IHB News 9-25-2010

Do you have a lot of money and no sense of cost? Today's featured property is for you….

Irvine Home Address … 44 BLUE HERON Irvine, CA 92603

Resale Home Price …… $18,950,000

We winnin, I push it very hard

We winnin, I climb a lot of mountains

We winnin, I ran a million yards

We winnin, but man who's counting

We winnin, it ain't about to slow down

We winnin, you're gonna have to catch me

Day 26 — Just Getting Started

IHB News

On my trip to Las Vegas last week, I put in a ridiculously low offer on an auction property and got it. It's always nice to start with a home run. I will devote a post to it as soon as I have it cleaned up and photographed.

For those considering investing in the fund or processing your paperwork, this does put an increased urgency on your part. When this house closes escrow (which will likely be at least 45 days from now if not weeks longer), the fund will permanently close to new investors.

Housing Bubble News from Patrick.net

Fri Sep 24 2010

Housing recovery a mirage, short housebuilders (finance.yahoo.com)

Housing market remains stagnant (concordmonitor.com)

15 Signs That Part Two Of Double Dip Has Begun (endoftheamericandream.com)

Squatters move into upscale neighborhoods (msnbc.msn.com)

Tighter Credit Has Upside: Fewer Bankruptcies (nytimes.com)

Comerica bank delaying deposits to generate fines? (slycapital.wordpress.com)

Janet Tavakoli on the "Myth of the Immoral Debtor"; Email from Charlie Munger student (Mish)

$160 billion in option ARM loans outstanding (doctorhousingbubble.com)

Warren Buffett: It's 'Common Sense,' 'We're Still In A Recession' (huffingtonpost.com)

Warren Buffett: Raise Taxes On The Rich, Already! (tpmdc.talkingpointsmemo.com)

Americans Vastly Underestimate Wealth Inequality (huffingtonpost.com)

Sue The Bailout-Sucking, Bonus-Paying Bastards! (dailybail.com)

Investors cheer indictment of L.A. real estate mogul (latimes.com)

Mortgage interest deduction has broad support among ignorant voters (thehill.com)

Volcker, smarter, Says Fixing Broken' Mortgage Market Should Be Priority (bloomberg.com)

Retirees Duped by Derivatives With Structured Notes Sale Surge (bloomberg.com)

Actuaries Insist We've Got to Retire Later (miller-mccune.com)

For Many, Health Care Relief Begins Today (nytimes.com)

Amid mountain of paperwork, shortcuts and forgeries mar foreclosure process (washingtonpost.com)

Fort Lauderdale man's paid-off house sold in foreclosure mistake (sun-sentinel.com)

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Thu Sep 23 2010

Housing isnt even close to stabilizing (marketwatch.com)

Foreclosures nearly 50% of Phoenix existing-house activity (nationalmortgageprofessional.com)

Foreclosure, REO sales account for 67% of Phoenix house buying (housingwire.com)

Houses Lost To Foreclosure Jump 25% (collectionscreditrisk.com)

County foreclosures increase (coloradoan.com)

Foreclosure – Top Ten Things NOT To Do (staugustine.com)

Shadow Inventory Signals Three Years of Falling Prices (irvinehousingblog.com)

Government tries to prevent falling prices, but prevents true price and growth (online.wsj.com)

Federal Reserve Destroying Your Savings For Your Own Good (finance.yahoo.com)

On the GMAC Foreclosure Stories (calculatedriskblog.com)

GMAC Spotlight on 'Robo-Signer' (online.wsj.com)

Ally Financial Robo-Signer may affect other mortgage companies (washingtonpost.com)

No. There's no life at MERS (stopforeclosurefraud.com)

Housing Kills Stock Rally (bloggingstocks.com)

More cracks in Toronto housing market (business.financialpost.com)

Reserve Bank of Australia plays down obvious housing bubble (businessspectator.com.au)

Housing bubble in Malaysia (mysinchew.com)

Third world America (macleans.ca)

The Most Affordable and Most Expensive Housing Markets (blogs.wsj.com)

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Wed Sep 22 2010

A Cool Summer for Housing (nytimes.com)

Foreclosures, repossessed houses still flood market (savannahnow.com)

Prices coming down faster in prime California cities (doctorhousingbubble.com)

Fannie and Freddie: guilty? (economist.com)

Wall Street's greatest heist: the Tarp (guardian.co.uk)

Berkshire Hathaway's Munger approves of bailouts for the rich, but not for you (Mish)

The Bush tax cuts: an entrepreneur's perspective (latimes.com)

IMF fears 'social explosion' from world jobs crisis (telegraph.co.uk)

Beijing will burst its own bubble (businessspectator.com.au)

Recession's over, economists say to a skeptical public (latimes.com)

Recession's end means relapse (marketwatch.com)

GMAC Mortgage Mishandled Affidavits on Foreclosures (bloomberg.com)

GMAC Halts Foreclosures in 23 States for Review (nytimes.com)

How Serious is the GMAC Problem? Pretty Serious and Not Just GMAC (nakedcapitalism.com)

