there are concerns the property won’t appreciate, there are significant HOA fees, vacancies increases, that goes down. With low investor mortgage rates or lower risk free rates, it goes up.
When I said condos won’t compete at over $200K, I already allowed for the premium that SoCal prices into properties.
ParticipantI may have said cap rate, in reality I did a quick rule of thumb GRM (Gross Rent Multiplier).
In the OC, they matched up (GRM in the 8-13 range based on quality) for most of the 1990s.
In fact, the first townhome I bought in California, I bought at 8X the equivalent rent multiplier as a residence.
It’s a matter of time before rental properties fall back to fundamentals. The investment rental market has been distorted even more than the housing market by speculators thinking they’ll flip it in a year or two for mega profit.
Condo’s won’t continue to sell at $400K, in fact won’t sell for much more than $200K if they can be rented for $1200. Condos are just apartments that you’ve leased for 30 years where you get to do your own maintenance and taxes.
ParticipantI figure it’s worth $95,760.
Yeah that’s right.
It’s a cap multiplier of 8 with a 95% occupancy. It’s a condo so the HOA fees disrupt the value. If it wasn’t, a cap multiplier of 13 could be used.
Alternatively, I get a value of $127,000 by aligning the $1050 rent against the cost of the PITI & HOA.
ParticipantWhen you say premium, why would kitchen cabinets and countertop warrant a premium, it would only warrant the value they are worth.
A house with a modern functional kitchen may be worth $500K, the $30,000 maple granite upgrade may only be worth $510K, whereas the house that needs it’s kitchen replaced, may only be worth $470 or $480.
The owner may have spent $30K on an upgrade, but from the home standpoint, $10K of the house value is just kitchen space, $10K is functional value. By upgrading the $30K, kitchen, the owner destroyed the previous $10K space and reused it, then destroyed the previous $10K of functional value rebuilding it and then put in the upgrade. Hence, that $30K of kitchen work is really only worth $10K above the other house with a functional kitchen.
The cost versus value numbers on remodeling have been getting distorted by the bubble just like home values. In additional, un-like previous remodel efforts, people are remodeling kitchens that are completely viable in essence, destroying value to add value where-as previously, remodels that even then only added 60 cents on the dollar where repairing detriments to the property that were actually decreasing the property value.
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