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Finally took the Real Estate Investment Plunge….(long post with photos)
06-30-2009, 01:48 PM
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#1
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Thinks s/he gets paid by the post
Join Date: May 2008
Location: State of Confusion
Posts: 1,732
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We have been watching the RE market, trying to time the bottom, wanting to invest and move up at the same time.. We submitted five offers in two different states on bank-owned homes, explored a couple of short sales, but weren't having much luck finding what we wanted. We were getting burned out looking at homes (online and in person), and generally disgusted by how these properties were being marketed, offers handled and deals being done.
So, we decided to take a break, and decided that we would not look any longer, but if our (new) realtor found anything we would be open to looking… Turned off the computers, went out to dinner, and made plans to go pick out the new puppy we had been putting off getting until after the move. Told our realtor we were taking a break, but if he could find us an incredible deal on a home we could ordinarily never dream of buying in a neighborhood we could ordinarily never dream of living in…. Anyway, the next afternoon he called… in a panic… A new custom home had just come back on the market that morning in a very exclusive community; it had previously been on the market for over a year, the listing expired, it fell through the cracks and the bank wanted it off their books in June. They dumped the price to get it sold quickly; he believed it wouldn’t last a week at the new price.
We went over right away and looked; fell in love with the house and the setting, and made an offer on the spot-and only gave the bank one working day to respond. They grudgingly accepted with the caveat that we could close in 22 days… before their Second Quarter was over. And our 15K earnest money was non-refundable if we failed to close on time.
Getting appraisals, inspections, and a mortgage done in 21 days has been a marathon. It is no wonder why banks are taking such a bath on their RE assets- this was a million- dollar plus home and they refused to turn on the power, water, or gas for our inspections- we had to pay to put them in our name; even though we didn’t legally own the house. (good thing it didn't flood or burn down...)
All the appliances were stolen by the previous owner missing, along with some of the lights & plumbing fixtures, but overall the house was in great shape. Brand-new, was staged for showing at one time , but never lived in. Our lender wanted to see a working kitchen and bathrooms, so I installed the missing fixtures, brought in old appliances, and sweated through the appraisal. The HOA wouldn’t sign off until the yard was cleaned up, etc, etc, etc. It was touch and go, and a heck of a gamble but we did get the sale closed- a day early. 
Here are the details:
- 4000ft2/ 4Bd/4.5 baths/ Den/Library/ Guest house/ oversize 3-car garage/ 24-7 guard- gated community with 2 Nicklaus Signature golf courses, clubhouse, 3/4 acre lot, bare-bones landscaping, no pool.
- Lot sold for $300K in June 2005
- Construction loan in late 2006 at market peak was $800K
- Home was completed in late 2007, just as market started to turn; listed by builder in January 2008 at $1.35M
- Lender refused several short sale offers from investors at $850-$900K
- Lender foreclosed in September 2008, re-listed at $1.1M
- Listing expired in March 2009, apparently fell through the cracks when lender was bought out…
- New lender re-listed the first week of June at $650K to try to get it sold in June…
- We were the first offer in; at just over $600K; had only been back on the market one day.
- The listing agent was subsequently swamped with calls inquiring about the “new” listing and from people wanting to submit back-up offers in the event we couldn’t get our sale closed in June. Community consensus was that the bank panicked when they realized they had a dormant listing and drastically under-priced this one.
- There are several similar homes (not bank-owned) listed in the $1.05-$1.25M range, no comparable inventory under $1M
Our intention is to live in the home for a couple of years to satisfy our capital gains residency requirement; then sell it in (in 2-5 years? ) when the market recovers and (hopefully) use the net proceeds to put our ER funds over the top… Realize this much house is a bit of a gamble, but you have to live somewhere...
We closed Monday; here are a few photos of the home:
__________________
"A yawn is more disconcerting than a contradiction"
Mason Cooley
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06-30-2009, 02:34 PM
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#2
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2006
Posts: 9,174
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Papagos Mountains?
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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06-30-2009, 06:04 PM
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#3
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Thinks s/he gets paid by the post
Join Date: May 2008
Location: State of Confusion
Posts: 1,732
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 Quote:
Originally Posted by FinanceDude
Papagos Mountains?
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further east- The Superstition Mountains
__________________
"A yawn is more disconcerting than a contradiction"
Mason Cooley
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06-30-2009, 06:14 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Nov 2007
Posts: 1,572
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Quote:
Originally Posted by Westernskies
further east- The Superstition Mountains
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Cool! Here's our celebration song:
__________________
I purr therefore I am.
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07-01-2009, 10:26 AM
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#5
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2006
Posts: 9,174
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Quote:
Originally Posted by Westernskies
further east- The Superstition Mountains
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Are you on the scenic Arizona highway? I said papagos too soon. I pulled out my pics from Superstition I took last year and I kind aknow where you are............beautiful area, a little cooler than Phoenix.........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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07-01-2009, 10:47 AM
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#6
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Thinks s/he gets paid by the post
Join Date: May 2008
Location: State of Confusion
Posts: 1,732
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You were about two miles away, when you were sitting on the porch, drinking sarsaparilla, watching the gunfight... 
