Secret Morse Code Message in San Carlos
Who doesn’t love flips? Buy a house for cheap, fix it up for cheap, sell it quick for way more money. Let’s take a look at a flip courtesy of Burbed reader NorthernAutumn. Thanks very much for sending in this guest post. And see all those dots in the listing copy? That has got to be a secret message that says: Start your overbidding!
Please welcome NorthernAutumn to the front page as today’s Guest Blogger!
1223 ALAMEDA
San Carlos, CA 94070
$679,000
BEDS: 2
BATHS: 1
SQ. FT.: 890
$/SQ. FT.: $763
LOT SIZE: 6,500 Sq. Ft.
PROPERTY TYPE: Detached Single Family
STYLE: Contemporary
STORIES: 1
VIEW: Neighborhood
YEAR BUILT: 1948
COMMUNITY: El Sereno Corte
COUNTY: San Mateo
MLS#: 81221878
SOURCE: MLSListings
STATUS: Active
ON REDFIN: 22 daysComplete interior remodel, new maple kitchen cabinents with granite counters. Remodeled bath. .. .New hardwood floor and new berber carpeting. .. .New Roof, all new windows and landscaping. .. extra large lot. .. property is set back from street. Open house Sunday July 1.. .. from 1-4
I pass by this house frequently.
It was always interesting – it lacked a fenced front yard, it sits on small weirdly-shaped lot with lots of shade along Alameda (and only about half a block from the fire station).
It was one of those houses that you could look at and think ‘hey, mine’s not THAT bad’.
Then it got put up for sale earlier this year and (surprisingly, to me at least) sold relatively quickly.
I saw the new owners were doing some work but instead of living in the house - a new ‘for sale’ sign appeared and I thought ‘ok, so someone is flipping it’.
I decided to check out what they wanted for the house.
They are asking for $679K which is $179K more than what they bought it for.
Did the remodel really cost that much? I assume the investor wants a 50% return on their investment so that would give an estimate of $90K in remodelling costs? Too high? Too low?
Would Burbed readers pay this for the house? I mean, you get good San Carlos schools, easy access to a few churches, the fire station nearby and walking distance to the annual ’CandyCane Lane/Xmas lights extravaganza’ held on nearby Birch lane….but is that worth $679K?
It’s not quite the cheapest house in San Carlos but it’s almost (I found a 1/1 listed on redfin for $610K but it’s further away from downtown and the Xmas lights extravaganza (and I can’t testify to the availability of churches, fire stations and other amenities)….
July 3rd, 2012 at 8:15 am
“Jul 26, 2005 Sold (Public Records) $750,000″
$680k is $70k less than the 2005 selling price, and that’s before the new light bulbs and Drano.
July 3rd, 2012 at 8:52 am
Too bad they did not go all the way and did not get rid of that wall furnace. Other than that, it looks like the flipper did a good job.
July 3rd, 2012 at 9:04 am
Here’s the “before” picture of the outside:
The listing history is pretty intriguing as well. There’s a 1992 sale, too bad it isn’t paired with one from 1988.
It’s hard to tell how good the improvements are unless you tour the house, walk on the hardwood, check out the quality of the appliances, etc. But it did photograph reasonably well. We’ve seen much worse real estate photography in homes selling for three times as much.
Oh yeah: Virtual tour! Four extra pictures but bigger and with classical music!
July 3rd, 2012 at 10:26 am
Wrong. The flipper did a bad job. He improved the cosmetics of the house without making it any bigger. The house is as uninhabitable as before, and it costs more. With a size challenged and decrepit structure like this, the best thing one can do is to raze it and build new. The flipper has now made it that much harder to rebuild, because all the money and effort put into the remodeling would be wasted.
July 3rd, 2012 at 10:27 am
Good news! Rental income is rising for landlords:
http://finance.yahoo.com/news/rents-keep-rising-while-home-141400297.html
July 3rd, 2012 at 10:32 am
Wrong. The flipper did a bad job. He improved the cosmetics of the house without making it any bigger.
Do flippers add living space? Then they wouldn’t be flippers, because they would be holding onto the property too long to call it a flip.
I understand what you mean, though. I remember touring a medium-sized (1800 sf) Sunnyvale house on a tremendous lot (11,000 sf) and it was very nicely remodeled, but that was actually a negative, because if I wanted to expand the house, it would all have to be redone.
July 3rd, 2012 at 10:39 am
Excerpts:
>>As if record low mortgage rates and beaten down home prices weren’t enough to get prospective home buyers off the fence, there’s another factor that has made the case for buying even stronger: rising rents.
>>”With rents rising faster than prices in most markets, buying is getting even more affordable relative to renting,” said Jed Kolko, Trulia’s chief economist.
What we can say conclusively is that the following 2 types of people have made a strategic mistake:
1. Savers – People [...] who advocated saving to earn sub 1% interest, rather than using the low mortgage rate to their advantage. [...]
2. Renters – People [...] who have been rent advocates, without risk awareness that when rent was unbalanced relative to home prices, it was a matter of time before rent catches up.
There have been a lot of debate and fighting on Burbed over the above 2 issues. I think now that the results are in, the people who made strategic financial mistakes will take a long time to recover.
Comments edited because of calling out of third parties. –ed.
July 3rd, 2012 at 10:44 am
>>Do flippers add living space? Then they wouldn’t be flippers, because they would be holding onto the property too long to call it a flip.
I saw one house in Sunnyvale where the flipper added about 300 square feet to a 1000 sf house. Some of that square footage was used to add a second half bath. That made a huge difference, and the house sold quickly even though it was priced above market rate.
July 3rd, 2012 at 10:45 am
My definition of a good flip: About 15-20% profit with a minimum of $100k. If this place sells soon enough and for the listing price, it likely qualifies to be in my “good flip” category.
