Still holding out on E Maple

I first wrote about Alex Abad’s dream home on E Maple back in May. I noted that the home had an Alex Abad for-sale sign dating back to August 2016. ONE YEAR AGO.  Zillow calls days on market 96, yeah right.

It’s like a game of chicken, how long can they keep hope alive that this home is worth $1.9 million dollars?

There’s also some weird shenanigans on the price history with some dumb ass paying $2.1 mil in January 2015.  Something isn’t kosher. Now that its “completely remodeled” it’s only worth $1.9? Not only did someone “pay” $2.11 mil there was another appraisal in 2016 that valued it at $2.2 mil.

I’m anxious to see how long he can hold onto hope. Hopefully he gets smart and lowers the price before we go to war or the stock market collapses.

Price History

DATE EVENT PRICE $/SQFT SOURCE
05/08/17 Listed for sale $1,895,000-10.2% $749 Palm Realty Bo…
01/09/15 Sold $2,110,000 $834

Tax History

YEAR PROPERTY TAXES CHANGE TAX ASSESSMENT CHANGE
2016 $24,250 $2,178,000 +3.2%
2015 $24,250 +1,423% $2,110,000 +1,482%

I’m not screaming fire, but…

I’m not screaming fire, but I do smell smoke. Like I’ve mentioned before I may be in a huge feedback loop where I am only reading and seeing information that supports my thesis that the financial world is on the precipice of a giant reset.

I screamed fire a year and a half ago and for a small moment I looked like a hero. The market tanked in January 2016, but the powers that be stepped in and quickly put out the fire. So me saying I smell smoke is kind of meaningless because I’ve been smelling smoke for a very long time.

Even without Trump and Kim Jong Un in a pissing match being exchanged over twitter we have signs of stress everywhere. What frightens me is the amount of really smart people singing the same tune. Shit ain’t right. Real estate prices are a symptom. And when you dig into the collapse of 2006 you see that real estate pricing and their inevitable crash were also just a symptom.

Is this time different. Have the Uber and AirBnbs of the world changed out financial system so much that business cycles no longer matter? (don’t ask Snap Chat or Blue Apron that question).

Do yourself a favor and google stock market bubble, bond bubble, credit bubble. Read a little history on the bubbles of 2000 and 2006. And prepare yourself. Just like we should have an emergency plan in the even of an earthquake we should have a financial plan.

Or don’t. Maybe I’m completely wrong. Maybe I’m the crazy prepper stock piling MREs and canned food waiting for the eventual end of the world. But at this point of my life I can’t afford to lose 20-50% of my life and retirement savings. If you look at the S&P 500 the general trend is up, but if those horrific bubbles pop at an inopportune time in your investment horizon it can be hard to recover from. Imagine being close to retirement in 2007? You just lost 40% of everything.  It took the market 7 years to get back to where it was at the peak in January 2000. After the bubble popped in 2007 it took about 5.5 years for the market to get back to where it was at that peak. That math only works if you are a diehard buy and hold fanatic. Everyone has a plan until they get hit in the nose.

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The 203 W Walnut eBay auction experiment fails

Shocker! The ebay listing for 203 W Walnut failed. WTF? I find it incredibly amusing that people think they can come into a market and assume what works in another market will automatically work in our little town. Welcome to El Segundo.

The listing now is back to the original $1.3 mil price range for a flipped 1300 sqft 3/2. Yours for the low low price of $1000 per square foot. I think that makes it THE MOST EXPENSIVE LISTING IN EL SEGUNDO on a price /square foot basis.

Not only did their experiment fail, but now they are going to market at a list price that they didn’t reach with their ebay auction. Seems totally reasonable. People voted with their wallet and told them what the house was worth and apparently it wasn’t $1.3 mil.

Not sure if you have bothered to drive by, but just from the outside it screams Home Depot flip. Look past the staging decor and shiny new paint. Look for signs of quality and workmanship (or lack thereof). This photo speaks volumes. WTF did they run an extension cord to power the fan?

