In Santa Ana, they rent to illegals for about 1000 to 1200 per room. This house will make about 3k per month (not on paper). The "Investors" will claim a loss and use it as a tax write off.
You also have to add 5% auction fees. So the Ladera house cost 680 plus 34k for a total of 714000. In Ladera the tax rate is about 2% total. So with the 150.00 starting association fees, that is $1283.33 per month just in taxes and association. Again, 1283 per month before you pay your 680k mortgage. These people are financial idiots. I can't wait for the follow follow up story when the house gets foreclosed on.
Royal Dutch Shell says it has shut down production at a Nigerian oil field that produces about 200,000 barrels per day after a militant attack.
A Nigerian militant leader says his group launched a rare attack against one of the company's offshore oil installations, more than 65 miles from land.
The fighters said they weren't able to enter a computer control room that they had hoped to destroy to cripple production.
The militant leader spoke on condition of anonymity to avoid punishment by authorities. The account could not be immediately verified.
crispy&cole writes:
When does GM file for BK?? When does GM get blown out of the Dow? Will the Fe bail out GM? So many questions...if only Seb was around to ease my mind.
A leader of the Movement for the Emancipation of the Niger Delta has told the AP that militants attacked the Bonga oil field more than 65 miles (100 kilometers) from land. But they were not able to enter a computer control room that they had hoped to destroy.
The militant leader spoke on condition of anonymity to avoid punishment by authorities.
Olav Ljosne, a spokesman for Royal Dutch Shell confirmed an attack, but gave no details. He said production had been stopped from the field, which normally produces about 200,000 barrels of crude per day.
Officials for Royal Dutch Shell PLC, which is a main operator in that oil field, had no immediate comment.
The militants also said they kidnapped a foreign worker from a supply vessel ferrying crew and supplies in the area, but there was no immediate confirmation. Hostages are normally released unharmed after a ransom is paid.
Attacks against offshore facilities are exceedingly rare.
Oil industry officials consider their operations on the high seas much safer than those in the creeks and swamps of Nigeria's southern Niger Delta, where most of the attacks during two years of stepped-up violence have taken place.
I was comparing downpayment sizes relative to sale prices on a scatter graph tonight over on my blog tonight if anyone is interested.
I compared September 2006 to April 2008, one had bubble financing the other had post bubble financing to see what changes have come to my local marketplace.
Paid $175,000 cash for an unliveable dump?! Someday, all of these stupidity will be chronicled in some books...
While I share the same sense of disbelief, it is much more likely that the buyers paid $175,000 for a plot of buildable land and got the uninhabitable structure for free.
It is a mistake to attribute the cost of the property to the structure alone. In a large number of northeastern markets, the land makes up the bulk of the purchase price. In my own hometown, a 50x100 plot of buildable land (which is a rare commodity) goes for approximately $300,000. Of course, the when anyone sees a shack for sale for $325,000 they immediately think to themselves "They want $325k for that POS?!?!". What they don't realize is they are only asking $25k for the shack, but you've got to buy the land along with it.
This was NOT a forclosure auction. It was a REO auction of bank owned properties.
This was a RETAIL sale at retail prices from one private party to others. NOT foreclosure prices, yet another realtor fraud trick to screw suspected buyers.
Further, these auctions have "plants" all over the place bidding up home prices.
They only actaully close on a few homes per auction, most are bought back by "investors" - the bank.
as prev poster notes, there is a 5% 'buyers premium' to be added. since house prices for those traded through regular broker are quoted at seller gross (not seller net of broker fee), need to look at selling price as $714k. that is only 11.6% down from oct 07 price and only 28.6% from the feb 06 (peak probably) price does not sound like a huge bargain for a foreclosure, given CaseShiller for LA is off 24.4% from peak through mar 08, and surely less now.
OK, need some help here. We own 2 properties -- 1, home with 50% equity ; 2, beach property that is 50% underwater. We owe $235k. Is there any way I can pull all of my equity out of my home and foreclose on both? Is that the right thing to do? They are in recourse states and we have the assets -- retirement -- so are we doomed?
Thanks CR - I was wondering what was going to come out of those auctions... do you think the second one will 'take' this time or will the bank foolishly kick it back again?
I live in Orange County - looks like they paid current market value.
Maybe they think they can fix it up and sell it for 250k. IMO most ppl buying here are still trying to flip - some of these homes have been forclosed on twice now.
I doubt they could rent it out for more than 1k a month after they clean it up.
These auctions are a joke (for intelligent buyers):
"Buyer's premium" of 5% added to each purchase. Cool if you bring a realtdork with you and they kickback some of their 2% to you. Otherwise - shwiiit - goes right into the auction co's pocket.
Related to this - there will be some realtparasites hanging in the parking lot trying to "hook up" with potential attendees with offers to "share the premium".
3.Sales are not absolute - high bid is merely the right to submit purchase contract at that high bid price. Bank can still counter or reject.