__________________
"A yawn is more disconcerting than a contradiction"
Mason Cooley
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09-15-2009, 08:59 PM
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#7
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Recycles dryer sheets
Join Date: Aug 2009
Posts: 177
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Quote:
Originally Posted by Westernskies
further east- The Superstition Mountains
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Superstition's ... wonderful .. absolutely stunning area you are in and I am very envious... if I go back to wickenburg can I stop by for a cocktail?
I only wished I could do what you are doing.. congrats and best wishes...
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09-16-2009, 12:15 AM
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#8
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Thinks s/he gets paid by the post
Join Date: May 2008
Location: State of Confusion
Posts: 1,732
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Quote:
Originally Posted by heyduke
Superstition's ... wonderful .. absolutely stunning area you are in and I am very envious... if I go back to wickenburg can I stop by for a cocktail?
I only wished I could do what you are doing.. congrats and best wishes...
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Absolutely! - How about this weekend?-you can help us move in!  We have to be out of our current house by Monday, and could use the help...
You know what they say about friends helping you move...
1. Friends will help you move
2. Good friends will help you move twice
3. Really good friends will help you move a body...
__________________
"A yawn is more disconcerting than a contradiction"
Mason Cooley
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06-30-2009, 02:36 PM
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#9
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Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Join Date: Aug 2006
Posts: 9,174
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Quote:
Originally Posted by Westernskies
We have been watching the RE market, trying to time the bottom, wanting to invest and move up at the same time.. We submitted five offers in two different states on bank-owned homes, explored a couple of short sales, but weren't having much luck finding what we wanted. We were getting burned out looking at homes (online and in person), and generally disgusted by how these properties were being marketed, offers handled and deals being done.
So, we decided to take a break, and decided that we would not look any longer, but if our (new) realtor found anything we would be open to looking… Turned off the computers, went out to dinner, and made plans to go pick out the new puppy we had been putting off getting until after the move. Told our realtor we were taking a break, but if he could find us an incredible deal on a home we could ordinarily never dream of buying in a neighborhood we could ordinarily never dream of living in…. Anyway, the next afternoon he called… in a panic… A new custom home had just come back on the market that morning in a very exclusive community; it had previously been on the market for over a year, the listing expired, it fell through the cracks and the bank wanted it off their books in June. They dumped the price to get it sold quickly; he believed it wouldn’t last a week at the new price.
We went over right away and looked; fell in love with the house and the setting, and made an offer on the spot-and only gave the bank one working day to respond. They grudgingly accepted with the caveat that we could close in 22 days… before their Second Quarter was over. And our 15K earnest money was non-refundable if we failed to close on time.
Getting appraisals, inspections, and a mortgage done in 21 days has been a marathon. It is no wonder why banks are taking such a bath on their RE assets- this was a million- dollar plus home and they refused to turn on the power, water, or gas for our inspections- we had to pay to put them in our name; even though we didn’t legally own the house. (good thing it didn't flood or burn down...)
All the appliances were stolen by the previous owner missing, along with some of the lights & plumbing fixtures, but overall the house was in great shape. Brand-new, was staged for showing at one time , but never lived in. Our lender wanted to see a working kitchen and bathrooms, so I installed the missing fixtures, brought in old appliances, and sweated through the appraisal. The HOA wouldn’t sign off until the yard was cleaned up, etc, etc, etc. It was touch and go, and a heck of a gamble but we did get the sale closed- a day early.
Here are the details:
- 4000ft2/ 4Bd/4.5 baths/ Den/Library/ Guest house/ oversize 3-car garage/ 24-7 guard- gated community with 2 Nicklaus Signature golf courses, clubhouse, 3/4 acre lot, bare-bones landscaping, no pool.
- Lot sold for $300K in June 2005
- Construction loan in late 2006 at market peak was $800K
- Home was completed in late 2007, just as market started to turn; listed by builder in January 2008 at $1.35M
- Lender refused several short sale offers from investors at $850-$900K
- Lender foreclosed in September 2008, re-listed at $1.1M
- Listing expired in March 2009, apparently fell through the cracks when lender was bought out…
- New lender re-listed the first week of June at $650K to try to get it sold in June…
- We were the first offer in; at just over $600K; had only been back on the market one day.
- The listing agent was subsequently swamped with calls inquiring about the “new” listing and from people wanting to submit back-up offers in the event we couldn’t get our sale closed in June. Community consensus was that the bank panicked when they realized they had a dormant listing and drastically under-priced this one.
- There are several similar homes (not bank-owned) listed in the $1.05-$1.25M range, no comparable inventory under $1M
Our intention is to live in the home for a couple of years to satisfy our capital gains residency requirement; then sell it in (in 2-5 years? ) when the market recovers and (hopefully) use the net proceeds to put our ER funds over the top… Realize this much house is a bit of a gamble, but you have to live somewhere...