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It doesn’t matter if that is or isn’t an extension cord what matters is whether they were cheap and lazy with their craftsmanship. What this photo tells me is that someone cut corners. They didn’t want to spend the money to address a weird element. When you walk into a house and see signs like that you have to wonder what the work is like under the house or in the walls? What is shoddy work going to cost you in 12 months?

For $1.3 mil you also get a plastic fence. And a one car garage that you may or may not be able to fit into without folding in your mirrors.

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Sunil Mehta and Michelle Carrigan of Real Estate Xperts Inc welcome to our little town.

I’m honestly flabbergasted

We’ve seen a flurry of listing activity with a handful of houses taking price cuts and Alex Abad’s flip on Maple sitting untouched in $1.9 mil dreamland. But then again we have a lot of downright stupid activity in the $1.3 mil range.

1426 E Oak Ave 90245 popped up as an AS_IS “Fixer-UPPER” for $1.3 mil and it already shows pending. Like I mentioned before, who the hell is appraising these homes? At 1798 sq ft at least it’s livable, but if you ballpark at least $50/sqft to upgrade some POS “as-is” house then you are at $1.4 mil. With any luck you don’t need plumbing, electrical, roofing, termite or foundation work.  Good luck on your purchase.

837 Sheldon St 90245 is blue, with lot’s of paint colors and a 1980s kitchen for $1.2 mil.

And just down the street at 945 Sheldon you have another listing at $1.25 mil. It’s expensive at $867/sqft  and has that awesome track lighting/granite counter top combo that was all the rage…. It does have two illegal studio units that the new buyer can sort out with the city.

Any of these lackluster homes will cost you a quarter of a million dollars down and about $6k per month in PMIT.  Save your money and go rent this 1900 square foot house on Maryland for $4400. You’ll have so much money left in your pocket that throwing $20k at the house and signing a three year lease will let you sleep at night.

 

WTF on Walnut Part II

When I wrote about 203 W. Walnut 90245 I was flippant about their redicilous asking price. Not even a day later I get a price reduction email down to $599k from $1.3 mil and the square footage has swollen to 1300.

Then in another gimmicky move they dropped the price again to $598k.

Looks like Sunil Mehta of Real Estate Xperts Inc. Is attempting to redefine how homes are bought and sold. What was an attempt at finding a balance between supply and demand has now morphed into a last minute eBay auction. (Hey jackass the supply/demand equation is so greatly in favor of the seller you don’t need to gamble with hundreds of thousands of dollars.)

From their site:

“The results have been the same at every sale; the home was only open for one day, dozens or even hundreds of people showed up, multiple offers were received and the top market value was obtained for every home.”

This is going to be exciting to see  it’s either going down in a ball of fire or like a traditional purchase someone will overpay.

They say they have he right to refuse any offer but they are hoping that the anticipation and fake low listing price will get people motivated to write offers and like any silent auction your goal is to write an offer so strong that you don’t lose by a mear $100k.

What could possibly go wrong?

  • The local cabal of agents will tell their clients it’s a joke.
  • They blew their load early with that rediculous $1.3 mil list price.
  • The winning bidder can’t get the financing for their offer.
  • A developer will swoop (Look out for Bill and Alex writing offers)
  • Some asshole will overpay.

Funny, that’s the same scenarios as a traditional listing. Welcome to El Segundo let me get my bag of popcorn.

 

 

Delusional on W. Walnut

203 W. Walnut 90245 just hit the market at $1300/sqft. Some flipper thinks that a rehab on a tiny 1,000 sqft home on a traditional 5000 sqft lot is worth $1.3 million dollars!

When I saw the email I could only assume that price would accompany a 10k lot. Nope. I was wrong, just some random real estate agent writing shitty copy like it’s an eBay auction.

Purchased nine months ago for $775k. They got a deal on the purchase price and now they are trying to ream someone for all the money they can.

$775k + $150k (very generous rehab budget) + $50k carrying costs = $975k

When you know their break even you know their threshold.  If this house appraises for $1.3 mil someone should be shot. If you pay this much for a house you deserve what you get.