Consequently, unlike trustee sales, buyers have 30 days to close, get financing, etc.
If property currently appraises and buyer can qualify lenders will make new loans. Once again, no forward looking to continued price erosion. Better quality loans, but still walkers once these newbies have negative value?
Auction companies employ cheesy and manipulative tactics, shills, etc. They also inject themselves in RE negotiations btwn buyer and seller, yet do not have a DRE license. A large percentage of them are from Texas and have that annoying red-neck accent. What is it about Texas folks so often undermining laws and procedures? Bush, Enron, et al. I guess laws are for the rest of us, but cowboys don't need no stinkin' laws.
And this just kills me - these properties have all been listed with REO agents for some time before being earmarked for auction (usually the less desirable stock). The agents who have the listings do very little to market the property - they just put on a lockbox, put on MLS, and sit back. Why? Either a buyer's agent will do all the work (and they get their 3%) or the property gets pulled from them, put to auction, and... they still get a 3% commission! Think about that for a moment: you've basically failed to produce results with your listing contract, but you still get paid when the auction sells the property! Rewarded for incompetence - great model. 80% of buyers start their search online, yet many of these REO agents don't even have websites! F$#kin' clowns...
Now you know why there's that 5% premium. BTW - the auction companies are taking a full 6%+ bite out of the transaction. With 2 agents and the auction company, there can be 12%+ transactional friction in these deals. Not too mention all the back taxes, HOA fees, legal, cleaning/maintenance, etc.
REO agents have a nice little monopoly right now cuz they get the deals handed to them by simply being "on the list". It rewards a lot of incompetence and is more akin to govt work then a free market. Current REO disposition has some major flaws.
70% off? For two garage-turned shacks?
Sheesh. Only in california
knife catchers!
gotta love 'the market', take the BS away and it clears pretty quick..
$175k, pack your bags love were of to Cali-forni-a...(to the sound of Beverly hill billies theme tune)
I could afford that on my wage, wOOt!
Not sure if anyone noticed but GM shares are back to their 1975 lows!
Nevermind, they are acutally below the lows of that horrible period. My charts say this is an all time low. 50 year low...Ouch!
In Santa Ana, they rent to illegals for about 1000 to 1200 per room. This house will make about 3k per month (not on paper). The "Investors" will claim a loss and use it as a tax write off.
My uncle is a slum lord landlord in SA. He makes good money off his cracker jack boxes. What a crap hole that area is.
You also have to add 5% auction fees. So the Ladera house cost 680 plus 34k for a total of 714000. In Ladera the tax rate is about 2% total. So with the 150.00 starting association fees, that is $1283.33 per month just in taxes and association. Again, 1283 per month before you pay your 680k mortgage. These people are financial idiots. I can't wait for the follow follow up story when the house gets foreclosed on.
C&C,
Those people don't stay in Santa Ana, they move to all the surrounding cities.
OT -- Shanghai index is down 5.5%.
http://finance.yahoo.com/q?s=%5ESSEC
I have been to one of his homes at night. The amount of noise from the neighbors parties on the weekend is very scary.
Of course, we all realize that 32% off that turd might be at best 2/3 of the eventual discount. Sigh....
When does GM file for BK?? When does GM get blown out of the Dow? Will the Fe bail out GM? So many questions...if only Seb was around to ease my mind.
I think GM will go under before ABK.
Crispy - will the "iron" bail out GM? No, I doubt it.
Seb will try a pump and dump however.
lol. Sorry Fed.
Shanghai now down 6.06%.
Are we back to Gilligan's Island again -- so soon?
Mr. Beach writes:
Shanghai now down 6.06%.
SHG was up 5% yesterday so it's got to move down to 8% to resume it's normal decline.
Oh no:
Oil to rocket:
Royal Dutch Shell says it has shut down production at a Nigerian oil field that produces about 200,000 barrels per day after a militant attack.
A Nigerian militant leader says his group launched a rare attack against one of the company's offshore oil installations, more than 65 miles from land.
The fighters said they weren't able to enter a computer control room that they had hoped to destroy to cripple production.
The militant leader spoke on condition of anonymity to avoid punishment by authorities. The account could not be immediately verified.
crispy&cole writes:
When does GM file for BK?? When does GM get blown out of the Dow? Will the Fe bail out GM? So many questions...if only Seb was around to ease my mind.
When does America file for BK?
1 worth maybe $75,000
2 worth maybe $380,000
The buyers got suckered into overpaying. Must have been the frantic bidding. LOL.
Militants say they failed to cripple Nigerian offshore oil rig
Militants say they failed to cripple Nigerian offshore oil rig
A leader of the Movement for the Emancipation of the Niger Delta has told the AP that militants attacked the Bonga oil field more than 65 miles (100 kilometers) from land. But they were not able to enter a computer control room that they had hoped to destroy.
