I’ve got a few quick items, an introduction to a new and interesting player in the TD/REO game, and then just want to open this post up for your weekend rants and raves. The comment count has really been down lately, and I want to make sure that my ramblings on the blog are relevant to your interests – I can change, I swear! So shoot away. What’s on your mind and what to you need know?
– Citibank hit me with a surprise this week. The amount due on my HELOC was about half of what I had expected. On closer examination of the bill, it looks like they cut the month off early and have extended the "grace" period by 2 weeks. Is this another desperate attempt to keep loans looking current? How widespread is this?
– I haven’t bashed the RE profession lately, so here goes. Any guesses which agency has over 25% of their agents/brokers listed on the RSAR roster with NODs or worse? It seems that the only qualification required to become a "short sale expert" is to be there yourself. I guess that going through the process would be a form of networking that could be claimed as experience.
OK, Wood is Good LLC. OOH, the photos I considered for the lead on this post, but chickened out. Their MO seems to buy very low end TDs/REOs, clean them out, dress them up, repaint with barrels of ecru with white trim, and list ’em low. I am trying to figure out if this approach is a valid business model. They are definitely going downscale from our friends at Page Ventures. Here is their activity so far:
– 1245 Dodson, purchase for $62,000 6/8/09. Sold for $108,000 7/31/09. Last sale was for $258K in 8/05.
– 620 E 7th Street, purchased for $68,000 as an REO. Last sale $243,00 on 8/05. 3 units, not listed yet.
– 1283 Left Hand Canyon, purchased for $37,100 as a TD on 6/24/09. Listed for (reduced) $99,400. Previous sale was for $60K in 6/02. This is 288 acres of vacant land.
– 630 Morrill, purchased for $40,500 from BofA as an REO 7/9/09. Listed for $134,900. Previous sale $283K in 11/06. Two houses on one lot in the "hot" zone.
– 1520 Mill, purchased for $62,000 on 7/17/09 as an REO. Previous sale of $190,000 in 11/05. Not listed yet.
– 1881 Merchant, purchased for $52,000 as a TD 7/21/09. Previous sale of $72,900 in 1992. Listed at $97,500. Sparks Duet.
– 1493 Catalina #2, purchased for $29,750 as a TD 8/12/09. Previous sales of $155.000 in 7/06 and $91,000 in 6/04. condo. Not listed yet.
– 1693 Gault, purchased for $31,100 as a TD on 8/18/09. Previous sale of $162,500 in 12/04. Listed at $51,900. 1680 Gault was purchased for $35,000 as an REO, and is currently listed at $112,000.
It is a fascinating strategy from Wood is Good. No offense to anyone, but these are crap properties in even more crappy locations, and the purchase prices reflect that. The banks bought into the undesirability of the properties and sold at heroically low prices. Is there value and profit to be had in the dregs of the market?
Catherine
I saw 630 Morrill when it was first foreclosed on and it was AWFUL. Truly awful. The bathrooms had mold spots all over the ceiling, as did some of the bedrooms and the kitchen in one of the houses. Grafiti on the walls, a boarded up “wall” where there was probably once a sliding glass door, and too much other stuff to name. My guess is that they probably sold it in the same condition as well.
naysayernot
Sorry that I mainly lurk and rarely comment. I want you to feel the love! So here’s my two cents…it is interesting that all those D*****n Realtors took part in the drinking of the kool-aid at their sales meetings and are now upside down themselves…
Al in IC
Anyone have any ideas about what will happen with the incoming prime borrower defaults in the next few months? These junk properties may sell to the 8% tax credit buyer or investor, but the prime properties will not IMHO. Are there enough “employed” buyers with cash to absorb the new inventory?
Reno Ignoramus
On the first Sunday of 2006, a certain large real estate office here in Reno ran a full page ad in the RGJ stating quite explicitly that there was no housing bubble in Reno. It said that Reno was immune from a bubble. It said that Reno was different, and demand for houses would continue into the foreseeable future. It said that its own “economists’ predicted appreciation of houses in Reno of between 7-10%. Just in 2006.
I am not going to name any names, but I am personally acquainted with 5 realtors from just this company, including one of the owners, who are in foreclosure on their primary residence. The number of investment houses they have already lost is more than a dozen. From just 5 people.
One thing can be said: at least the realtors drank their own Kool-Aid. They didn’t just spew it out to the public while personally abstaining.
Sully
Mike, in answer to your question – would this be the same agency that was not going to take anymore listings under 300K around 2005?
Reno Ignoramus
Sully, I believe it the same agency whose President told me in the summer of 2005 that the days of the $300K house in Reno were gone forever. This person told me that except for some ugly fixers with the cupboards hanging off the brackets and cracked windows, there was nothing in Reno for under $300K, and there never again would be. If one wanted decent “entry level” housing for under $300K, one would have to go to Fernley, so said this person.
This same person happened to be one of the “economists” that flatly declared Reno was immune to a housing bubble, and that prices would rise into the sunset.
Martin
Remember when Coach Fox’s house at 4241 Dant hit the market at $779K about 4 months ago? Now its down to $670K. It is still overpriced, IMHO, so let’s see what it’s going for in December.
john R
Another BORING post by mike..
mike you suck!
SouthBay
Another lurker who enjoys the read!
Keep up the Good work Mike – Always interesting!
FutureRenoHomebuyer
Keep up the great work Mike. Really appreciate the your data mining. Provides perspective on the market that you won’t find in big media.
RRB Fan
Absolutely … Mike please keep up the good work. I certainly appreciate your sleuthing and providing a perspective that is different from the mainstream press.