This is a regular equity sale. It is not a short sale or bank owned property! You can be living in your new home in 30 days or less! Great private location from this private end unit perched high on a hill with views of a private wooded area and city lights through the trees. The home has been completely remodeled and includes granite counter tops, updated lighting, new baseboards, casing, doors, remodeled bathrooms and much more! This is a fantastic opportunity to own a completely remodeled home in a unique location.
You will not find this property on the MLS. For exclusive access contact us a sales@idealhomebrokers.com.
Come by our open house from 11-2 on Saturday 12 June 2010.
We have reached agreement with several listing agents, including our own Shevy Akason, to provide exclusive, private access to for-sale properties before they are listed on the MLS. Many of these properties will be offered at a reduced price.
This is a regular equity sale. It is not a short sale or bank owned property! You can be living in your new home in 30 days or less! Fantastic views from this private end unit perched high on a hill overlooking a fantastic park that includes a playground, barbeque, picnic tables, and a basketball court. This end unit has a private patio and is surrounded by a huge greenbelt. The home has been completely remodeled including a whole new kitchen with new cabinets, granite counter tops, updated lighting, new baseboards, casing, doors, remodeled bathrooms and much more! This is a fantastic opportunity to own a completely remodeled home in a unique location.
You will not find this property on the MLS. For exclusive access contact us a sales@idealhomebrokers.com.
Come by our open house from 11-2 on Sunday 6 June 2010.
Buying a personal residence at trustee sale can be financially rewarding. Ideal Home Brokers will locate and research the properties as well as attend the many auctions necessary to obtain one.
For buyers it isn't always about the discount as simply having "first dibs" is a big advantage, the fact that it is discounted to resale is a bonus. For instance, many properties that are tied up as unapproved short sales end up going to auction. All the finance buyers in the short sale queue get bumped by the purchasers at Trustee Sale. Cash brings the power to cut to the front of the line.
Also, In today's zero interest-rate environment, having cash tied up in real estate can provide a return on investment though saving on rent — assuming of course the property does not decline in value while during the holding period.
Page 1
When we designed the IHB Fundamental Value Reports, we determined what information was most relevant, and we organized the reports to present this information clearly and concisely.
The cover page has pictures if they are available. The vast majority of foreclosures never hit the MLS, and often all we can get is a picture of the front elevation and perhaps a floorplan. We advise owners to budget for complete renovations. If they do not need to spend the renovation money, they should consider it a savings. Most will spend the money to enjoy their home once it is properly budgeted.
We present the basic property information: address, beds, baths, and so on. We show the scheduled date of the Trustee Sale (subject to postponement), and the published opening bid. The published bid is often meaningless as these bids are frequently dropped at the last minute.
The maximum bid amount is the most we recommend buyers pay for the property. At that price level, the all-in cost leaves enough room to get out at breakeven after commissions and closing costs if it turns out the buyer does not like the property. If people want to bid higher because they really like the property, that is their decision. If they want to bid less to obtain a bigger discount, we charge additional fees to attend the auction because most often it is a waste of time. Remember, a maximum bid doesn't mean it will cost the full amount; it represents the most that could be paid for the property.
The bold-faced items are the two data points of high importance. The first is the date by which a buyer must make a decision to bid on the property. If a buyer is interested in a property, we must do additional title research and we don't want to scramble around on the morning of the sale and risk missing it. The second key datum is the total amount of cash required on the day of the sale. Most often buyers have funds tied up in accounts that may take a few days to get liquid. The full amount is required in cash on the day of the sale. If a buyer is short of cash, nobody goes to the auction.
We provide our opinion of the likelihood of success given the foreclosure market comps, and we provide a breakdown of the total cost as well as the savings versus resale.
The final two lines show the annualized savings that accrue to an owner by eliminating rent. This savings divided by the total investment yields a capitalized ownership savings rate that owners may compare with the returns their are obtaining in other investments. This number is generally quite small, and it usually does not provide a return justifying the risk, but in today's savings environment, it is usually far better than a certificate of deposit.