The militant leader spoke on condition of anonymity to avoid punishment by authorities.
Olav Ljosne, a spokesman for Royal Dutch Shell confirmed an attack, but gave no details. He said production had been stopped from the field, which normally produces about 200,000 barrels of crude per day.
Officials for Royal Dutch Shell PLC, which is a main operator in that oil field, had no immediate comment.
The militants also said they kidnapped a foreign worker from a supply vessel ferrying crew and supplies in the area, but there was no immediate confirmation. Hostages are normally released unharmed after a ransom is paid.
Attacks against offshore facilities are exceedingly rare.
Oil industry officials consider their operations on the high seas much safer than those in the creeks and swamps of Nigeria's southern Niger Delta, where most of the attacks during two years of stepped-up violence have taken place.
Anonymous writes:
Militants say they failed to cripple Nigerian offshore oil rig
So crude will drop.
I was comparing downpayment sizes relative to sale prices on a scatter graph tonight over on my blog tonight if anyone is interested.
I compared September 2006 to April 2008, one had bubble financing the other had post bubble financing to see what changes have come to my local marketplace.
Paid $175,000 cash for an unliveable dump?! Someday, all of these stupidity will be chronicled in some books...
Weren't the 2 investor guys that bought the SA house already living in the basement?
Paid $175,000 cash for an unliveable dump?! Someday, all of these stupidity will be chronicled in some books...
While I share the same sense of disbelief, it is much more likely that the buyers paid $175,000 for a plot of buildable land and got the uninhabitable structure for free.
It is a mistake to attribute the cost of the property to the structure alone. In a large number of northeastern markets, the land makes up the bulk of the purchase price. In my own hometown, a 50x100 plot of buildable land (which is a rare commodity) goes for approximately $300,000. Of course, the when anyone sees a shack for sale for $325,000 they immediately think to themselves "They want $325k for that POS?!?!". What they don't realize is they are only asking $25k for the shack, but you've got to buy the land along with it.
Caveat Emptor
Oh goodie. I have short positions on 12 houses in that neighborhood.
I'm sure that house on Camile is a repaint-and-flip... probably a good, quick $50,000 don't ya think?
OC just ain't that nice. I lived there in the 80's and it's gotten worse in many areas. Better in some as well I suppose.
The article has houses that still sold for absurd prices. I wonder...who's funding these purchases?
I also find it amusing...in the article, many of the buyers are realtors. Gotta wonder just how much Kool-Aide do they drink?
Cheers,
This was NOT a forclosure auction. It was a REO auction of bank owned properties.
This was a RETAIL sale at retail prices from one private party to others. NOT foreclosure prices, yet another realtor fraud trick to screw suspected buyers.
Further, these auctions have "plants" all over the place bidding up home prices.
They only actaully close on a few homes per auction, most are bought back by "investors" - the bank.
as prev poster notes, there is a 5% 'buyers premium' to be added. since house prices for those traded through regular broker are quoted at seller gross (not seller net of broker fee), need to look at selling price as $714k. that is only 11.6% down from oct 07 price and only 28.6% from the feb 06 (peak probably) price does not sound like a huge bargain for a foreclosure, given CaseShiller for LA is off 24.4% from peak through mar 08, and surely less now.
Dont you have to believe that the lot that the crack house is sitting on is worth at least 50000 dollars along with the foundation for a real house.
Dali-inspired?
I was thinking Fukijama-inspired, Satanas-rendered.
OK, need some help here. We own 2 properties -- 1, home with 50% equity ; 2, beach property that is 50% underwater. We owe $235k. Is there any way I can pull all of my equity out of my home and foreclose on both? Is that the right thing to do? They are in recourse states and we have the assets -- retirement -- so are we doomed?
Thanks CR - I was wondering what was going to come out of those auctions... do you think the second one will 'take' this time or will the bank foolishly kick it back again?
I live in Orange County - looks like they paid current market value.
Maybe they think they can fix it up and sell it for 250k. IMO most ppl buying here are still trying to flip - some of these homes have been forclosed on twice now.
I doubt they could rent it out for more than 1k a month after they clean it up.
Thanks for the AMAZING follow up. Your blog is just the best run financial site I use (OK-one of the best, but still awesome).
Warp 9:
The "crack house" is across the street from a school. Look it up on Google maps.
1) maybe they're going to put it back to use as a crack house. They paid cash.
2) It isn't worth pulling it down to rebuild. At least, not at this time.
How do you fit 3br and 2 ba into 894 sq ft? Did they put a door on the living room to call it a br?
These auctions are a joke (for intelligent buyers):
3.Sales are not absolute - high bid is merely the right to submit purchase contract at that high bid price. Bank can still counter or reject.
REO agents have a nice little monopoly right now cuz they get the deals handed to them by simply being "on the list". It rewards a lot of incompetence and is more akin to govt work then a free market. Current REO disposition has some major flaws.