Address: 1 Buellton, Irvine, CA 92602 (Northpark)
Plan: 4133 sq ft – 5/5
MLS: S438082 DOM: 158
Sale History: 11/14/2005: $1,550,000
Price Reduced: 06/11/06 — $1,769,000 to $1,739,000
Price Reduced: 06/25/06 — $1,739,000 to $1,709,000
Price Reduced: 07/24/06 — $1,709,000 to $1,699,000
Price Reduced: 09/10/06 — $1,699,000 to $1,675,000
Current Price: $1,675,000
We found out about this flip from an anonymous tipster (Thank You!). This huge Plan 3 in the Huntington tract built by Richmond American in 2002 sold for about 100% more in 2005 and came back on the market 5 months later in April 2006 for even more. The original owner made some great money on this property in those 3 1/2 years from 2002-2005. The original owner was able to move this property from listing to escrow in 9 days (see MLS S413640)! That’s FAST considering it was late 2005 at the time. Great timing huh? The original owner also sold for $45,000 less than the original listing price of $1,595,000. Motivated seller huh? Perhaps.. but accepting a price $45k below asking after only 9 days on the market just doesn’t make sense.
That is… until you find out the original owner is a RE broker and represented the new buyer. This broker was more than glad to reduce the price by 3% since he wouldn’t have to pay a commission to another agent.
Let’s look at the new buyer. From what I can gather, the new buyer has loans totaling $1,469,500 – which INCLUDES a $307,000 loan from the original owner/RE broker! The original owner/RE broker really had to put in some effort and $$ to make this deal come together. A $1,469,500 loan on a $1,550,000 property is just absurd! That’s a 95% financed purchase! Any idea what would happen if the new buyer can’t make the payments?
Now the new buyer listed the home 5 months after they bought it hoping for a quick 200k profit. That’s definitely not happening. You can tell they realized this and started reducing the price. The first two price cuts were 30k each but after that you can see the hesitation in reducing the price further. IF sold at the current asking price of $1,675,000 they will make a profit of $24,500. We’ll have to just wait and see what happens here.