Originally posted October 13, 2006

Address: 14 Posada, Irvine, CA 92614 (Westpark)
Plan: 2000 sq ft – 4/3
MLS: S446011 DOM: 115
Sale History: 1/6/2006: $865,000
1/29/1998: $345,000
Price Reduced: 07/25/06 — $979,000 to $949,000
Price Reduced: 09/08/06 — $949,000 to $929,000
Price Reduced: 10/03/06 — $929,000 to $899,000
Current Price: $899,000

This Plan D in the Promenade tract in Westpark was purchased by our flipper early this year and then put back on the market 6 months later on 6/20/2006. When the flipper bought the property he probably thought he received a great deal on the purchase. Why? Because the prior seller had originally listed it for $968,800 and our flipper picked it for over $100k less at $865,000. What’s funny is that our flipper thought he could sell it for even more than what the prior seller failed to. He put it back on the market hoping to make over $100,000!

After reducing the price a few times, our flipper has hopefully learned the risks of trying to catch a falling knife! He can only hope that he won’t have to bleed too much money to get out of this. If the house sells for the asking price of $899,000 and we assume 6% in selling costs, our flipper will lose about $20,000.

UPDATE #1 – May 18, 2007

After being on the market for 271 days, 14 Posada was relisted (MLS#S480142) on 3/19/2007 for $899,000.

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On May 3, 2007 the price was reduced to $869,000. After a total of 344 DOM, the price has dropped by $110,000 since it was first listed in June of 2006. It also seems like the house has been vacant the whole time.

If sold at the price of $869,000 and assuming 6% in selling costs, the seller is facing a loss of about $48,000.

Originally posted October 3, 2006

Address: 9 Stonegate, Irvine, CA 92602 (Northpark)
Plan: Plan 1 – 1980 sq ft – 3/2.5
MLS: S457264 DOM: 28
Sale History: 7/22/2005: $954,000
Current Price: $969,900

This SFR built by Shea Homes in the Rutherford tract in Northpark Square looks like a nice, cute starter home. Too bad the pricy Irvine RE market means you have to pony up almost $1 million for a starter home. Question for Northpark experts: What is Bella Rosa? Is it a part of Northpark Square?

The seller purchased this property in July 2005 for $954k. From what I can gather, there were two loans taken out: one for $763,000 and a second for $190,800. Add those up and what do you get?? One FB with a classic 100% financed purchase (okay, okay, they DID put $200 down)! Fast forward one year and it seems the flipper may have to sell because of a possible job relocation (for those with MLS access, see the Private Remarks). If sold at the asking price and taking into consideration 6% in selling costs, they will have to SPEND at least $42,000 to sell this home!

UPDATE #1 – May 18, 2007

Here’s the first of many updates to some of our older posts. After 163 DOM, 9 Stonegate sold for $939,000 on 3/2/2007. Assuming 6% in selling costs gives us a loss of $71,340!

Originally posted October 28, 2006

Address: 17 Georgetown #24, Irvine, CA 92612 (University Town Center)
Plan: 1100 sq ft – 2/2
MLS: S446969 DOM: 124
Sale History: 5/23/2005: $550,000
Current Price: $549,000 (Accepting Backup Offers)

University Town Center is a ‘village’ in Irvine that includes all the condos near the University of California: Irvine (UCI). There are many apartments in this area as well (owned by the Irvine Company of course). The proximity to UCI ensures that there is a large student population here.

I’m sure there are quite a few investors who purchased condos here to be used as rental properties. Those who bought years ago are probably doing real well if they have kept their properties – huge appreciation and positive cash flow make a nice cash cow! 🙂

But since prices for 2 bedroom units like this one are now in the mid 500s, it’s hard to make the numbers work as a rental even though rents are strong. This Plan 1 condo in Cambridge Court was purchased in May 2005 with 20% down for $550k. They put it back on the market a year later. The status in MLS is ‘Backup’ meaning that a sale is pending but the sellers are accepting backup offers. They originally had listed it at $599k and have reduced it $49k since then. If it sells for $549k, they will have lost about $34,000 (after 6% in selling costs).

UPDATE: I just found this blog post by the OC Realty Group that shows how to make the numbers work in University Town Center: http://www.ocrealestateblog.com/blog/_archives/2006/1/30/1718817.html

UPDATE #2 – May 18, 2007

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17 Georgetown sold on 11/21/2006 for $535,000. Assuming 6% in selling costs, the sellers lost about $47,100 or about 42% of their down payment!

The new buyers purchased the place using 100% financing. Who knows.. Maybe this unit will come back on the market.