Originally posted on October 6th, 2006
Address: 25 Golden Eagle, Irvine, CA 92603 (Shady Canyon)
Plan: ?? sq ft - 4/4.5
MLS: S452978 DOM: 62
Sale History: 1/6/2006: $4,030,000
Price Reduced: 09/28/06 -- $4,480,000 to $4,280,000
Current Price: $4,280,000
For those that might not know, Shady Canyon is one the most prestigious and exclusive communities in Orange County. This village in Irvine consists mostly of custom homes although there are a few 'tract' homes as well. Prices currently range from $3,495,000 - $17,900,000.
While scouring MLS looking for flips, I came across 25 Golden Eagle. You'll want to look it up in ZipRealty to check out the rest of the pictures. A gorgeous home in a beautiful setting but you need mucho dinero to play in this part of Irvine.
This home was custom built in 2003 and it appears the original owner listed the home in November 2005 and sold it in January 2006. The new owner is a RE broker and put the home back on the market in August 2006 looking to make $450,000. The price was lowered a couple weeks ago reducing the potential profit to about $250,000. The broker is offering 3% for someone to bring a buyer and that will decrease his profit to about $122,000. I've been unable to find any loan information so if someone else is able to dig that up, please post. Imagine what the carrying costs on something like this would be. This one may take a while to sell but I'll keep checking.
UPDATE #1 - November 16, 2006
This listing fell off the market on November 2nd. If it gets relisted I'll update the post. In the meanwhile, check out another $4+ Million Flip at OC Renter's blog.
UPDATE #2 - December 15, 2006
And now it's BACK on the market at a price of $4,295,000. It's also now listed with Uber realtor John McMonigle. I'd bump up the selling costs to be about 6% now which would give the seller a profit of about $7,000. Nice 
Address: 86 Chula Vista, Irvine, CA 92603 (Northpark)
Plan: 1455 sq ft - 2/2.5
MLS: S464760 DOM: 42 (+32 Before)
Sale History: 06/08/2005: $590,000
Current Price: $619,000
Today's featured flip is a Plan 1? in the Monterey tract in Northpark. Anyone know the builder? Not too much to say on this one yet other than they sure picked the wrong time of the year to list their home (originally listed on 10/1/2006 MLS#: S460712). This one will sit for a while considering a Plan 2 in the same tract with 3 bedrooms can be had for $20k more.
Assuming 6% in selling costs, these guys are facing a loss of at least $8,000. Some of you may have noticed a theme here... people LOSE money in real estate too!
Address: 304 Quail Ridge, Irvine, CA 92603 (Quail Hill)
Plan: 1656 sq ft - 2/2
MLS: P550005 DOM: 14
Sale History: 06/21/2006: $640,000
Current Price: $649,000
Here's another flip in the Ambridge tract built by William Lyon Homes in the village of Quail Hill. Our flipper purchased this Plan 3 condo from the Builder less than six months ago. When the Builder starts placing homes on MLS, you know things aren't looking good.
All in all, it seems like a decent home BUT I think the pricing is high for a 2bd here. Also, I wish all plans like this came with an extra half bath. With 1656 sq ft, there's no reason they can't have an additional half bath considering there are some plans with as little as 1030 sq ft that have 2.5 baths.
If sold at the current asking price (and assuming 6% in selling costs), our flipper is looking at a loss of about $30,000!
Address: 412 N Quail Ridge, Irvine, CA 92603 (Quail Hill)
Plan: 1098 sq ft - 2/2
MLS: S467679 DOM: 10
Sale History: 03/22/2005: $560,000
Current Price: $495,000-$500,000
I received a tip about this property from one of our readers (Much appreciated!). I believe this is a Plan 1 in the Ambridge tract built by William Lyon Homes in the village of Quail Hill. Our seller purchased this home about 20 months ago with 100% financing ($448k 1st, $112k 2nd) for $560k. I also see that they may have replaced their 2nd with another loan or HELOC in the amount of $199,500. Irregardless (anyone watch American Dad last night?), this seller is in for a hell of a loss.
