Do you think you can buy a house that sold new in March 2006 for $627,166 for $236,000? It happened today on 8648 18th Hole Trail in our favorite golf and lifestyle community.
Very few people have the fortitude, luck, or deep pockets to brave the Trustee’s Sales on the courthouse steps. But there a few investors that are active here. Mian Arif, Peter and Lois McAllester, Peter Kendrick, Tina Pettie, Jack Flower, Whipken Properties, Sundial Properties. Sometimes as individuals, sometimes in combinations, they are staring down the banks and picking up properties at unbelievable bargain prices. After a coat of paint, the properties are listed at about 10% under market and moved quickly. The club members bought 2 foreclosures today, and these properties will be interesting to watch:
– 8648 18th Hole Trail was purchased with a $417,000 (conforming) first loan, and a $147,400 second. The amount owing on the first including fees and penalties was $442,000, and the bank let it go for $236,000, cash.
– 2305 Parkway was purchased in November 2005 for $477,500 with a $308,000 first loan, and refied 2 months later with a $347,900 Option ARM. The amount owing at the Trustee’s Sale was $414,000 including fees, penalties and negative amortization. $236,000 must have been the magic number today, it was all the cash that was need to purchase the property.
These folks really know how to make the banks limbo down. I am sure they have many, many deals that don’t work out, but the killer pricing they are getting on the completed deals are stunning. So what’s the upside that makes the risk worthwhile? Here are a couple of their recent completed sales:
– 2721 Sunline was originally purchased in July 2003 for $289,979. It was purchased on the courthouse steps in January for $258,000, and resold in July for $358,000.
– 6380 Stone Valley went for $235,001 at the Trustee’s Sale last December, and sold in July for $295,000.
– 10698 Autumn Leaf was purchased new in April 2006 for $444,569, bought at the Trustee’s Sale for $259,501 in April, and resold in July for $355,350.
– 10115 Burghley (stay away from this street, it is cursed) was purchased new in January 2006 for $776,925, bought at the Sale for $321,751, and resold in August for $470,000. That’s a 40% price drop, and a $150,000 gross profit for a 7 month hold.
Do you know these people? I’ve been quizzing Diane and Guy about them for 6 months, and they are completely under the radar. I admire them – they are market educated, financed and prepared. If they were putting an investment fund together, maybe even BanteringBear would be interested. I know I’d be all in.