What Obamacare Delivers, This Week (dvorak.org)

Patient Protection and Affordable Care Act (en.wikipedia.org)

New Features On Patrick.net (patrick.net)

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Tue Sep 21 2010

SF Bay Area House Sales Hit 18 Year Low (sfappeal.com)

More than half of Reno-area mortgages underwater (sfgate.com)

More foreclosures reason for fewer upside-down houses in Reno (rgj.com)

Good News: The Great Recession is Over; Bad News: It Doesn't Feel Like It (Mish)

Recession is over? Not for the housing market (money.cnn.com)

Latest prices, sales figures show that US real estate market stagnating (propertywire.com)

U.S. house prices will resume decline (mybudget360.com)

House Equity Lines of Credit, the Next Looming Disaster? (realestatechannel.com)

GMAC denies reports of foreclosure moratorium (marketwatch.com)

GMAC's Full Letter To Agents… Something Does Not Add Up (zerohedge.com)

GMAC and Foreclosure Fraud Mess: Shit Hitting Fan (nakedcapitalism.com)

Consumer debt decline because banks give up on collecting (contracostatimes.com)

US Government hiding true amount of debt (news.com.au)

Of Course We're Not Going To Pay Back The Chinese (dailybail.com)

How Will Foreclosures Play Out in Midterms Elections? (pbs.org)

House Bill Would Force Lenders to Decide on Short Sales in 45 Days (dsnews.com)

Walking away from mortgage gets easier when neighbors do it (tbo.com)

Their house was sold by mistake (mortgage.ocregister.com)

Now scavengers have started stealing bricks from houses (nytimes.com)

Wall Street Bankers and the Reptiles They Resemble (dailyfinance.com)

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Mon Sep 20 2010

The Bottom Is Still Years Away (dailyfinance.com)

Housing data not expected to sparkle (marketwatch.com)

Where's the Foreclosure Flood? (blogs.wsj.com)

More Delinquent Mortgages Entering Foreclosure Pipeline (realestatechannel.com)

Wells Fargo Dumping Title Risk of Forclosures on Hapless Buyers (nakedcapitalism.com)

Wells will dump soon (piggington.com)

Lowered price from $3.15 million to $2.6 million, to no avail (baycitizen.org)

Household Net Worth off $12.3 Trillion from Peak (calculatedriskblog.com)

State, Bay Area lose more jobs in August (contracostatimes.com)

Middle class bailed out banks, got nothing in return (Mish)

Middle class running as fast as it can (marketwatch.com)

The Tax-Cut Racket: Socialism For The Very Rich (nytimes.com)

The Secret Election (nytimes.com)

Some in China ready to drop US debt and pour money into own nation (dallasnews.com)

The American economy: The great debt drag (economist.com)

Defaults Account for Most of Pared Down Debt (blogs.wsj.com)

Wants government out of way to let housing market recover (newstimes.com)

Banks win delay over bid to raze abandoned condo complex (sun-sentinel.com)

Psychology of a housing market (thirdwavegroup.com.au)

Why housing bubbles aren't good for you (yourhome.ca)

Thank You Michael A. ($40) and SandF.net ($5) for your kind donations.

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Irvine Home Address … 44 BLUE HERON Irvine, CA 92603

Resale Home Price … $18,950,000

Home Purchase Price … $9,754,800

Home Purchase Date …. 4/8/2008

Net Gain (Loss) ………. $8,058,200

Percent Change ………. 82.6%

Annual Appreciation … 26.9%

Cost of Ownership


$18,950,000 ………. Asking Price

$3,790,000 ………. 20% Down Conventional

4.31% …………… Mortgage Interest Rate

$15,160,000 ………. 30-Year Mortgage

$3,621,450 ………. Income Requirement

$75,112 ………. Monthly Mortgage Payment

$16423 ………. Property Tax

$750 ………. Special Taxes and Levies (Mello Roos)

$1579 ………. Homeowners Insurance

$550 ………. Homeowners Association Fees


$94,414 ………. Monthly Cash Outlays

-$5604 ………. Tax Savings (% of Interest and Property Tax)

-$20662 ………. Equity Hidden in Payment

$5917 ………. Lost Income to Down Payment (net of taxes)

$2369 ………. Maintenance and Replacement Reserves


$76,433 ………. Monthly Cost of Ownership

Cash Acquisition Demands


$189,500 ………. Furnishing and Move In @1%

$189,500 ………. Closing Costs @1%

$151,600 ………… Interest Points @1% of Loan

$3,790,000 ………. Down Payment


$4,320,600 ………. Total Cash Costs

$1,171,600 ………… Emergency Cash Reserves


$5,492,200 ………. Total Savings Needed

Property Details for 44 BLUE HERON Irvine, CA 92603


Beds: 5

Baths: 6 full 3 part baths

Home size: 13,500 sq ft

($1,404 / sq ft)

