10/10/10 had the wedding chapels working overtime. Fantastic weather for the Italian Festival downtown at Harrah’s. The town was hopping this weekend, and yet the Siena opted to close their casino operations on Friday, before this weekend’s big take. There are some new musings on the Siena situation over at REreno.
The $50M mortgage on the Siena is just a minor slice of the $650M RE Loans LLC fund lead by Bar-K (about $20M from RE Loans, and $30M from RE Reno LLC dedicated to the Siena). The RE Loans portfolio, traditionally a safe hard money investment, has absolutely tanked. There is an obscure yet arcane blog following the overall situation at Bar-K that is worth checking out.
In other heartening news, the Trustee’s Deed on Somersett Town Center finally recorded, with the bank (division) taking it back for $3,232,000 on the original $8,775,000. Devcon, the builder, and a subordinated loan of over $1,000,000 on the project, as well as mechanic’s liens for unpaid invoices on the tenant improvements. The Sale was originally scheduled for 30 July, then got postponed to 13 August, and postponed again to 14 September.
Who is Tofu Mary and why is she haunting RRB? She has a very pretty (if slash your wrists depressing) blog following economic trends and real estate. some of you will definitely recognize the “voice” behind the blog.
What can you say about 40 Pronghorn? Originally listed at least $3,995,000 while under construction and maybe higher, it sat high on the hill above Caughlin Ranch unfinished for a couple of winters. The new, reduced listing is at $1,785,000 and the listing finally has some actual pictures and not just renderings. What do you think about this place? It is still unfinished and I doubt it has a certificate of occupancy yet (no kitchen sink, missing railings, tumbleweed outside the windows).
Sorry I haven’t followed up with kalifornian on “What I Would do with $350,000”, but I was in the middle of making an offer on one of the places I would have recommended, 4985 7th Street #2. Asking $33,000 for an REO 2/1.5 townhouse that would have needed about $5000 in work to get it rentable. Rent would have been about $650, HOA $94, property taxes $80, insurance $20. It came with a 2 year home warranty that would have covered the stacked washer/dryer that ruined the living room ceiling and maybe the repairs! I got aced out (Active/Pending Loan) before I could submit my lowball but all cash offer. I bring this up only to illustrate my opinion of the investment market – break even seems to be at just about the median SFR. Above the median and you can’t make it pencil. Below, it is about your risk tolerance – can you make out better with a $20,000 condo in a sketchy area with an itinerant rental pool on Highview, a $35 – 45,000 unit in a better location (Smithridge), or $75,000 at Silver Creek, or a $150,000 SFR in the Old NW? Rental rates do not track to purchase prices in this stratum of the market, so it is all about your ability to attract and keep quality tenants.
The best commentary on the current “foreclosure moratorium” I’ve seen so far came to me via InclineJJ. I don’t think it all really matters. Do y’all?
smarten
Mike –
Do you mean to tell us that Tofu Mary is our own Diane? If so I’m shocked. The language used in Tofu Mary’s last post on this blog suggests that if the two are in fact one in the same, the depths to which Diane has fallen. Please tell me I’m wrong.
500 Miles
Mike,
Thanks for a great blog.
Regarding the “foreclosure moratorium,” I do think it all really matters. Tremendously.
At the Root of the Crisis …
http://www.zerohedge.com/article/root-crisis-we-find-largest-financial-swindle-world-history-where-counterfeit-mortgages-were
The MERS Edifice Quavers:
http://market-ticker.org/akcs-www?post=168845
Bank Disinformation II: Banks Attacking Rule of Law Frontally:
http://www.nakedcapitalism.com/2010/10/bank-disinformation-ii-banks-attacking-rule-of-law-frontally.html
Martin
Aww Mike, you were going to go all in on a $33K REO condo fixer? And Smarten was getting all excited that Mr. Negative had decided the time was right to buy a SFR.
bob_c
Sommersett golf is offerring introductory unlimited family golf memberships
for what they advertise as less than $300/month. I didn’t call for details, but
that is a crafty way to get revenue without yet going public. Golf courses
need traffic to stay afloat.
I was going to comment on the emotional aspects of buying at the peak and
being handed your humility, but it appears tofu mary says it all. To a lesser extent,
there must be tens of thousands of homeowners that resent their homes, because
they are underwater. I resented a negative ammortization loan I had many years
ago—I can’t even imagine being deep underweater. Gotta feel for these people.
I don’t know if Nevada is a non recourse state, but I’d just walk—corporate america
set that standard by getting bailed out and stealing what they could, no sense being a martyr for morale standards that don’t really mean anything.
Drive by poster
Nevada became a nonrecourse state for first mortgage purchase money loans (no refis, even if no equity is taken out) in 2009. Loans prior to that date are recourse loans, though I, admittedly not a part of the real property bar industrial complex, have not heard of any cases, at least in Northern Nevada, of a bank seeking recourse.
billddrummer
To bob_c,
I posted to the mortgage loan implode blog three years ago and coined the term ‘mortgage rent’ to describe homeowners who were merely renting their houses from the lender–not building equity or wealth.
It seems that thousands of Nevadans are ‘mortgage renters.’
Move to Reno?
Tofu Mary is just as wrong this time around.
I wonder what ever happen to that lady who bought a house across the street from tofu mary in Somersett. I think she paid $700k for it.
SetterFool
All of those $700K houses in Somersett are now $350K-$400K houses.
lurker
I think the Tofu Mary bashers need to stand up and present their case and specifically and logically argue where/why/how she is wrong.
Lady makes a heck of a lot more sense than I’ve seen on this blog in quite some time.
I’ll just guess they’re all tea-baggers. So easy to criticize and complain, so difficult to offer up original ideas or thoughtful, cogent, well-researched arguments.
“Keep your government hands off my medicare and home loans!” …. they all must be muttering, as they tool around Wal-mart on their rascals, spending away that disability, unemployment, and various other govt subsidized “income.”
bob_c
those wrong at the extreme peak of a bubble often are so hurt they adopt
the opposite extreme
downtownjunkie
It just gets better and better…
http://www.zerohedge.com/article/realtytrac-reports-september-q3-foreclosures-hit-all-time-record-just-time-plunge
longerwalk
Regarding predictions of the future: One would be well-advised to see how accurate ALL predictions were in the past by any given predictor. I would think deeply about how Warren Buffet sees things well before some newbie. Even a blind squirrel finds a nut now & again; to do it year after year takes something more.
MikeZ
I think the Tofu Mary bashers need to stand up and present their case and specifically and logically argue where/why/how she is wrong.
Excellent idea. And remember, the place to do that is on tofu mary’s blog.
http://tofumary.com/