Page 2
The second page provides the detail for the summary numbers on page 1. The sale day cash requirement is the sum of the maximum bid amount and the trustee sale fees. The total trustee sale cost includes renovation and improvements, property taxes (both back and current), an allowance for tenant move out and cash-for-keys if necessary, and transer taxes due. The cost of ownership includes the standard costs minus any financing costs as this is an all-cash deal. The comparable rental rate minus the cost of ownership is the monthly savings the owner enjoys by not having a house payment.
The bottom of page 2 has comparable information for trustee sales, resales, and rentals.
Page 3
Page three shows the various comparable ranges and cashflow values with a summary chart.
The owner of today's featured property bought it for well under his current, delusional asking price. Despite his delusions, he did get a great deal on a large and very desirable property in Turtle Rock. If he is fortunate, the next leg down in pricing won't drop below his purchase price. If he is very fortunate, some fool will buy this from him and make him half a million dollars.
Excellent location! Panoramic views of hills and city lights! One of the best street in Turtle Rock! Completely remodeled. Spacious, open and convenient floor plan, 5 bedrooms and 3 full bathrooms. Main floor bedroom with full bath. Gourmet kitchen with breakfast nook. New cherry wood cabinetry, granite counter tops and state-of-the-art stainless steel appliances. Remodeled bathrooms. Remodeled fireplaces in living room & family room. Cathedral ceilings in the formal dining room. Premium hardwood flooring. Designer carpeting in bedrooms. New dual pane windows. New garage doors. Freshly painted. Spacious private gated courtyard. Endless views from cozy back yard. Fabulous association amenities pools, spas, tennis courts, club house, playgrounds & parks. Steps from award winning Bonita Canyon Elementary School & park area & minutes from desired University High School and UCI.No Mello Roos, low association fee. Excellent opportunity!
The spending former owners
The owners who lost this house in foreclosure owned longer than my property records go back. The earliest record I have is a $100,000 HELOC in 1997. It is safe to assume these owners paid very little a very long time ago.
On 12/19/2002 these owners refinanced thier first mortgage for $450,000.
On 8/25/2004 they refinanced again for $650,000.
On 9/7/2006 they refinanced one last time for $825,000.
It looks like they needed an extra $200,000 every two years to keep up with the Joneses.
I am surprised this went to auction because they appeared to have equity on auction day. Now the new owner has it.
Foreclosure Record
Recording Date: 05/26/2009
Document Type: Notice of Sale
Foreclosure Record
Recording Date: 02/18/2009
Document Type: Notice of Default
The MLS for Foreclosures
Ideal Home Brokers is the multiple listing service for foreclosures. If there is a property coming to auction, we will facilitate bidding in that market just as others do in the resale market. Many people search for foreclosures because they want to find a bargain, but most people have no idea how to research properly, and even fewer know the mechanics of the trustee sale. We do.
Arizona officials are trying to help house debtors with bailouts. They recognize the moral hazards, and they struggle selecting whom to save and whom to let lose their houses.
Today's featured property is a Trustee flip in Woodbury scheduled for sale on 30 March 2010.
Sweet dreams come from HELOC abuse. Every house debtor and kool aid intoxicated knife catcher is riding the dream of endless appreciation and unlimited spending power. Sweet dreams indeed.
What happened to the American Dream? Has a "better, richer, and happier life" come to mean money for nothing? Consumption without production? Gain without contribution?
[Gary Setbacken, right, talks to his neighbors in the Tatum Ranch community of Cave Creek, Ariz. Mr. Setbacken and his wife, who arrived in 1993, paid down their mortgage even as home prices skyrocketed.]
CAVE CREEK, Ariz. — … Arizona is one of five states that, with money from Washington, hopes to help at least some of these people hold on to their homes. Under a new, federally financed pilot program for the hardest-hit housing markets, state officials will decide who will get a homeowner bailout, and who will not.
