patrick.net

A house came up 4 blocks from my workplace, and it was a nice old house turned into 3 shitty rentals. The wife and I are thinking about buying it and converting it back into a real house. [snip] They’re asking 860k.

I can't seem to find anything matching that description on MLS...

Surfer-X also wants to targetzTM boomers like me who cashed out in the BA and retired in style elsewhere where it's cheap to live.

Neener neener neener! :)

TOS :

Sorry, I didn't miss you. I was also away from the blog.

Do you think that cheap borrowed money has found a new "home", pun intended. Meaning, it s not going any longer to fund RE mortgages, but to the stock market. The 10yr yield is slowly rising as well.

Eburbed :

http://tinyurl.com/26r56k

Robert,

Is this the "Greg Swann" to whom you're referring?

Go ahead, take a walk around the neighborhood:
http://tinyurl.com/35lqcv

I have. I work a few blocks from there. I love that google feature, though. CRAZY!

Ooh Latham!

Maybe you should paint it blue to fit in!

http://www.burbed.com/2007/05/29/mountain-view-surenos-gang-uses-blue/

Hey that doesn't look so bad from the outside...

I have a friend who grew up in MV who walked over to the property and knows the schools, and that part of Latham is out of the gang areas, so I'm okay with it.

eburbed,

There's a reason there are no interior shots. Of the 3 'rental' areas, only one has an actual kitchen. The others are kitchenettes at best. Bring a hot plate. The bathrooms haven't been redone since 1940-50. Same with the one functional kitchen.

segfault,

Yeah, the "Woodheads". Sheesh. She calls a family meeting to announce there'll be no more impulse buying or frivolous shopping trips!

Oh, right. They're going to have to watch their pennies. This from a woman that has burned through half a million dollars and 9 re-fi's in as many years! Lady, your oldest kid probably doesn't even drive yet? To be fair hubby looks "intoxicated" too.

Given they're likely upside down on their "investment" properties and owe 3/4 of a mil. on their primary residence with an overall negative net worth I wouldn't exactly be breaking out the bubbly? Aw... WTF? Let's tie one last good one on for old times sake!

There's something wrong in a universe where a family of eight surviving on one "alternative" radio related salary has four houses including a beach house.

Of course, no sane parent would have bought in Capitol Hill in 1998. Gang violence + DC public schools. I guess that's the sort of parent who would call a family meeting to stop making impulse buys.

I have a friend who grew up in MV who walked over to the property and knows the schools, and that part of Latham is out of the gang areas, so I’m okay with it.

That makes sense. I think it's the part of Latham towards Rengstorff that's not so swell.

So you're really going to offer 50%?

Yep. I'm sure they'll turn me down and get a better offer, but that's what I think it's worth. If somebody else wants to overpay, more power to them. If not, I might get a house at a slightly realistic value.

SFBB,

actually the location of that house is good, on the border of Los Altos. Why is it so cheap? (I am sorry, I generally consider anything under 1M to be cheap at this point, not that I intend to spend 1M on anyone of them).

The lot size is very good for the "fortress", location is good, and judging from the photo, the craftsman can be quite nicely restored. What's the catch?

I am not familiar with MV, but I have been to that part of the neighborhood, and it looks ok with me. As long as it is close to Los Altos border, even if it is not completely gentrified today, give it a bit of time, it will get better.

My wife grew up in the part of Los Altos that borders MV. She commented that MV schools used to be very mediocre when she was going to school, however, they definitely improved a lot and even did better than her alma mater Los Altos High recently.

I honestly don't think MV as the center of the fortress will ever have a 50% fire sale, at least in nominal value. 65-70% nominal value for the bottom is more of a realistic target.

OO :

It's going to cost 300K+ to 'restore' it. Or you have to tear down and start again. The picture they give of it doesn't tell you the whole story. To really do it, it needs to be fully gutted.

Work required :
Kitchen (1), plus 2 kitchenettes have to be removed and turned into something useful.
Bathrooms (3)
Roof
Subfloors (whole building) and there's enough buckling there may need to be some releveling.
Walls (knocking holes through plaster and lathe = new drywall for pretty much everything.)
Exterior - You can't see from the picture, but areas of the outside are rotted and need replacing, all of the shingling needs reworking, and the back of the house is a mess.
Porches - every wood porch is ready to die, and there are many.
Sheds : pulled off the building and replaced after repair of exterior.
Pond : It's a mosquitoe breeding ground and needs to be removed or fitted with actual pumps and filtration.
Pests : It needs a tenting for sure.
Mold removal : No ventilation in the bathrooms for 40+ years.