The current asking price is a range of $495,000-$500,000. If sold at $495,000 and assuming 4% in selling costs, the loss here will be almost $85,000! Why am I assuming only 4% in selling costs? Well it looks like the seller listed the property with a flat fee listing service (click on the MLS number above to see the Realtor.com page). When I first saw this listing, I didn't understand why there was no description in Ziprealty or MLS (as well as only 1 picture). Now, it sort of makes sense.
Does anyone with a RealtyTrac subscription know if this home is in preforeclosure? It'd also be interesting to know if the new 2nd loan was a HELOC or not. I just can't imagine how someone who purchased with 100% financing would be able to cough up 85 large to get rid of a property.
Originally posted: September 28, 2006
Address: 48 Arborside, Irvine, CA 92603 (Turtle Ridge)
Plan: 1770 sq ft - 3/2.5
MLS: U6602272 DOM: 62
Sale History: 06/19/2006: $908,000
Current Price: $960,000
These flippers wasted no time by putting this one on the market only a little over a month after they purchased. My guess here is that they tried to catch a falling knife. The people they bought the home from TRIED to get $985k and worked down to $959k before selling for $908k after at least 4 months (see MLS#'s S424164 and S436681).
It seems the new buyers got a reality check and just want to get out. Factoring in an estimated 6% to be paid out in commissions, the owners will lose $5,600. That's IF they get a full price offer and that DOES NOT include their holding costs. It will most likely be a lot worse. We'll have to follow up with this one when it closes.
UPDATE #1 - December 5, 2006
48 Arborel closed escrow on 11/19/2006 for $917,500. That's quite a difference from the original asking price of $980,000 when it was listed on 7/28/2006. Doing the math (assuming 6% in selling costs) shows that this flipper lost AT LEAST $45,550! The actual loss could be even greater if they paid money towards closing costs for the new buyer.
The new buyers actually paid slightly more for this property than the flipper did. But the flipper still lost over $45k. So where did all that money go?!? That's right.. to the Real Estate Brokers and Agents as well as Title and Escrow.
Castellina is a condo development built by Centex Homes in the gated village of Covenant Hills in Ladera Ranch. Those that can't stand the sight of some of the homes in Ladera (funky colors, packed housing, unattractive architecture) may be pleasantly surprised with some of the tracts in Covenant Hills. Covenant Hills is the only gated village in Ladera and is also the only village to have custom home sites. It's positioned to be the nicest part of Ladera and along with custom home sites there are also many luxury tracts here as well. I believe Castellina is the only condo tract in Covenant Hills as the others are all SFR. For more info, check here and here.
The Castellina tract caught my attention back in 2004. At the time, there was a lot of hype around Covenant Hills and Castellina was the most affordable product in the village. Centex had a Priority List and invited those on it to a very nice luncheon at the Dove Canyon Country Club. Models weren't ready so they had virtual tour videos. Everything about Castellina appealed to me - beautiful Tuscan architecture, spacious and well designed floor plans, outdoor loggias, great upscale location, garages with driveways (although some shared), and even some small private yards.
So, what was the problem? Why am I not living there right now? It's because there was no way I could justify the absolutely ridiculous HOA fees of $750/month! From what I understood, every home in Covenant Hills had a Ladera HOA of $400/month. On top of that, Castellina had it's own HOA of $350/month. When I specifically asked what that $350/month got me, I was pretty much lied to and told that it included the pools, blah, blah in Covenant Hills. That's BS because all of that is covered by the $400 Covenant Hills HOA. I was able to justify the $400/month Covenant Hills HOA fee(after all, Turtle Ridge Summit is about the same and Shady Canyon is even more). But how does an EXTRA $350/month for an attached product with NO additional amenities make ANY sense?