If, however, consumers are looking for a larger place, then this flip won’t produce the minimums to get it into the good flip category.
July 3rd, 2012 at 10:53 am
Hey! A house the same size as mine ^-^
…The cosmetics are nice, but…
July 3rd, 2012 at 11:18 am
The problem with expanding this house is that it’s still a location fail on a busy street. If you spend money making it larger, good luck recouping it on the flip. Look at the nearby comps. This way, the seller is competing with condos and has an advantage.
July 3rd, 2012 at 11:47 am
#9- That busy street wasn’t too busy in 2005. The difference between “busy” and “too busy” is about seven years.
July 3rd, 2012 at 11:54 am
This house lot has a theme song.
July 3rd, 2012 at 2:12 pm
Wow, how funny – we drove by this house on Saturday on the way to and from the kids’ swim lessons. And I remember clearly looking at the front of this house while we were at a stop sign, and thinking, “Why would somebody put kitchen tile on the front of a house? It doesn’t look good now and will look super dated in about 5 minutes.”
But thanks for the tip about Birch Lane at Xmas!
July 3rd, 2012 at 9:42 pm
I saw one house in Sunnyvale where the flipper added about 300 square feet to a 1000 sf house. Some of that square footage was used to add a second half bath. That made a huge difference, and the house sold quickly even though it was priced above market rate.
But then is it still a flip? Adding living space takes longer than ripping out carpets and appliances, slapping down tile and paint. How long did it take from purchase to next sale? The whole point of a flip is you don’t hold the property for long, so you’re less likely to be caught in a market slowdown. If someone actually rebuilds the house right for the market, that may be good real estate sense but they could end up freshly squozen.
July 3rd, 2012 at 9:49 pm
Good news! Rental income is rising for landlords:
—–
Useless aggregate data.
July 3rd, 2012 at 9:54 pm
I saw one house in Sunnyvale where the flipper added about 300 square feet to a 1000 sf house.
—–
I saw a monkey typing keyboard. That does not make a monkey a human.
I saw an Asian guy living walking distance from Steve Job’s house too. That does not make him a Steve Job.
July 3rd, 2012 at 10:06 pm
“the house sold quickly even though it was priced above market rate.”
Perfectly normal: Everyone always pays above market rate.
July 3rd, 2012 at 10:07 pm
I don’t see how a second half bath adds much value. A full bath, yes.
July 3rd, 2012 at 10:11 pm
>>But then is it still a flip? Adding living space takes longer than ripping out carpets and appliances, slapping down tile and paint. How long did it take from purchase to next sale?
Definitely less than a year. Here’s the catch: The garage was converted to living space.
July 3rd, 2012 at 10:12 pm
“What we can say conclusively is that the following 2 types of people have made a strategic mistake:” 1. Savers, 2. Renters
When you don’t live in the RBA, your best bet is to save by renting. Sure we can say conclusively that the best deal is to buy in the RBA, but did anyone ever question that fact?
Taking today’s featured property as an example, it last sold for $500k, yet it was purchased in 2005 for $750k. That’s a $250k loss over roughly 7 years. $250k = $3,000 per month for 84 months [=7 years].
I say it’s best to save that $3,000 per month!
July 3rd, 2012 at 10:13 pm
>>I don’t see how a second half bath adds much value.
Do you have a wife and kids?
July 3rd, 2012 at 10:16 pm
>>Taking today’s featured property as an example
No one claims that there is a fault-proof way to make money. There’s always the exception to the rule, and there is always a risk to everything. When you take an airplane ride, you may fall from the sky. The play-it-safe way is actually not safe at all. These are exactly the people who are priced out forever.
July 3rd, 2012 at 10:18 pm
I don’t see how a second half bath adds much value.
—-
Bath is not important for some people. Half bath definitely adds value for those people.
July 3rd, 2012 at 10:19 pm
Pralay says,
>>Useless aggregate data
Useless? It should actually be pretty useful to you.
July 3rd, 2012 at 10:22 pm
>>When you don’t live in the RBA, your best bet is to save by renting.
Did you not get the message? Your WORST bet is to save and rent. You cannot afford to lose a bet like this.
July 3rd, 2012 at 10:31 pm
Pralay,
Your posts seem to be getting more bitter by the day. You are making your losses way too obvious. Maybe you can still buy into Santa Clara, the place you are already living in. As we speak, Santa Clara is a popular market these days and getting snapped up quickly. Better late than never!
July 3rd, 2012 at 10:34 pm
Taking today’s featured property as an example, it last sold for $500k, yet it was purchased in 2005 for $750k. That’s a $250k loss over roughly 7 years. $250k = $3,000 per month for 84 months [=7 years].
—–
“I think now that the results are in, the people who made strategic financial
mistakesdecisions will take a longtime to recovervacation at Greek island of Santorini and from there they are going to argue on Burbed how good their decision was.”July 4th, 2012 at 12:45 am
Your posts seem to be getting more bitter by the day.
—-
Burbed would be quite an awkward blog (or place) to sound bitter.
It is also quite an awkward place to be “helper”.
July 4th, 2012 at 9:23 am
“No one claims that there is a fault-proof way to make money.”
RBA property always goes up in value!
July 4th, 2012 at 10:27 am
SEA,
Did you miss the whole discussion on railroad tracks, power lines, high traffic streets, and freeways etc.?
July 5th, 2012 at 11:41 am
The best thing I ever did was move out of the RBA, and California altogether. I bought a house I could afford that wasn’t a shoebox with Pergo.
August 1st, 2012 at 10:10 am
The internet has made flipping much more difficult. Now anyone can quickly see that the flipper recently paid $500k for the property. People can’t get suckered as easily as when the realtors held all the info.