WatchLots of conspiracy talk about the "bulk buyers" getting all the good deals from the foreclosures etc...
Ok, here is a bulk buyer deal i finally found:
Sold 9 condos for $135,000 on 9/29/10 That's $15,000 a unit.
In fact, these same 9 condos sold for $903,000 in 10/19/06,
85% off peak prices to a bulk buyer, proof of the conspiracy!!!
Well, not so much as we are about to see. The recent purchaser has painted, fixed up, re carpeted them all to flip them, and has them all currently on the market at $25,000 each. Only problem, is that is still WAY over priced. take $10K in profit, subtract a couple thousand for the fix up, subtract another $1500 or so for buyer side commissions and closing costs, and you have a thin margin of maybe $5K profit for each.
BUT these beauties come with an HOA of $325 a month, plus taxes of $27 a month. In an area with similar rentals at $550 a month... Thanks but no thanks, as an investor I would barely take these things for free... So far ALL of them just sit on the market, and there is precisely zero chance of a buyer getting a mortgage to buy them. What owner occupant buyer A. has $25K, and B. wants to buy these to live in??? With $25K in phoenix and ANY credit at all, you could buy a hell of a house to live in!
With carrying costs of nearly $400 a month, it is just a hop and a skip to total loss for this want to be fliptard. E-man, did you invest yet? pkennedy? Boy have I got a deal for you!!!!
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Yeah, reminds me of something I read a while back. I don’t remember if it was a post or article, but the writer’s theory was that a lot of condos (after HOA, and other expenses) were worth $0.
…or perhaps even less.
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These, in my opinion, are literally worth
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Around here $350/month condo fee would be considered low. Not that I would find it acceptable.
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Los Angeles, CA
He should probably sell the whole thing to a CA investor who has dreams of 'owning apartment buildings'. Probably thats his plan?
Thanks for another update Roberto, you are one of the few here who is actually experienced with Real Estate. There are not that many true stories of on the ground actual reports here. Mostly just complaining and snark(which is fun but not useful for investing...)
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Awwwwwwwwwww, poor robertoaribas. He has to make fun of me and pkennedy to make himself feel better again. When I have a little more time, I will get back to this post and present what's wrong with his example above.
Happy investing!!!!!!
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Oakland, CA
sounds like bulk buyer is about to become bulk landlord.
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I've seen some houses being built now that have the ghosts of the former HOAs still in place, absolutely crazy HOA fees for, well, not much.
Roberto, you seem to follow the condo market in Phoenix. Curious what you think about these: MLS 4480162 and the 7 others just like it. On the market for awhile. Look very nice inside, against South Mountain but real estate to the north is very dodgy, if you know what I mean. Look at those prices!
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lotr1978:
a quarter of a million at central and baseline??? Hello! 2006 just called! they want their housing prices back!
Yes they are very beautiful, but to give a reference, I put offers at $50k on 2004 homes 3br 2 bath 2 car garage, just a few miles from there...
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Yeah, SF A$$ and E-tard, come back and tell me what is wrong with my math!
SF A$$, "that is a 33% return on investment" NOPE! that is a 33% dream, as you will notice that NONE of them are selling. Hold them for 3 more months, cut the price a couple $K and you are already at 0% return on the flip...
"there are plenty of people with $25K who can come there and buy them" Sure, only thing is, people with $25K can come buy a nice single family home with 1. a garage, 2. a yard, 3. a reasonable school district, 4. a neighborhood you can walk around at night without taking a pair of pitbulls with you. 5. 3 bedrooms not 2 6. 2 baths not 1... etc. etc. etc. Such a home can be found for $70K... So, anybody with $25K is unlikely to buy crap with it, rather than get a mortgage and payment less than the aforementioned HOA...
I see I have approached my real estate blogging all wrong... I should have pimped crappy deals to stupid people with money, I would make so much more in commissions!!!
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Keep up the great posts robertoaribas. We all know the difference between the A-holes and the merely frustrated on this site. I may be both. I think I hide one side when posting.