The idea is as controversial in Washington as it is here. Do the neighbors next door who lived beyond their means — the ones who, say, bought that house they could not afford, or who binged on home equity loans to buy new cars and flat-panel TVs — really deserve to be bailed out with taxpayer dollars? Do they deserve to have some of their debts forgiven? And is that fair to the cautious ones who paid their mortgages?
I am amazed those questions are not rhetorical. Someone, somewhere believes HELOC abusers should be given a pass — forgiveness without consequence. At least a few officials — the few whose primary job is not to enrich lenders — are concerned about moral hazard and do not want to help those that do not deserve it.
For the people of Cave Creek, the answers will fall to state officials like Michael Trailor, the director of the Arizona housing department.
A former real estate developer, Mr. Trailor knows firsthand about the perils of the property market.
“I feel for all of them,” Mr. Trailor said of the struggling homeowners. “But we do not have the funds to help all of them. If we can help 6,000 people, which ones should we help?”
The government never fails to reinforce my cynicism; they develop a program to keep house debtors paying for a house with no equity praying for a bailout that isn't coming. More people will win the lottery than will be helped by this program or any other.
If lenders keep people in place long enough, debtors will be invested in their own poor decision, and they will endure. It will take forever for house debtors to pay off these monster loans. As each debtor gives up and sells, it adds supply and prevents appreciation from saving other debtors.
The federal government will pay for pilot programs in Arizona, California, Florida, Michigan and Nevada with $1.5 billion from the federal banking rescue. That figure is a small fraction of the funds that would be needed to help all of the people at risk. Arizona, for instance, received $125 million. If it allocates $30,000 of aid for each residence, 4,166 homeowners would benefit. But the Phoenix area is bracing for as many as 50,000 foreclosures this year alone.
Mr. Trailor said he was reluctant to help homeowners with “self-inflicted wounds,” like those who overspent or cashed out the equity in their homes during the bubble years. He wants the banks to match the public money being used for debt forgiveness, and he is focusing on people whose incomes have fallen but who still hold jobs.
He is considering an approach known as “earned forgiveness,” where the state and the banks promise to forgive mortgage debt later on, but only if the homeowners stay in their homes and keep making their payments.
OMG! How much more obvious can they be. Prove you're worthy of debt slavery by making onerous payments with no hope of equity, and the government will modify your loan in a way that keeps you in your house and maintains your fantasies of appreciation. What a deal!
Delusion is the new American Dream.
Three out of four abuse their HELOCS
Do you remember to old Trident gum ads, "Four out of five dentists surveyed…?" Well, Three out of four neighbors surveyed for this article were HELOC abusers. This is one typical street in a typical suburban town. From the many cases I have documented here, do you think Irvine is any different?
New Heroes
The new reality is evident on East Montgomery Road, where the bust is playing out in a variety of ways.
There are the Setbackens, at 4355, who arrived in 1993 and paid down their mortgage even as home prices skyrocketed. [lower right couple.]
I think you all know how I feel about what these people did; they observed the insanity around them and failed to participate. They passed up hundreds of thousands of dollars in consumer spending, and now they are going to keep their house while others search for rentals. They are true heroes and great role models.
Rationalizing their own bailout
Across the street are the Chatburns, Tim and Leslie. They also arrived in the 1990s, before prices exploded, but struggled recently to keep up with the bills after an injury kept Mr. Chatburn out of work.
Mr. Chatburn, an air-conditioning repairman, used to say that bailing out his neighbors would be unfair, but he changed his mind after watching news programs about the rescues of big financial companies like the American International Group.
“I started thinking about all this money we paid as taxpayers to the banks,” he said, “and I thought, ‘Why don’t we take care of our own a little bit?’ ”
Why don't we take care of our own? Because they are HELOC abusers! Let me buy a house and spend foolishly so I can reach into his pocket and see how he feels.
And notice the bullshit about how an injury added $100,000 to his mortgage. Perhaps, if he was injured and unable to earn as much money, they should scale back on lifestyle expenses and even downsize. No, that would require sacrifice. It is much more expedient for house debtors to live as entitled and pass the bills on to us.
