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Monday, July 28, 2014

Eastside Property: Flippers in a hurry to sell this Atwater home

Photo from Redfin.com

With signs that the real estate market is heating up, house flippers are wasting no time as they buy, fix up  and resell homes.  This Spanish-Colonial home in Atwater Village, for example,  was in need of major work when it went on the market in early July with a listing description that did not shy away from the many short-comings, including “urine soaked” floors and “questionable” plumbing and heating systems.  But only about six weeks after, the  864-square-foot Silver Lake Boulevard home   was sold to a buyer who paid $260,000 or $21,000 over asking price.  Now,  less than four months after changing hands, the same property is back on the market at an asking price of $429,900, according to Redfin.

How can the investor justify an asking price that is 65% higher than what they paid back in August?  The sales description touts a long list of improvements to deal with the urine soaked floors and questionable plumbing:

This home has new windows, new interior and exterior paint, granite counter tops in kitchen, new fixtures, sinks, tile flooring, upgraded plush carpet, etc!!

How long will this flip last on the market? Stay tuned.

 

18 comments

  1. Mmm…. they had me at plush carpet.

  2. Totally, wondering why the listing does not include a photo of that PLUSH carpet…

  3. Got to hustle…Who said there’s no more hustlers…

  4. Well, this is not a hot buy, all the urine aside. That is simply in the price range in that area — just look at all the recent sales there on Zillow, and you will see. Zillow in fact says this $429,000 price is too high, says it is worth only $416,247 today.

    http://www.zillow.com/homes/3157-SILVER-LAKE-Blvd-Atwater-Village,-CA-90039_rb/

    So don’t be so quick to believe the real estate agents’ scaring you with assertions that prices are $600,000 (they only tell you abut the ones that a fool bought) and climbing and there are bidding wars on everything, and you better buy before you become homeless for life.

    In fact, with 30-year mortgages now at 3.3%, you better fear the hell about paying the going price, because when mortgages go back up to 8%, no one is going to be able to get large enough loans to pay the price you expect. The prices out there today are HIGHLY propped up, a regular house of cards, and when interest rates rise, the floor will be pulled out from under them — and today’s buyer will be left to take any loses or at minimum see no gain but a lot of risk. The prices out there now do not reflect the real market — they are there through use of smoke and mirrors.

  5. This house looks much better then it was. As an Atwater person, I have watched this house transform.
    But this house looks pretty small. The bedrooms and other rooms must be really small.
    I do not think there is a yard or driveway. It is almost flush to one of the houses next door. (too bad they cannot buy it.)
    As for a quite street, It is some of the time. Problem is that street has a lot of gang activity, especially in the summer. It goes straight down to the river where they hang out. So before one invests that much money, better check out the crime stats and be ready to hear gunshots.

  6. According to the L.A. Department of Building and Safety website, they were investigated for “Construction in progress without permits or inspections” on 11-14-12. Then they were issued a permit for a kitchen/bathroom remodel and door/window change-out on 11-19-12. It seems someone called DBS on them and they were forced to get permits for the work they were performing.

    I’m guessing they didn’t repipe the plumbing or change the electrical, so future buyers should pay special attention to whether there’s still galvanized plumbing and old electrical wiring in those walls. Also, they probably didn’t sand or refinish the wooden floors if they chose carpeting instead. In my opinion, a buyer could do a lot better in terms of location and lot size for $429,000. The main upside to this property is that when the buyers need some help moving in, they can walk around the corner and hire one of the many guys hanging out on Fletcher by the U-Haul.

    https://www.permitla.org/ipars/list_address.cfm

    • $500/square foot — on a minuscule 1600 square foot lot, with NO yard — seems crazy. Especially for a house with questionable construction. The lack of any interior photos says too much.

      It also sounds that they’ve fudged a bit to get those permits. They were approved for: “General rehabilitation (Non-structural changes, less than 10% of replacement cost of building).” A 65% markup from original sale price suggests a bit more than the cosmetic changes that would keep you under 10% of replacement cost.

      • Replacement cost is really really high due to modern seismic building codes.

        • @Skr: No, that’s not the case. Modern construction techniques are standard, especially for a one-floor building on flat ground with ordinary wall openings — standard stud walls on 16” centers, with a stiffening layer (like stucco over OSB) on one side, and ordinary stamped metal brackets for reinforcing as called for by code. (I approved plans and paid for a two-story building in 2005.) It’s no big deal. They might not get away with the tile roof details now; they’d also need double-pane glass and wall insulation. But it’s simple stuff.

  7. According to the MLS listing information, the name of the property’s owner is … wait for it … Shark Investments LLC.

  8. Human, cat, dog or rat urine?

  9. Sounds like urine for some surprises with this one!

  10. Don’t panic. Due diligence is all that is required of any buyer to ensure paying a fair price.

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