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Roberto,
Finally, I have some free time to get back to this post. Let's say what you're saying above is true. I bet you this guy is likely an out-of-state investor that got taken advantage of by a local RE agent such as yourself. Only out-of-state investors do not fully understand the economics and demographics of the area & got stuck with a piece of property that (s)he couldn't get rid of.
If you’re considering investing out-of-state, I suggest you read this post before you part your hard-earned money with a trustworthy RE agent such as Roberto or property manager such as his friend.
Here we go. There are so many ways that property managers, RE agents, tenants, handymen can take advantage of an out-of-state landlord that it's hard to know where to begin the list. What traps a lot of investors into out-of-state investments is the sales pitch, which basically plays on their ego, tells them how much smarter they are than other investors to invest in THIS area. RE agents in these markets have refined it into a science by attracting out-of-state investors. Out-of-state investors generally OVERPAY for properties, repairs, property management, etc.
If the broker/RE agent, who is selling you the property is also the manager, is also the leasing agent, also supplies the handymen who work on the property, then they are simply paying themselves, right? As the selling agent, (s)he chooses title, the home warranty company, the mortgage broker, the escrow, the title company, the natural hazard disclosure company, the tenant(s). So what is their incentive to lowball any of these functions? The truth is that most property managers/agents can build so many profit centers into the deal, that effectively siphons off any potential profits long before the out-of-state investor would see any money at all.
If your broker is not your property manager (PM), I have another surprise for you. Whatever profit slips through the fingers of the tenants is going to stick in the pockets of the greedy PM, who is going to collect the rents. Once the money is in the hands of the PM, (s)he can usually figure out a way of siphoning off any potential profits. The PM is also going to hire his relatives to act as handymen, leasing agents, maintenance men, which is all part of a full employment plan for his list of relatives. This typically ends up being a full employment plan for the PM's relatives.
Some investors think that if their PM is dishonest with them, they can sue. Another bad idea. Why? So the local lawyer can line his pockets with your money too? The expenses will mount faster than you could ever imagine. And what's your alternative? Handle it yourself from 3,000 miles away?
Oh, and I’m not done yet. If everytime you visit the property, you are forced to spend $1k to $2k per visit on travel. Basically, it means you are not going to be showing up very often, and this makes the PM exceedingly happy.
Most out of state investors ultimately end up giving up, selling their properties for serious losses and moving on. Out-of-state investing should be considered the most advanced and difficult class of investment and should only be attempted after you have had success with local investments.
I could go on and on, but you get the picture. I consider myself very fortunate for having been coached by individuals that went down this wrong path. Of course, if you don't mind lining out-of-state RE agent's pockets, such as Roberto and his PM friend, feel free to part your money with them. For me, no thanks.
I would like to conclude this post by saying: REAL ESTATE IS LOCAL :)
Happy Investing & Landlording!!!
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SF ace says
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sf ASS:
Returning tho this thread again, NOT ONE HAS SOLD TILL TODAY. six weeks later, $450 in HOA charges, plus accruing taxes... on each one... Yep, great flip! Oh, I'm feeling so wrong on my initial post!
Here are the mls numbers you twits, since you claimed I'm lying: 4495163, 4531657, 4531666,4531661,4531682,4531677,4531646,4531671
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wow e-man's post is spot on re out of state investing.
I luckily dodged that bullet but I know plenty of people who fell for that trap.
Californians especially vulnerable because it seems like
you can get so much more for your money out of state.
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robertoaribas says
Yep. If you want to invest out-of-state or in Phoenix area, give your money to Rob_Ars. He & his property manager friend will take reeeeeeeally good care of your money. Your ROI will be through the roof. Rob_Ars knows it all. Don't believe me? Give him your money and watch your ROI. After all, you have to give him & his PM buddy your hard earned money to find out, right? :)
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Mr.Fantastic says
Uh huh!!! You have to move out of your parents' basement to find out that they have been right. LOL :)
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E-man, i don't do property management ever, except for my own properties.
Anyone with any intelligence can see that I am not looking for business on these posts... but keep slinging insults my way, probably easier for you then arguing with facts...