Lot Size: 40,208 sq ft

Year Built: 2006

Days on Market: 12

Listing Updated: 40444

MLS Number: U10004314

Property Type: Single Family, Residential

Community: Turtle Rock

Tract: Shdc


VILLA TRANQUILLO – Behind the gates of Shady Canyon, perched on a one acre site, sits this spectacular Tuscan inspired villa. As you enjoy the reflection of one's passion you will see work of the finest craftsmen teamed to turn design dreams into reality. The setting is exceptional. The eighty foot infinity pool, so married to the space that you would never know it is also a lap pool, presents a backdrop for tranquil vistas of rolling hills and open space which will never be developed. At night the majestic fifty foot cedar trees silhouette the sky as you enjoy the twinkle of distant lights and the quiet of low density living. The latest technology, teamed with a tasteful sense of design, brings old world charm to a new level – creating a feel throughout the home of utter comfort. From furnishings to artwork(included in the sale) a level of taste and sophistication rarely matched.

That is a very good description. There are just enough emotive words to make it interesting, but not so many as to be over the top and cheezy.

17 thoughts on “IHB News 9-25-2010

  1. MikeInIrvine

    “VILLA TRANQUILLO”… $18 million house and this is what substitutes for marketing?

    When the neighbors house goes on sale next month it they want to call it “Rancho Relaxo”.

  2. Chris

    Bought for $9 a few yrs ago and now is selling for $18.


    Hey PR, your theory is correct. We’re priced out. Oh damn. I’m hitting my head against the wall as I’m typing this. I’m crying now.


  3. Sue in Irvine

    That has to be a typo with an extra 1 in front of the 8. I get the green throw when we watch a movie.

  4. rkp

    It would be fun to rent this for a week and throw a party every night. Maybe the next IHB meeting can be in one of these 🙂

  5. Swiller

    I’m not sure about this home, is this the McGwire estate?

    The price of homes and the cost to produce them varies significantly in Shady Canyon, as well as in Pelican Hills, Pelican Crest, and Pelican Point. We have already seen some of the “investor” properties foreclosed on featured here, have we not?

  6. FoolishRenter

    Let’s see some pictures of your LV house and a blog on scoping out the house and biding process.

    In the above picture, is that a putting hole in the lawn (center bottom of the picture)?

  7. Planet Reality

    The most recent data has the Irvine median house price at $888K for zip code 92603, a telling sign indeed.

  8. Planet Reality

    IR please stop the ridiculous sense of urgency in investing in you fund. It’s the same BS you’ve made fun of in MLS listings. We all know you like any small time guy will take money at any time.

    The funds closing forever? Are you for real? I wish you luck but please end the hypocrisy.

    1. IrvineRenter

      The fund is closing forever. Once I sell the first property, I will not accept any more investors. The urgency is real for anyone who wants to invest.

      To accept money once there is profit or loss, I would have to use asset allocation layer accounting and spend an enormous amount of time and energy managing the fund rather than looking for investments.

      Now that I have rationally answered your question, I echo Walter’s comment, why do you bother to read and comment?

      Perhaps you don’t think I am for real, but over 40 investors disagree with you.

    1. Planet Reality

      It’s only fair that there is some accountability recognizing the bloggers comments and subsequent behavior. This is not personal bashing, it’s the reality of this particular blog. Money is a clear motivator in how the blogger has communicated over time. I want IR to do well for himself and his family, but I think my comment is more than fair.

  9. theyenguy

    In as much as its IHB News Day, I thought I would share the Tyler Durden Article …. Why QE2 + QE Lite Mean The Fed Will Purchase Almost $3 Trillion In Treasurys And Set The Stage For The Monetary Endgame.

    I had been thinking that the spigots of investment liquidity had been turned off now that QE 1 was over, and that the yen carry trades, such as the EUR/JPY, seen in chart FXE:FXY, have reached full expansion.

    But after reading the lined article, I believe that further fiat asset expansion is a quite likely as the Fed is likely to announce QE 2, a massive $3.0 Trillion Program to Purchase US Treasuries At Its November 3, 2010 FOMC Meeting …. accordingly the plan will monetize US debt.

    Under Mr. Durden’s scenario, a person owning a mortgage will definitely seek to refinance the loan. Think of QE 2 as the ultimate HELOC, providing the best-ever, mortgage equity withdrawal benefit.

    US Government Bond holders will sell their investment to the Fed, and a sane person will buy gold. And the poor people, like myself, will pray that they have money to buy food, traded by the agricultural commodity, FUD.

    With QE2, the Fed will in effect own all mortgages. For those not underwater, it will be wise to put the house on the market at a sell-able price; get one’s equity out, that is read buy me today insanely low price, and buy gold.

    All associated US Government debt, like Municipal Bonds, MUB, and California Municipal Bonds, CMF, will be worthless. QE2 will kill all state and municipal financing; the pink slips will flow like water from a fountain.

    The dollar, $USD, will function in the US, for US products, but that is all.

    In the ensuing global trade destruction, countries will create new alliances, leaders will announce framework agreements establishing regions of global governance, with of course, loss of national sovereignty. The Bank of International Settlements, BIS, will establish an international central banking system to serve as a global financial clearinghouse.

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