ArrowCreek is still a mystery to me. I just can’t imagine why anyone would want to invest millions there, not to mention actually having to live there. Maybe it’s just me. AC has held up longer than expected, probably due to the long time frame of the development resulting in a good mix of buy dates and mortgage types. The newer and custom properties there are tanking on an unprecedented level. And the losses can run into the millions.
3432 Nambe showed up on my daily search of the Sonic Real Estate site for new listings, but it turns out to be an extended listing. $1,150,000. I looked at it when the original Trustee’s Deed was filed, but the story has gotten more interesting.
The original owners bought the lot in July 2003 for $228,715 with a $205,000 loan from the developer. They took a hard money $150,000 loan to get the design process going in December 2003, then refinanced into a $1,200,000 loan a year later, then did a hard money refinance for $1,650,000 in March 2006. The Notice of Completion was recorded in June 2006, but things were already going bad. The roofer filed a $2060 lien in March 2006, the landscaper filed a lien for $19,769 in November 2006, as did the stone contractor for $5990. The materials supplier followed suit in December for $21,022. The owner took out another $200,000 hard money loan in January 2007.
But it looks like something went horribly wrong about 6 September 2006. That’s when an emergency restoration services was called in. Roof leak? Pipes breaking? Who knows, but the clean up bill was about $30,000. They filed a $22,712 lien, later reduced to $10,721 after receiving a partial payment and reaching a settlement (subsequently released 24 June 2008).
These folks fought. The first NOD was filed on the first $2M loan on 17 July 2007, but they cured it. A second NOD was filed on 28 February 2008 on that loan,and the holder of the second $200,000 loan filed a NOD a day later. A NOS was filed on the 2nd in June 2008, and on the 1st in August. ($2,171,961). Did they make good? I don’t know, but another NOS was filed on the 1st loan on 12 January 2009 ($2,294,949). The bank bought the property back for a cool $1.1M on 24 February 2009. End of story? Not in Mikey’s world.
GMAC, who ended up holding the loan, transferred title to the property on 29 April 2009 for $1,424,114 to an enigma named FCBD 8020 LLC out of Salt Lake City. They turn out to be Green River Capital, a REO specialist, who may have bought this as an investment, or are holding it for the bank. Who knows?
My take-aways:
– GMAC lost over $600,000 on the deal, and they got really lucky to contain their losses there.
– The holder of the 2nd loan lost his entire $200,000, and didn’t even bid at the Trustee’s Sale that went for $1.1M. Smart move, Mr. Paige, though it must of hurt.
– The subcontractors who filed liens were not made whole, though the restoration contractor did better than most after filing a suit.
– Whatever required the services of a "restoration contractor" will not now need to be disclosed by the seller.
– The current seller is out over $300,000 on what looked to them to be a sure thing, if this beast ever sells near asking.
– The pain of tubing is felt over a LONG time, and that has got to mar the psyche.
Running with the big dogs can mean failing with the big dogs. Over a million dollars has been lost by the parties invested on his property.
There are literally hundreds of these custom homes or developer "custom homes" sitting in limbo on the MLS or off market. I think they will see a loss of value that will make Cold Springs look like a cake-walk on a percentage basis. But with the starting prices being 10X Cold Springs et al, the losses will be huge.
Is there a bottom to the ArrowCreek market?
arrowcreek_resident
“I just can’t imagine why anyone would want to invest millions there, not to mention actually having to live there. Maybe it’s just me”
It is just you.
I live here in Arrowcreek. I did a lot of research, toured many areas and decided that Arrowcreek was the only Reno community for me and my family. Arrowcreek has a great city view, Mt. Rose view, workout facility, pools, golf courses, parks, snow removal, and guard gated/patroled.
My research shows that only Summerlin (earthquake central) and Montreux (seems a bit pretentious) have similar amenities.
Say what you like, I would make the same decision today to buy in Arrowcreek!
Worried Guy
I would prefer Fieldcreek or Saddlehorn…without the amnities..yes…but also without the rich HOA fees.
Martin
I assume that arrowcreek resident meant Somersett, and not Summerlin, which is a neighborhood in Las Vegas. Mighty darn impressive research.
Very fine post Mike. I find the time frame most instructive. 6 years from bubble frenzied start to total collapse. I think it is RI who has commented many times on how long it is going to take to wash out all the garbage from the system. This is an example of that. We are nowhere near the bottom in the upper end of the market.
DownButNotOut
‘It is just you’
I don’t think so, AC Resident. It may work for you having all those amenities, but you’re a rare bird, about to become endangered. Write back in six months. Mike’s example of 3432 Nambe is just one of what will be many upcoming scenarios.
I’m sure when the owner of 3432 Nambe was curing his initial default he felt the same way as you do now.
arrowcreek_resident
Yes Martin, Somersett.
Mighty darn impressive cretique of an obvious error.
Hartford
I believe the correct spelling, arrowcreek resident, is critique. Not cretique.
