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trying to track foreclosures and false reporting of sold prices
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2012 Aug 7, 11:57am 974 views 2 comments
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Of course you might be right, but I doubt there's anything fishy going on here - you can see there's even a buyers agent from a different brokerage involved:
http://www.redfin.com/CA/Alamo/2324-Roundhill-Dr-94507/home/1275666#!disp_mode=M&lat=41.00335210021001&long=-128.94216305403847&market=sanfrancisco&sf=1,2&v=8&zoomLevel=7
And there are plenty of people out there who consider a 3-4% return a good investment... Beats many other investments these days. If I had a few million and was trying to plan out my retirement, I'd probably consider something similar. Even when engaging a management company and factoring in all other costs you should get upwards of 3% out of that. Is that the best return for a rental? Probably not, but the risks are fairly low - and if you live in the same street as your investment property then it's probably easier to manage than buying a few shithole properties far away in Stockton...
Purchase Price: $1,055,000
Annual Rental Income: $58,800
That is assuming they get their asking price AND have year round occupancy which is unlikely.
Annual Property Tax: $11,605
Alamo property tax is 1.094% plus special assessments, call it 1.1%.
Property Management Fees: $5,880
commonly 10%
Homeowner’s Insurance: $1,000
guessing here, should be close
Net Annual Return $: $40,315.00
Net Annual Percentage Return: 3.82%
The above does not take into account any upkeep. Replace the roof and your return for that year is down to 1.5%.
Additional depreciation in the high end market and they’re losing capital.
And while someone might accept 3 or 4% as a decent return today, locking into that number for the long term doesn’t seem like a great move.
And while rentals are hot right now, if rental prices diminish, so does that 3 - 4%.
Seems pretty thin as illiquid investment opportunities go. If they sell, upgrades and realtor fees hit them.
I don’t think anything is going on other than banks holding properties to prevent losses and keep liabilities in the asset column. I don’t think that is a secret.
Biff
This house shows as sold on July 11th, 2012 for $1,055,000:
http://www.trulia.com/homes/California/Alamo/sold/3013066-2324-Roundhill-Dr-Alamo-CA-94507
And it is currently for rent less than one month later at $4,900 per month as seen here:
http://sfbay.craigslist.org/eby/apa/3177071020.html
I think this has got to be a bank repossesion. I can't imagine someone laying out a million to get back $4,900 per month before property taxes, insurance, upkeep, property management fees, etc.
So if a bank "buys" a property from itself, does this skew sold prices and the core logic, realtytrac and zillow price reports?
And what effect does this have on the bank's balance sheet? Does this mean they don't have to account for the property as a liability?
I'm pretty sure it supports the theory that banks are reluctant to foreclose and/or put high end homes on the market.
Biff
#housing