Ms. Carter, at 4344, arrived in 2005, as the bubble was inflating. She took out tens of thousands of dollars in home equity for repairs and other items, and by this year, she was underwater on her mortgage by $86,000. A single mother, she moved out this month, days before her home was sold in a short sale, which meant her mortgage lender allowed her to sell for less than the value of her mortgage and the lender took the loss.
What "other items" did she purchase? What was she entitled to that she could not afford?
And then there is the young couple with a toddler, at 4343. They moved out on the same day as Ms. Carter, before a scheduled foreclosure of their home that was $115,000 underwater. The couple, who asked not to be named, also bought near the peak and took out a home equity loan to pay off their student loans and other debts. Then, a year ago, they stopped paying their mortgage, after both of them lost their jobs for a time. They now have office jobs again.
This couple really benefited from the bubble. Their student loans could not be bankrupted out of, but since they paid it off with a HELOC — a debt obligation removed in bankruptcy — they could wipe the slate clean. Of course, like everyone else who did what they did, they are hoping they never hear from either their former lender or the tax man and they will not need to declare bankruptcy. What becomes of their $115,000 debt?
Who should we help?
The Arizona official faces an easy decision about who to help. Have you noticed that the people you would feel good about helping are those that do not need it? And those people who you do not feel good about helping — HELOC abusers — are the ones who are going to get help? The frugal couple who paid down their mortgage; I would help them out if they became unemployed. The HELOC abusers; screw them, they can move into their cars like unemployed renters.
Mr. Setbacken, a salesman, said he had warned his neighbors not to get in over their heads but they did not listen. He and his wife might have stepped up to a bigger house if they, like so many of their neighbors, had gambled recklessly on the housing market, he said.
“Everybody that I know that got themselves in trouble was because of one word: greed,” said Mr. Setbacken, 63, a former Marine who remains in tip-top physical condition. “I have no sympathy for any of them, on the financial end. When I hear about dropping the amount you actually owe, I could stick my finger down my throat.”
I could care less about the default, it is paying the bill that makes me want to puke.
… Ms. Carter said she felt guilty about leaving. With her short sale, the price of the home went down to the benefit of the new homeowner. But it dragged down prices in the neighborhood, she said.
Ms. Carter, a mother of two and a real estate agent who poses as an angel with wings on her Web site, has been through hard times before. Years ago, she considered filing for bankruptcy but then changed her mind. She said she was accountable for her actions and was making what amounted to a business decision to leave her home.
“I had to take emotion out of it,” said Ms. Carter, 36. “If I had a business, and every single month I was losing money, would I keep on paying? No, I wouldn’t.”
Strategic default is now the norm. Everyone has finally realized it makes no sense to keep paying when they are at scuba depth.
Sitting at her dining room table, before a large tank of fish, she recalled how she had made this a perfect home. It is one of the few on East Montgomery Road with grass in the yard, an expensive proposition in the desert. A Mercedes sits in the driveway.
She said she did not feel she deserved to have her debts forgiven, but added that if her mortgage had been lowered, she would have tried harder to stay. The worst part, she said, is that her decision will hurt Mr. Setbacken, who has watched out for her over the years. “For Gary, he’s going to have to deal with the ramifications of what I’m doing because I’m bringing his property value down,” she said. “I pray at church. I feel horrible for what I’m doing to my neighbors.”
That guilt will disappear a nanosecond after she leaves the area. She will not keep in contact with any of those people, and she will not give them a second thought. She wouldn't worry so much about what the neighbors thought about her if she realized how little they did.
Later, after Mr. Setbacken talked to Ms. Carter — she “cried and cried and cried,” he said — he had a change of heart. In an e-mail message, he said that perhaps wealthy Americans could donate money to aid homeowners. If he had more money himself, he might help some neighbors pay their mortgage bills.
He feared that he looked heartless and sent an apologetic email to the reporter. He has nothing to be ashamed of. He is the only character in this story worthy of respect and admiration.
“I have focused on the financial issues during these times and overlooked what was more important, the emotional stress that my neighbors are feeling,” Mr. Setbacken wrote. He walked down East Montgomery Road and gave a bottle of wine to the young couple facing foreclosure. It was, he said, “to help them pack.”
