patrick.net

Wow, that's an expensive neighborhood at 550+/sq ft!

The investor who bought it at the courthouse steps showed up with $335k in cash. The cash investor took on a lot of risk by buying at the courthouse steps without having a proper inspection done on the home. They had no idea if the foreclosed homedebtor had poured concrete down the toilets, taken all the kitchen cabinets with them, etc.

The investor might have then put up an additional $25-50k of his cold, hard cash to rehab the place to FHA standards at the minimum. The investor provided a service to financed buyers & it appraised properly for the neighborhood, that's why it got bid up from the $429k that the investor listed the place at and then finally sold for $450k.

The "poor schmuck" in return was able to purchase a property financed by a bank, that "poor schmuck" didn't take any of the risk that the investor was rewarded for.

I asked Patrick some about San Bruno and Pacifica. As I understood it, I think he was suggesting that these were areas where prices haven't fallen enough to make for reasonable purchases. I think he would suggest that you can still rent in these areas for less than buying.

That said, it does look like a teeny, tiny, very cute home.