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Uh huh, personal insults. How does it feel to be on the other side of the stick? I'll let the readers be the judge :)
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Roberto takes a sales price, and then randomly picks numbers to make the investment bad by making up what was done, how much it cost, and what the guy expected on his return.
SFace shows they're wrong.
Roberto changes the numbers to ensure the investment turns bad. Then says he's right this time, because now the numbers truly are bad.
Roberto has no information about the buyer, what the buyer wanted to get out of it, or whether this buyer was taken advantage of. He assumes the guy knew what he was doing, then he assumes the guy over paid, and then he assumes the guy lost money based on all his assumptions. Finishing up with assuming everyone doing this is losing money but him.
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Mr.Fantastic says
Do you think anyone here still doesn't know you live with your parents in Irvine?
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pkennedy says
Only a true lowclass POS calls someone a LIAR without knowing a fact.
HERE is the deed when they bought the units :
http://156.42.40.50/UnOfficialDocs/pdf/20101019311.pdf
Here is the exerpt from the maricopa tax page: SALES INFORMATION
Deed Type Sale Date Price Down Mtg Amt Financing Document #
QUIT CLAIM DEED 11/22/10 $0 $0 $0 101019311
Buyer: HAMMOND MCCORMISH LLC Seller: MARCIE K & MICHAEL W MCCORMISH Mtg Company: NO NEW MORTGAGE
WARRANTY DEED 9/29/10 $135,000 $135,000 $0 100847615
Buyer: MARCIE K HAMMOND; MICHAEL W MCCORMISH Seller: C A INVESTMENTS Mtg Company: NO NEW MORTGAGE
SPECIAL WARRANTY DEED 10/19/06 $903,750 $45,000 $355,000 Conv 061384207
Buyer: C A INVESTMENTS Seller: NEW CASA BLANCA VILLAS LLC Mtg Company: MARINE BANK
Lets see: $135000 / 9 units... oh yeah $15k a unit...
on the mls for $25K with "new kitchen cabines, new flooring, new counters etc..." and paying a 3% cobroke, plus whatever other closing costs come up. Going on 2 months, not 1 sold, HOA is listed as I stated above, $305 a month. Do your own math.
I have really never in my life run into people like you Nomo, E-man ant Pkennedy. Calling someone a liar without a single fact? If even ONE of you had a shred of dignity, instead of being pathetic people, you would now be apologizing.
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robertoaribas says
Awww, Rob_Ars's feeling is hurt. I don't recall anyone calling you a liar, but recall that you called several people on here all kind of names. I'll let the readers by the judge.
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robertoaribas says
I noticed this and just have to point it out. Guess who paid top dollars for this condo complex during the peak? CA Investments. This is the reason you should avoid out-of-state investing if you don't know much about the economics & demographic of the area.
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SF ace says
sf ass:
Lets see: who would know more about how many units are in the complex? An out of state loud mouth, or a local investor agent who has ridden his bicycle around the complex? Hmmm. show of hands, how many think the argumentivive out of state nitwit knows the project better?
Anywats, per the county assessor, it is a 67 unit complex, which would agree with how big it felt being there...http://maricopa.gov/Assessor/ParcelApplication/Default.aspx
So let's examine the rest of your stupidity: "he doesn't have to pay the $305 hoa..." WRONG. He does, or the pool turns green, the parking and common area ligths go off and the landscaping all dies.
In addition, this particular building is on an ancient chiller system for AC. it breaks all the time, I spoke with the maintenance guy while I was there. When it dies completely, look for 100 to 250K for a new one, divided by 67 units as a special assessment...
Sf, lets examine this thread: you have argued with me about the sales price, the hoa, the number of units in the complex. ALL facts I obviously know, as I live here and invest here, and you quite clearly do not know as you are out of state. I'm sort of at a loss, to be honest, as to how you could help but notice how ridiculous you have been on this thread!
TWO out of state bulk buyers have been killed on this property: the $900K buyer for all nine a few years back, and now te $15K per unit flipper is going down... I wouldn't take these for $0.
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robertoaribas says