That is compassion. He helped them get on their way to their new sustainable life with fewer entitlements. It is far more compassionate to help them pack than try to keep them in a home they cannot afford, particularly when someone who can afford the home is waiting for it to be vacated.
According to the listing agent, this listing may be a pre-foreclosure or short sale.
This property is in backup or contingent offer status.
Lovely home in the award winning Woodbury Community, a perfect place to live, dine and shop. Conveniently located next to the Woodbury Towncenter, I5 Frwy. and the O.C. Great Park. This luxurious home features a formal dining room, a great room perfect for entertaining, harwood floors throughout 1st level, Santa Cecilia granite counter tops, plantation shutters, recessed lighting w/ dimmers, a walk-in closet and balconies. —- Enjoy the Woodbury outdoors! Jeffrey Open Space Trails, lagoon & competition pools, tennis, basketball and volley ball courts, play parks, bbq and much more. Agents, please see remarks.
It is looking increasingly unlikely this will be an approved short and will instead become a trustee sale.
Short Sale Asking Prices
Have you noticed that short sale asking prices are low just to attract 20 offers? Today's featured property is no different. The resale comps suggest a value of about $590,000.
115 Spanish Lace — A 3 bed 1,960 SF CONDO — 2006
12/09/2009
$ 550,000
84 Townsend 1 — A 3 bed 2,100 SF CONDO — 2005
12/22/2009
$ 594,000
81 Mission — A 3 bed 1,960 SF CONDO — 2005
8/28/2009
$ 560,000
53 Chantilly — A 3 bed 1,960 SF CONDO — 2006
12/31/2009
$ 625,000
Is the bank going to sell this property as a short for less than comparable sales at $549,000?
Lenders use the short sale offer time to establish fair market value for resales which is useful information for their loss mitigation teams. Many times they are a servicer who isn't authorized to sell as a short which is why you often see properties go to foreclosure when there are short sale bids at higher prices. Knowing fair market value also gives the lender guidance on how much they can drop a bid at auction.
Irvine has been seeing action among cash buyers, and the gap between trustee sales comps and resale comps is small on the more desirable properties. The trustee sale comps suggest this property will go for about $490,000 at auction; although, we would not bid that high. Even at a $571,912 trustee flip price, the maximum bid is probably too low to get the property.
84 TOWNSEND — A 3 bed Condominium — 2005
9/23/2009
$ 502,200
92 TOWNSEND — A 3 bed Condominium — 2005
12/3/2009
$ 451,000
68 TOWNSEND — A 3 bed Condominium — 2005
2/3/2010
$ 501,000
89 WINDING WAY — A 3 bed Condominium — 2005
2/10/2010
$ 515,597
77 CANAL — A 3 bed Condominium — 2005
2/17/2010
$ 430,000
84 Townsend was a quick flip for about a $90,000 gain. Rental parity is a surprising $585,000, courtesy of Ben Bernanke and 5% interest rates.
62 Shadowplay — 3 bed SF CONDO — 2,146
33
$ 2,900
28 Pink Sage — 3 bed A SF CONDO — 1,745
66
$ 2,800
If you believe rents and interest rates are stable, or if you see this property as a long-term personal residence, there are reasons to consider this property.
People want to play even if they have broken strings. Many money renters squat in homes they are not paying for. They fail to pay their home owners association dues as well as their mortgages, but they still want access to the facilities as if they were current on their dues.
I first discussed Home Owner Associations, HOAs, in the post I Want My HOA.
Homeowners associations are formed to maintain facilities in common ownership, and to maintain property values in an area through the enforcement of covenants, conditions & restrictions (CCRs). It has been shown, painfully, that individuals acting without governance will allow their properties to deteriorate, appropriate public spaces, and express their individuality in ways which harms neighborhood values (anybody remember the clip below from Cheech and Chong's Next Movie?).
Later, with help from Gus Ayers, the IHB published this post: Ownership Cost: Homeowners Associations. That post has a detailed discussion of HOA related matters.
