I am introducing an new honor at the Irvine Housing Blog: the Knife Catcher Award. This dubious distinction goes out to all the knife-catchers stupid enough to attempt to flip a property in this declining market.
As you can see the knife-catcher is poised to eviscerate any greedy flipper with a death by a thousand cuts: a slow bleed of monthly cashflow and depreciation. To be eligible for the knife catcher award, the property must be put for sale within 6 months of purchase, and it must look like it has little or no chance of success (admittedly, the last hurdle is not very high).
One would think properties put for sale immediately after purchase would be difficult to find. Some may be bank repossessions, but some are simply delusional kool-aid drinkin’ fools who really believe this “softness” in the market is temporary and they are betting on the speedy return of double-digit appreciation. There is a special measure of schadenfreude for these fools worthy of unique honor on this blog. So without further delay, our first knife catcher award goes to…
Asking Price: $567,900
Purchase Price: $505,750
Purchase Date: 2/13/2007
Address: 162 Hayward, Irvine, CA 92602
Beds: 2
Baths: 2
Sq. Ft.*: 1,550
Year Built: 2002
Stories: 2
Type: Condominium
Neighborhood: Northpark
$/Sq. Ft.*: $366
MLS: P570133
Status: Active on market
On Redfin: 20 days
From Redfin: “Beautiful townhome in Northpark with cathedral ceilings. Turn key condition with fireplace in living room. Balcony and windows provide great view of area. Large kitchen. Separate laundry room. Huge two car garage with direct access. Separate formal dining room next to kitchen. Private large master bedroom. Lots of storage throughout. Floor plan is excellent. All the rooms are large. Northpark has many amenities for all ages. Quick access to freeways and shopping.”
This flipper couldn’t even be bothered to replace the tile counters with granite. The unit appears to be empty, so the bleeding has already begun. I have to wonder if this isn’t a realtor or a bank. If this seller pays a full 6% commission, they only stand to make about $28,000. IMO, it doesn’t seem worth the risk. However, if it is an agent paying only half a commission, this could net them $50,000 in just a few months making it at least worth dreaming about.
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Today’s knife catcher award is a double feature as a neighboring property is also a 2007 flip…
Asking Price: $590,000
Purchase Price: $545,000
Purchase Date: 1/31/2007
Address: 259 Lockford, Irvine, CA 92602
Beds: 2
Baths: 2
Sq. Ft.*: 1,496
Year Built: 2002
Stories: 3
Type: Condominium
View: Mountain
Neighborhood: Northpark
$/Sq. Ft.*: $394
MLS: U7001632
Status: Active on market
On Redfin: 7 days
From Redfin, “Auburn at Northpark community. Great end unit location directly across from the pool and park. Dramatic 20 ft. ceilings, and decorator touches. Upgraded sile stone counters in kitchen which is open to a great room, great condition, ceiling fans, windows in 2 car tandem garage. Office area outside master bedroom. Home shows well and has easy access for viewing. Washer, Dryer and Refrigerator included. Wonderful gated community with basketball courts, parks and nature trails. For lease also @$2500”
Another treasure trove of interesting information. My first observation is the price to rent ratio of 218 — assuming this floplord could actually get $2,500 a month. I doubt they will get that much rent as there are many better properties in better neighborhoods for less. My guess is a rent ratio of 250 leaving a $2,180 rent is more realistic. Since this flipper has fantasies, let ’em dream. Also, because it is being offered for lease, this isn’t a bank REO.
Another item I found interesting was the photographs. Notice the 2006/10/31 date? It is possible the buyer took these photos and later used them in the MLS listing, but is is also possible these photos came from the previous listing and the same realtor is involved in both transactions. These photos were taken 3 months before the closing, so it was either a very patient buyer, or these were realtor photos.
So there you have our first knife catcher award. In the future, you will know these special flips by the knife catcher image next to the property breakdown as it was displayed above. If anyone notices when these sell or rent, please email me at irvinerenter@irvinehousingblog.com and I will be sure to update everyone on the carnage.
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BTW, Redfin updated its look last night. Check it out.
The Quail Hill neighborhood of Irvine is located south of the 405 between Sand Canyon Avenue and Highway 133. South of Quail Hill is a nature preserve and the exclusive Shady Canyon. The primary access is from Sand Canyon and through a unique roundabout. The community increases in elevation from the entry point at Sand Canyon and the 405 to the southernmost portion of the site. The hill gets steeper as you go south, and many of the larger homes on top of the hill have spectacular views of Orange County.