It'd be an awesome house afterwards, but the sheer amount of work required is boggling. :)

And the price I'm offering them is what I can afford to pay. You've got to factor in having to have cash for the restoration, and paying rent + mortgage for 6 mo. to a year while restoring the building.

I don't think Casey lost the whole 2.2 million. I would be interested to see the final tally, after the procedures of the foreclsures are all applied against the original loans.

Whatever it is, it will be a whole lot of coin.

My guess is, to write a Hollywood script, you need closure. It had to end sooner or later, otherwise, how could Ben Affleck ever play the part this summer? He was all booked up later in the year....

SFBB,

just some data points for the value of land (which is what I am primarily interested in).

1997-1998: a typical lot in the western foothill (rolling, not completely flat, electricity and gas on site, some may require well or septic ) in the school district of Los Gatos, Saratoga, Cupertino, Los Altos, was going for around $550K-750K per lot. The reason why I am using per lot for measurement because all of these lots while varying in size could NOT be subdivided, regardless of the size you can only build ONE home atop. I have seen lots ranging from .66-2.x acres. Roughly $500K per acre. I will call these sub-city lots because they are a bit on the fringe and may need extra site work.

2000: Lots of similar parameters went for about 50% higher.

2005: Essentially 2-4x of 2000 price. I saw some reasonable markups from 2000, there are lots on which the seller will just break even because he put in time and effort to do the site work and pull the permit. There are also greedy sellers who are asking for 4x of what they paid for.

Your lot should be 1/4 acre, but it is a city lot, so I would give it almost 100% premium. If I take the 97/98 price, that will be something like $300K per 1/4 acre. Adding another 50% on top, that will give you 2000 price of $450K (which I am ok with).

Your pricing intuition is quite good :-)

SFBB,

I wish you luck but I'm guessing that you won't get it. That lot is probably a prime teardown target and someone will build a 5,000 sq ft monster on it.

astrid,

I doubt that area will allow 5000sft mansion but I am not familiar with MV codes.

If someone is doing a tear-down, they are most definitely budgeting at least $1M for rebuild @ $300+ per sft construction cost. A $2.xM house in that neighborhood is grossly overbuilding your neighbor. With that kind of budget, you'd be much better off buying straight into Los Altos Hills, or Portola Valley.

Most likely the new buyer will just fix it up.

SFBB,
Nice house - it's really hard to find old houses with character like that in the South Bay.

Sorry to be nitpicky, but technically that house is not a Craftsman home. The particular features of Craftsmen (overhanging eave over a large front porch, low-slung roof lines, square columns in the front, etc. aren't present in your example). It seems to be more like sort-of a California bungalow, with a unique 2nd floor layout.

Good luck on the offer! Keep us updated. I'm also interested in hearing how the probate sale process turns out...

I also hate to be nitpicky skibum but technically if the design did not appear in Gustav Stickley's "Craftsman" magazine then it is not a craftsman. He introduced a very large number of home designs on the pages of that magazine with tremendous variations in architectural influence and style. As a result, to say the house is not a Craftsman with any certainty you'd have to either know who designed it, or go through all of the Craftsman magazines(they were published monthly from 1901 to 1916) and make sure it doesn't appear in them. Craftsman or not it looks like it is in the arts and crafts style and thats good enough for most fans of the genra. The features you described above are very often found on Craftsman homes but are not requirements. I was surprised when I learned this myself. It turns out the Arts and Crafts period and the Craftsman itself encompass a far more varied family of designs than many people realise.

TOS

**Kisses**

$2.4mm's getting dropped to $1.79mm here in primer-than-Marina, Marin. I still like you though. You're my favorite troll.

Perhaps we should have a favorite troll thread. Trolls deserve TLC too. :)

Craftsman or not it looks like it is in the arts and crafts style and thats good enough for most fans of the genra.

David J,

Thanks for the clarification. That is news to me. The homes I associate with the Arts and Crafts movement are not only specific with regards to the architectural style, but also materials. To my layman's eyes, the home in question appears to use materials I wouldn't associate with "Craftsman" homes.

However, I found this site through a cursory search on the web which seems reasonably accurate and seems to agree with what you say:

http://www.ragtime.org/arch/rs/RS_Homes.html

BTW, based on your spelling usage, I wonder, are you an Arts and Crafts fan from the British perspective?

SFBB,

Good luck with that Latham house. I'd be surprised if it doesn't go for at least the asking price. Mountain View is still hot, and there are still too many contractor/flippers looking for places like that around here. They'll just gut it and rebuild it. Permits are easier that way. In 9 months you'll see it on the market for $1.1M.