Today, we look at how Florida has cracked down on owners who are not paying their HOA dues.
Melissa Solis said she understands that she can't use her community pool or clubhouse because she's late paying her homeowner-association fees.
But it's unfair, she said, that security guards at the gated entrance to her neighborhood prevent her friends, family, babysitter and even the delivery man from Winter Garden Pizza Co. from getting to her home. They wouldn't even allow her mother-in-law inside the gates for a family birthday party.
Instead, she has to meet her visitors outside the community's entrance, pick them up and drive them inside in her car. Unlike residents who are current with their fees, even Solis cannot enter through the automatic gates; she must instead get the guard's approval to access her home.
"I think it's more them trying to humiliate us," said Solis, who works in food services. "It's very embarrassing for our daughter. She's 10 years old, and she doesn't understand that the economy is tight and Daddy doesn't have a job."
[Melissa Solis, who lives in Stoneybrook West, says she feels like the homeowners association is trying to humiliate her for not paying overdue fees. (GEORGE SKENE, ORLANDO SENTINEL / March 16, 2010)]
Unfair? She isn't paying her share of the maintenance for the facility. Why should she be able to use the facilities? It is only her sense of entitlement that makes it seem unfair.
How many of you who regularly get Disney passes didn't do so during the recession? Should Disney continue to let you in the park?
Stoneybrook West's guard-shack standoff underscores the mounting frustration of homeowner and condominium associations in the Orlando area and across Florida. Many associations face mounting delinquency rates of 30 percent to 50 percent, in a state with one of the highest foreclosure rates in the country. As state legislators meet in their annual session this month and next, they will consider several bills designed to ease the financial woes of homeowner and condominium associations.
One bill, filed by state Sen. Mike Fasano, R-New Port Richey, would allow associations to suspend residents from using common areas if they are three months or more behind paying fees. It also empowers associations to collect fees from renters, and prohibits association members from serving on the board if they are three months delinquent.
I don't think they thought this one through; if you were a renter, and if you were approached by a representative from your landlords HOA and asked to pay, what would you do? After I finished laughing, I would either move, or pay the fee and deduct it from my rent. If the deadbeat landlord had the nerve to complain, I would point out their breach of contract and move — I might even sue for damages.
"These homeowner associations are crippled, and they're looking for any kind of edge," said Sarasota lawyer David Muller, co-executive director of the Community Association Leadership Lobby, which represents more than 4,000 associations. "But actually preventing a guest from accessing the gates — that's something that's going a little too far, in my opinion and when concerning the statutes."
But the law is on Stoneybrook's side, said Orlando lawyer Jim Gustino, who represents the 13-community golf-course development in Winter Garden. State Circuit Judge Thomas B. Smith ruled last year that the association for sister development Stoneybrook East, in east Orange County, could restrict guest access for residents who are 90 days late making payments and who were given the chance to start a payment plan.
"We have to bring whatever lawful pressure that we have to bear on these folks. No one feels good about it, but it does result in collecting money," Gustino said. "Many folks will, by some miracle, come up with the money they couldn't come up with before, because they don't want their family members to be denied entry."
As a result of such actions, Stoneybrook West's delinquency rate is 5 percent or 6 percent, Gustino said, but only because it has been aggressive in keeping residents up to date. Dozens of homeowners who face financial hardships have entered into payment plans, he said.
"If you don't take an aggressive enforcement position, you will discover you will be ignored," the lawyer said. "Associations try to be nice to people and try to be more accommodating than Stoneybrook West is with its people and, as a result, those association are in distress. They have to increase dues and, as a result, they have more defaults."
I can understand their pressures to get people to pay. HOAs do not have outside sources of revenue, so people who do not pay get a free ride on everyone else.
Stoneybrook's actions did raise some concerns among lawyers and other individuals who cited Florida statutes that require associations to provide access to their residents.
Veteran homeowner-association board member Hobie Fisher, who serves on two boards for the Avalon Lakes community in east Orange, said his board have been actively taking over properties in foreclosure. But prohibiting access to residents' guests, he said, is going too far.