In the end we decided to pass on Castellina (just as we would on an Irvine high rise - hopefully another post for me). Although I kept abreast of the prices for a little while, I soon lost interest. Lately, while researching homes to blog about, I became curious and decided to look into what's happening with Castellina. Surprise, surprise.. Castellina has it's fair share of flippage. Out of the 82 homes in the tract, there are 9 Active and Pending on the market today:
- 18 Salvatore - MLS S465146 - 3bd/2ba - 2179 sq ft - Plan 1 (Villa Antica) Listed 11/02/2006 (32 DOM) at $829,000
NOW $729,000
- 25 Tuscany - MLS S444917 - 2bd/2ba - 2075 sq ft - Plan 2 (Villa Casali)Listed 6/11/2006 (172 DOM) at $823,521 by Centex
NOW Pending at $660,000
- 1 Tuscany - MLS S444916 - 2bd/2ba - 2339 sq ft - Plan 2X (Villa Casello) Listed 6/11/2006 (176 DOM) at $844,796 by CENTEX
NOW $685,650 and offering 3% broker co-op
- 25 Chianti - MLS S463737 - 3bd/2.5ba - 2084 sq ft - Plan 3 (Villa Frosino) Listed 10/23/2006 (25 DOM) at $755,832 by CENTEX
NOW Pending at $695,832
- 7 Salvatore - MLS S450335 - 3bd/2.5ba - 2200 sq ft - Plan 3 (Villa Frosino) Listed 7/18/2006 (133 DOM) at $850,876
NOW Pending at $875,000
- 21 Tuscany - MLS S439546 - 3bd/3.5ba - 2250 sq ft - Plan 4 (Villa Lucia) Listed 5/9/2006 (209 DOM) at $969,000
NOW $899,900
Purchased 3/23/2006 for $889,557
- 34 Tuscany - MLS S465237 - 3bd/3.5ba - 2246 sq ft - Plan 4 (Villa Lucia) Listed 11/6/2006 (28 DOM) at $955,000
NOW $919,000
- 10 Salvatore - MLS S450382 - 3/3.5ba - 2246 sq ft - Plan 4 (Villa Lucia)First Listing at $1,050,000, then reduced to $949,000 and then taken off the market after 175 days. Currently Listed on 7/19/2006 (138 DOM) at $918,900
NOW $899,890
Purchased for ~$850,000
Also available for lease - $3500/month
- 6 Salvatore - MLS S423559 - 4bd/3ba - 2600 sq ft - Plan 5 (Villa Spada) Listed 1/14/2006 (324 DOM) at $1,100,000
NOW $949,900
Purchased 9/26/2005 for $945,000
What I found really exciting was the drastic price reductions from the builder. 1 Tuscany and 25 Tuscany had price reductions of $100,000+ on 11/17/2006!
Here's what ZipRealty shows for 1 Tuscany right now:
Price Reduced: 09/12/06 -- $844,796 to $818,444
Price Reduced: 09/18/06 -- $818,444 to $806,455
Price Reduced: 09/25/06 -- $806,455 to $796,905
Price Reduced: 11/17/06 -- $796,905 to $685,650
Apparently getting rid of the inventory is more important to Centex than upsetting their customers who paid much more for the same product. Can you really blame Centex though? They are hurting as well.
Another item to note is the description for 21 Tuscany (possibly the same building at 25 Tuscany) says "Motivated seller will pay 5 yrs castellini hoa dues".
Obviously the builder has a lot more negotiating room than an unlucky flipper. I'm tempted to put an offer in to the builder for 1 Tuscany: $599,000 and credit for 10 years of HOA (Covenant Hills+Castellina). My goal would be to get on the Castellina HOA board and cut the HOA down to $150/month.
Originally posted: October 1, 2006
Address: 76 Alevera St., Irvine, CA 92618 (Oak Creek)
Plan: Plan 2 - 1200 sq ft - 2/2.5
MLS: S452336 DOM: 61
Sale History: 10/31/2005: $585,000
Price Reduced: 08/18/06 -- $625,000 to $615,000
Price Reduced: 09/29/06 -- $615,000 to $589,000
Current Price: $589,000
This is a detached condo in the Aldea tract in Oak Creek. This tract built by California Pacific Homes (a subsidiary of the Irvine Company), has been replicated many times throughout Irvine in various reincarnations: Sage in Quail Hill, Chantory in Turtle Ridge, Cortile in Woodbury.