Probate sale? Wonder if the old lady croaked inside it? That would drop the price a few $k.

SFBB,

Here's the backup for my post above:

http://tinyurl.com/32uhvf

Similar sq.ft., same street, on much smaller lot, closer to the apartment zone.

"BTW, based on your spelling usage, I wonder, are you an Arts and Crafts fan from the British perspective?"

Skibum,

Sorry to dissapoint but I grew up in Eagle Rock, a small community in Los Angeles just west of Pasadena. I learned to appreciate all things Arts and Crafts during a tour of the Gamble house back in the eighties. During the tour it was explained that the architects, Charles and Henry Greene, designed most of the furnishings for the homes they built but that the few items they purchased came from Gustav Stickley. This of course led to an interest in Stickley furniture which led to the discovery of Stickley home designs etc..etc. At any rate I am a fan of the Arts and Crafts style and personaly favor those designs with the elements you mentioned above that so typify the genra in the minds of most people.

OO,

You're right. It really depends on zoning laws and ability to get the zoning board to agree with you. However, I can't see a "prime" lot like that with a 1,800 sq ft home and I bet at the very least, it'll get bumped out in the back by another 1,000 sq ft.

Wierd world we live in where people publicly advertise their stupidity. Casey was the most craven, and though it's no excuse his youth has to explain some of his stupidity.

But why would an educated person volunteer to be featured in their local paper to be the subject of a story about people who refied 8 times and are struggling to get by? And they have kids! Do they really want to read about how their parents are fb'ed in the Washington Post. Dumb.

The Woodhulls in the Post article were who I was referring to, though the guy does look like a bit of jack-ass in this picture.

Or now that I think of it, maybe posing for a newspaper profile in stupidity is their indirect way of letting the kids know that they're on their own for college. Welcome to the world of the fb, son. Now fill out this student loan application.

samac,

In addition (as *astrid points out) the guy works at an "alternative" radio station! Hey, I've had clients that worked at mainstream radio stations and it truly is day to day.

Look, I understand taking risks. Had they decided to purchase (a) 2nd/vacation home no later than say 2002 I could reluctantly approve given their family's finances. At some point though, they drank the kool-aid and became PURE momentum players! This reeks of "my job is of little consequence, it's just a necessary evil to build "my real retirement" in RE!"

Now they're leaning on all this negative synergy and when 'pinching pennies' doesn't cut it they can truly say, "we never saw it coming"!

samac,

While Casey is (was) a lot of fun "I" believe he is dwarfed by Daniel Sadek the former used car salesman turned founder of QuickLoanFunding.com! CS may have been on the hook for a dozen or so properties but these clowns were churning out that many neg. am specuvestor loans an hour!

I have checked with our local video store and they promise they'll have the "Redline" DVD in this weekend!

Sorry to dissapoint but I grew up in Eagle Rock, a small community in Los Angeles just west of Pasadena.

David J,
Are you still in SoCal? I've always thought the housing stock there is SO much nicer than up here in the Bay Area. There's much more stuff built in the early 20th century that's still around and in good shape down there. That goes for Craftsman homes especially. Up here, you're inundated with ranches from the '50s and '60s, McMansion rebuilds, and all that weird clapboard stuff in South City, Daly City and a lot of SF proper.

But of course, SoCal is not as "special" as the Bay Area, now is it??? :)

qulapo,

Well.... agreed. At least where the human drama is concerned. When we look at Daniel Sadek though, he worked on a MUCH larger scale. At one point they had hundreds of employees cranking out hundreds of millions in bad loans A MONTH! He developed a taste for the good life going to Vegas every weekend, driving exotic cars, hangin' with starlets and turning out incredibly bad movies. The things CS's wet dreams are (were) made of.

skibum

Yes, I am still here but I don't believe I'll be able to stay much longer. Home prices are high enough that I am completely shut out of the local market. However the rent in my apartment is only $675 per month and as a result my wife and I are able to save at an alarming rate. The plan is to wait out the market for another couple of years at least and see if things have improved enough to make staying worthwhile. If not, we'll seriously consider leaving California. You are right about the houses down here. Numerous examples of Arts and Crafts style homes can be found on vitually every block in the older neighborhoods. If you are a fan of the American interpretation of the Arts and Crafts vision then this area should be a holy land of sorts. Homes from that era seem to have a different feel to them. I've actually never lived in a home built after 1920 and would prefer not to.

As far as SoCal not being "special", in many circles "special" is short for "special needs" which spawned the phrase "I'd rather be dead than special". So the bottom line is if SoCal is not as "special" as NorCal I'm perfectly ok with that. LOL