"I think that's wrong. You can't deny people the right to come in there. You can't deny people and their guests the right to property," Fisher said.
Stoneybrook's prohibition of certain guests also raises concerns about gated communities. Fisher, half jokingly, said such subdivisions should just charge visitors a small toll to help underwrite community expenses.
The idea is good although impractical. If Ms. Solis is embarrassed now, how will she feel when her mother is charged $1 to visit?
Solis said her view of living behind gates has changed since the blockade began keeping her friends and family at bay.
"I moved here thinking, ‘A gated community, how nice,' " she said. "If I knew then what I know today, I would have never gotten into a gated community."
What would happen if we did this here in Irvine? We have dozens of gated communities and most of our facilities in open communities are gated. We would quickly find out who isn't paying their dues….
Gustino said the very expense of operating a guarded-and-gated entry makes it imperative that all residents pay their fair share of those security costs.
Solis estimated that she is behind about $1,400 on her association fees. She said she would like to get current, but her family's budget has been cut due to her husband's unemployment. She said she has been tolerating the gate situation for more than a year before she got fed up this week and decided to speak out.
"You know, I'm not going to back down because they try to intimidate you," she said. "At least I'm going to hold my head up."
Perhaps some attorney will take on a case like hers to attempt overturning the Florida ruling, but other than that, I don't see what this woman can do about her exclusion.
What do you think about this practice? Should squatters who are not paying their HOA dues have continued access to the facilities?
Ideal Home Brokers and Financed Trustee Sales
Since we launched our Trustee Sale buying service in January, we have been exploring methods of structuring a deal with various hard-money lenders. We have lined up two sources (which isn't enough) and we are now able to put financed buyers into Trustee Sale properties. Today's featured property may sell to a third party at auction on April 5. Thanks to 5% interest rates, recent comparable sales value the property at $460,700.
If a buyer steps forward and puts 3% down on a $446,879 purchase price, our hard-money capital partner will authorize us to go to auction and bid on the property. In the event we are the successful bidder, the property is automatically in escrow with the buyer who placed the down payment. We are discounting the property 3% from comparable sales because we don't have the uncertainty and market risk of searching for a buyer. The deal is attractive to the hard money lenders because they have very little risk when a buyer is already in escrow, and the offer is attractive to buyers because they obtain a discount from comps, and they have exclusive access to a market other financed buyers cannot access.
This isn't a negotiation. Based on the requirements of our hard money lender and the other costs in the deal, that is the price we must charge to make the deal work. Someone has been waiting on this property as a short sale, and the lender may approve the short before April 5, but if not, there is an opportunity to get this property at auction.
Next week, we will have a series of posts outlining the details of this offer, and for the remainder this week, I a profiling more eligible properties (anything under $600K). In short, we can put financed buyers into Trustee Sale properties at a 3% discount to comparable sales.
Featured Property
Today's featured property was first profiled last year in the post Dust in the Windrow.
Best of both worlds. .. detached homes with low maintenance yards and HOA ammenities . .. less land but well used so yard and patio are enclosed for privacy while grassy front yard is rolling lawn maintained by HOA. Living room with vaulted cathedral ceilings has double patio doors overlooking the rose garden and yard. Spacious kitchen has remodeled Euro-style cabinets with big island cooking area and breakfast bar. Direct access to laundry in garage and dining room/family kitchen with corner windows onto yard. Master suite is the only room perched above overlooking living room and corner windows over the yard. 2 Bedrooms down and next to bath. One has double door entry for use as work at home office or den or library.
ammenities?
This owner paid $530,000 on 11/9/2004. He used a $424,000 first mortgage and a $106,000 down payment. On 7/30/2007 he managed to get a HELOC for $98,055 which withdrew most of his downpayment (and earned him a HELOC abuse grade of D). Having obtained what he could, he defaulted in early 2009:
Foreclosure Record
Recording Date: 12/30/2009
Document Type: Notice of Sale (aka Notice of Trustee's Sale)