It seems this Plan 2 was purchased as an investment property and now the owners have bought another investment property and need to sell this to make their 1031 exchange complete. Since the owners have already purchased their replacement property, they need to sell this one within 180 days to take advantage of the 1031 tax break. Because of this, as they get closer to the end of the 180 days, they will be more and more motivated to lower the price quickly if they aren't getting any offers. Also, it looks like they have quite a bit of equity built up in this property as I can find only a $300k loan after a quick search. Taking into account the slowing RE market in Orange County, the circumstances of their 1031 exchange, and also the financial situation which will allow them to lower the price big time if they MUST sell, this property could be very interesting to watch in the future!
If sold at the current asking price, the sellers will take a hit of $31,000 (assuming 6% commissions).
UPDATE #1 - December 4, 2006
Well, it looks like the sellers successfully unloaded this property at the price of $589,000. MLS shows that escrow closed 11/28/2006. It looks like their loss is $31,340 (assuming 6% in selling costs). It may be higher if they credited the buyer to closing costs.. but I guess we'll never know.
I have to admit, I'm a little surprised the price on this property didn't come down a little further. Based on this sale, prices in the Aldea tract are pretty much what they were a year ago.
Originally posted: September 29, 2006
Address: 714 Timberwood, Irvine, CA 92620 (Northwood)
Plan: 1400 sq ft - 2/2.5
MLS: R65177 DOM: 129
Sale History: 06/18/2004: $575,000
11/01/2002: $365,000
Price Reduced: 05/26/06 -- $575,000 to $567,000
Price Reduced: 06/02/06 -- $567,000 to $555,000
Price Increased: 06/22/06 -- $555,000 to $564,900
Price Reduced: 09/16/06 -- $564,900 to $545,000
Price Reduced: 09/25/06 -- $545,000 to $529,900
Current Price: $529,900
Wow! The owner here is going to be taking a HUGE hit. This property is well below it's 2004 price. Perhaps there's more to this than meets the eye. If this is legit, we're talking about a $77,000 loss (includes 6% in commissions).
UPDATE #1 - October 5, 2006
After 132 DOM, apparently this listing expired a few days after we mentioned it here. I'm not sure why but the agent bumped the price up to $545,000 right before it expired. Did the owners change their mind about selling? NOPE, the property is now back with a FRESH new listing and a LOWER price!
MLS: R70292 DOM: 3
Current Price: $499,900
Let's take a look at the price. The highest price that one of these Plan 4s sold for was $605,000 for 208 Timberwood on 4/27/2006. That buyer must be feeling pretty crappy right now. Our buddy here at 714 Timberwood is asking $105,000 less. That's a decline of over 17% in about 5 months!!
If sold for the new listing price, the seller will be losing over $105,000!
UPDATE #2 - October 24, 2006
DOM: 22
Current Price: $530,000
Shortly after our last update, the property went into Pending status in MLS (typically meaning that it's in Escrow) at a price of $530,000. Perhaps pricing it at $499k generated some interest/offers. Unfortunately, a few days ago the status went back to Active and the price is now $530k. I'm going to wait until this actually sells to estimate the loss. Regardless, it will be a big loser.
UPDATED #3 - December 4, 2006
Thanks to the latest comment by almostgotbitten, I've confirmed in MLS that this property closed on 11/27/2006 for $520,000. Assuming 6% in selling costs, the seller lost at least $86,200 in a couple years!
Right now there are 4 other 2/2.5 units (all about 1267 sq ft) that are priced between $545-$560k. You would think the closing price of 714 Timberwood would motivate some of these other units to lower their prices. We'll see..
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