I agree with you Down, but I think Martin’s point is that it will likely take two or three more years, not six months, before it is apparent to arrowcreek resident, and his neighbors, just how huge values will have fallen there. The scenario described by Mike will indeed repeat itself many times in Arrowcreek, but it is going to take much longer than six months.
bob c
the only properties in arrowcreek or sommersett that bear any interest now are the deeply discounted short sales in the 350K area—-(just over 100/sf) on the golf course—-or $300K if not on the actual golf course (3000+ sf homes)
fault lines run all over reno…..just because sommersett got its share doesn’t really mean much of anything—the entire area is at risk
and i wouldn’t be surprised if their recreation areas are transfered to the city or sold or some such and the golf courses become completely public (at least temporarily)
somerrsett has sold only 25% of its memberships and i think arrowcreek golf is in the news today—people can’t afford country clubs for several years
bob c
i’ll bid 600K tops for that home
renonewbie
1.150 for a house that needs counter tops, electrical fixtures, and overall finishing?
Paul
The only problem with your assessment AC resident is that ArrowCreek is sitting in an area that is long overdue for a massive earthquake. It’s much more susceptible than Somersett.
Sully
1.150 for a house that needs counter tops, electrical fixtures, and overall finishing?
What pictures are you looking at? The pictures with the links show everything intact and completely finished.
BBWolf
bob_c nailed it.
To each his own on where he chooses to live and spell.
AC is nice.
homepop
I wouldn’t live anywhere anymore…for any price…in zip code 89511 where you have to listen to the airplanes (especially military airplanes) take off and land incessantly. I am speaking from experience.
Carney
That’s an excellent point homepop. Nobody hardly ever talks about the fact that much of 89511 is right under the flightpath in and out of the airport.
gobagheera
Arrowcreek is far enough west that it doesn’t get the plane noises, but yes most of the 89511 and especially the area around the Wolf Run golf course is noisy.
Sully
Yeah those military planes sure define the limits of noisy. Some are so loud, you’d think a shuttle was being launched, and they seem to take forever to get up to speed. 🙂
renonewbie
hi sully, did not look at pictures. looked at house.
Tom
I have become something of a self-study on airplane noise in the western portion of 89511, along the Mount Rose Corridor and above the Galena High School area.
Some southern parts of Saddlehorn closest to MRH I find to have too much departing aircraft noise, but others may not mind it at all. If we move to Reno, we want more quiet and serenity, not less, so we want to stay away from flight path noise.
If you are looking at houses above the Callahan Ranch Road intersection with MRH, and turning south onto Callahan, stay on the right side of Callahan, especially once it makes its big right curve soon after intersecting with MRH, the aircraft noise is acceptable. On the left-hand side of Callahan R. Road (driving southwest), and as you get closer to the Fawn Way area, the departure path seems closer, and the noise of ascending airliners becomes too noisy for me.
The departure path from Reno generally follows along parallel to the route of South Virginia Street, but to the east of it, than one route turns southeast and over the Virginia foothills area, and another turns southwest (Tahoe One Departure Route).
Before submitting an offer on a lot this summer, I flew up and sat there at various times watching and listening–and Guy also did that for me. We are still looking in that area. Some owners up there have yet to come to reality in pricing their homes.
There are some community action websites where neighborhood residents have met with airport planners over noise issues–hundreds of interesting comments to read about aircraft noise in different parts of 89511.
BBWolf
As a Callahan resident the only noise I notice are the helicopters flying direct path from Reno to Carson. Most often the NHP or life flight. I’ve been awaken by the sound of deer traversing my new landscape rock more than airtraffic!
I’ve lived in three areas in Reno and all three have some level of airport/airtraffic noise much of which was dependent on temperature and wind.
Sully
wolf, I think the point was some areas have more than their share of noise. When I was renting near Wild Creek golf course, the daily landings were coming in right over the golf course. Since I’ve moved I have heard just one plane in six months, a military plane, probably didn’t know where he was gong or how to get there.
So, even though wind change will determine take off and landings, for the most part they land from the north and take off toward the south.
homepop
There is no requirement in Nevada (as opposed to California) to disclose airplane noise and flight paths. We learned the hard way. When we were still looking at the house we eventually bought (on Flanders), one of our future neighbors came out to say hello. Just then an airplane flew directly over us, so loud we could not hear each other talk. When I asked her if that happened very often, she said, “no, not at all, that is very unusual”. The airport authority eventually told me that 85% of take offs and landings occurred right over our house (!), and due to some bureaucratic quirk, we were not eligible for replacement windows that dampened the sound somewhat (!!). I am probably more sensitive than most about that kind of noise, but I was sure happy when we sold that house (even taking a $100K bath). We now live in Quiet Carriage House…
Doug B. Cooper
Before all the homes were built in the area, the flight path was above Damonte Ranch… back when you could hunt ducks and find arrow heads over there.
The airport recently replaced every window and door in my grandparent’s home FOR FREE. Very nice, double pane windows that insulate the house much, much better.
Gary
Everybody loves irony, so I’m sure those unpaid subcontractors must have gotten quite a chuckle at seeing security guards employed to keep common thieves outside ArrowCreek, while the person whose house they were helping to build would turn out to be (in their eyes) the real thief.
I guess some ironies are just cruel.