We closed Monday; here are a few photos of the home: |
Beautiful house......sometimes luck finds you.........
__________________
Consult with your own advisor or representative. My thoughts should not be construed as investment advice. Past performance is no guarantee of future results (love that one).......:)
This Thread is USELESS without pics.........:)
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07-02-2009, 03:38 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Jul 2008
Posts: 2,058
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Not really! Westernskies went out and spent quite a bit of effort in his quest. On the other hand, I am not interested in RE and spend more time looking for good stock buys. RE luck wouldn't find me. 
Time will tell if either of us (or both) has made the right move.
__________________
Couple both 52-year-old, with 2 children in college. DW RE @ 50. No pension, no benefits for either of us. Working part-time for travel money (in good years that is, and for food in lean years!).
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07-02-2009, 05:00 PM
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#11
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Recycles dryer sheets
Join Date: Jan 2008
Posts: 411
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Sweet deal! DW and I would be happy to house sit it for ya when we take our winter vacations. Perhaps you'd care to try out our fine Pacific NW skiing while we soak up some Arizona sun
__________________
"There is no dignity quite so impressive, and no independence quite so important, as living within your means." Calvin Coolidge
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07-02-2009, 06:56 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Nov 2005
Location: North of Montana
Posts: 1,460
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We'll offer house, snowmobiles, ice-fishing equipment and 4wd vehicle. -40 is energizing. You may want to stay 3 months.
__________________
“You can fool too many of the people too much of the time.” – James Thurber
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07-02-2009, 07:31 PM
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#13
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Thinks s/he gets paid by the post
Join Date: Jul 2008
Posts: 2,058
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Quote:
Originally Posted by kumquat
We'll offer house, snowmobiles, ice-fishing equipment and 4wd vehicle. -40 is energizing. You may want to stay 3 months.
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Wow! Such a generous offer! How will Westernskies be able to resist? Why don't you throw in free booze for the duration of stay? He's gonna need it to stay warm.
Hey, that's heating by ethanol, a clean alternative energy! Yes?
__________________
Couple both 52-year-old, with 2 children in college. DW RE @ 50. No pension, no benefits for either of us. Working part-time for travel money (in good years that is, and for food in lean years!).
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06-30-2009, 04:03 PM
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#14
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Thinks s/he gets paid by the post
Join Date: Nov 2007
Posts: 1,572
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I'm so happy for you Westernskies!!! It's breathtaking Looks like a nice place for that puppy you were thinking of adopting. 
__________________
I purr therefore I am.
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06-30-2009, 06:15 PM
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#15
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Thinks s/he gets paid by the post
Join Date: May 2008
Location: State of Confusion
Posts: 1,732
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We had literally just come through the door with the new puppy when the realtor called... after us joking on the drive home that getting the dog might change our luck...We were going to name him Lucky, except DW lost a Super Bowl bet with her daughter and we had to name him Ben...
__________________
"A yawn is more disconcerting than a contradiction"
Mason Cooley
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06-30-2009, 06:20 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Nov 2007
Posts: 1,572
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Quote:
Originally Posted by Westernskies
We had literally just come through the door with the new puppy when the realtor called... after us joking on the drive home that getting the dog might change our luck...We were going to name him Lucky, except DW lost a Super Bowl bet with her daughter and we had to name him Ben...
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PICTURES!!! Please, oh please!
__________________
I purr therefore I am.
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06-30-2009, 04:10 PM
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#17
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Full time employment: Posting here.
Join Date: Jun 2005
Posts: 728
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That sounds like a great deal. There's nothing like instant equity on a good deal. Imagine if you did that deal three or four times in this market.
__________________
You take the blue pill - the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill - you stay in Wonderland and I show you how deep the rabbit-hole goes.
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06-30-2009, 04:23 PM
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#18
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Thinks s/he gets paid by the post
Join Date: Dec 2006
Location: Lone Star State
Posts: 4,374
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Wow...that house is AMAZING! ER forum party perhaps? 
__________________
......ibyoig......
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06-30-2009, 04:32 PM
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#19
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Thinks s/he gets paid by the post
Join Date: Nov 2007
Posts: 1,572
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I'll bring the chips and dip
__________________
I purr therefore I am.
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06-30-2009, 04:51 PM
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#20
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Thinks s/he gets paid by the post
Join Date: Jan 2007
Location: Silicon Valley
Posts: 1,025
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Maybe this is karma after the last disaster you had on the previous saga. Looks beautiful.
__________________
I be a girl, he's a boy. Semi-FIRED July 08. Mid 40s, no kidlets. Likely to unSemi-FIRE last half of 2009 to sweeten the pot. Market crash of 2008 demonstrated we were not as comfortable with projected revenue as we thought.
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