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59 Sparrowhawk Irvine, CA 92604

By Goran_K (4/4 = 100% civil)   2012 Nov 13, 1:12pm   ↑ like (1)   ↓ dislike   1 link   2,626 views   10 comments   watch (0)   share   quote  

This house is listed at $524,900, REO.

What attracted me to it was that it was a single story home, nearly 2,200sqft in a desirable area (Yale Loop in Irvine).

Walking up to the front door, it was obvious this home had some "deferred maintenance". The garage door had wood trim pieces literally hanging on by a single nail, there were two pieces of wood on the driveway. The grass was dead, and the windows looked like they needed to be sealed. Not a great first impression.

Walking into what might have been the living room, I was caught off guard. The house had no floors. Literally concrete, and exposed nails sticking out where the baseboards should have been. The kitchen was missing most of the cabinets as well. Looking around, I noticed all sorts of cracks running across the floor, and up the walls to the ceiling. This home looked like it had major foundation issues.

I asked the agent about it, and he responded with, "Some work has been done with the foundation, the bank has fixed it." Yeah......

The backyard was a decent size, especially for Irvine, but backing to Culver Street, there was definite street noise. Livable for some, maybe not for most. The grass was also dead. The roof from the back looked to be in okay shape, but probably would need replacing in 5 years or so. At least it wasn't wood shake.

Overall, not a very impressive tour. It's certainly priced right, but I would estimate at LEAST $60,000 to $80,000 worth of work to get the home into condition to make it actually livable for a family. Could be worth it for someone with lots of cash on hand.

#housing

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1   E-man   2012 Nov 13, 4:20pm  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

What's the FMV after you remodeled the house?

2   Goran_K (4/4 = 100% civil)   2012 Nov 13, 11:16pm  ↑ like (1)   ↓ dislike   quote   top   bottom   home   share  

Based on comps, if this home were fully remodeled, it might sell in the $640k to $660k range. It does back to Culver, but it's also 2,200 sqft on a single story plan (very hard to get in Irvine).

So based on the $524,900 list price + $80,000 out of pocket expenses to remodel, it looks like a good deal.

BUT....

The cracks from the floor, going all the way to the ceiling are worrisome. Foundation issues always give me pause. The bank said they fixed it, but who knows? Will this home even get traditional financing? I'd love to see the inspection report on this house if someone does try to buy it. I have a feeling that there is some costly repairs I may be missing from my cursory tour last weekend.

3   Goran_K (4/4 = 100% civil)   2012 Nov 14, 8:40am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

Well, I guess I know why this house is priced so cheap. About 400-500sqft was part of a poorly done addition on the right side of the house. The foundation is sinking at one end, and rising at the other, causing major cracks throughout the area (I noticed this myself while touring).

With that new knowledge, I'm guessing this house is priced way high, because the cost of repair might tack on another $50,000 to $80,000 alone, cash out of pocket. Who knows what else might be wrong.

4   Goran_K (4/4 = 100% civil)   2012 Nov 14, 8:49am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

E-man says

Goran,

This is a dream property for investors/flippers. You have to pay all cash. The house needs a lot of work and has foundation issue. I see the potential for a lot of profit here. Don't be surprised that someone will buy it for $400k-$450k all cash. When it hit the market again in the next several months, it will be priced at $699k. That's my take based on what you have described above.

Yeah I have no doubt that someone will buy it all cash, and do the remodel work and fix the foundation. If they buy it for $450,000, and have to do $150,000 of repairs, I could see it going back on the market at $700k. This is definitely a flipper special IMO.

5   Goran_K (4/4 = 100% civil)   2012 Nov 14, 9:20am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

I think you should do it E-man. :)

6   Goran_K (4/4 = 100% civil)   2012 Nov 14, 11:26am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

I'm a simple guy. In terms of real estate, if I were to become an investor, I might look at multi-unit. Flipping SFHs isn't for me.

7   Goran_K (4/4 = 100% civil)   2012 Nov 14, 11:43am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

Yeah, I don't think so either. Hence.

8   zzyzzx (40/40 = 100% civil)   2012 Dec 13, 12:50pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

Goran_K says

Well, I guess I know why this house is priced so cheap. About 400-500sqft was part of a poorly done addition on the right side of the house. The foundation is sinking at one end, and rising at the other, causing major cracks throughout the area (I noticed this myself while touring)

How much would it cost to undo the add-on?

9   Goran_K (4/4 = 100% civil)   2012 Dec 13, 1:08pm  ↑ like   ↓ dislike   quote   top   bottom   home   share  

I'm not sure. It would have to be sizable.

It sold for $555,000. I'm actually surprised. That had to be all-cash, or pretty close to it.

10   Goran_K (4/4 = 100% civil)   2012 Dec 18, 9:45am  ↑ like   ↓ dislike   quote   top   bottom   home   share  

We'll see. That would be one of the highest prices for a home in that neighborhood in the past 5 years, especially one that backs to Culver (pretty much a freeway).

My best is it still goes for under $700,000.

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