Another Flopped FlipPosted on Friday, April 17th, 2009 at 4:58am.
For an even $1.6m, a pair of investors picked up 505 3rd, a tired, 4br/3ba, 2600 sq. ft. house with an odd layout, but a good location in the quiet South End.
The market was heating up, and if you could buy and hold this property a while, some day there'd be profit in it. Rent it out in the meantime, cover the expenses, and flip it when the time is right. Good plan.
We now know that 2005-06 was pretty much the peak around MB, depending. And with a new price cut this week to $1.599m, the would-be sellers are acknowledging for the first time that this bet on the local RE market won't pan out.
MBC has tracked 505 3rd on and off for 2 years, starting in June 2007 when the listing first came up at $1.949m. Yes, that was a markup of $350k (+22%) after a hold of about 21 months. (See "What's Right for 505 3rd?" from Aug. 2007.)
That price never seemed to make sense. But they did post one, and, we think, two separate escrows on the property within months of listing it at that markup. Those deals failed.
MBC last took note of 505 3rd in Aug. 2008 when it quit the market at $1.798m. (See "Recent Dropouts.") The sellers were still trying for $100k each.
But now, it's unloadin' time – if they can find a buyer.
What's the value these days for a dated South End home? The listing notes:
Recent lot sales in the South End of Manhattan Beach have gone for more...So this is a deal because it needn't be scraped?
Nearby 437 1st, cleaner, fresher and comparably sized (4br/3ba, 2600 sq. ft.), sold for $1.610m in June 2008 after a substantial remodel. We'd be surprised if that one's worth $1.4m now.
Know who got the timing right on 505 3rd?
The gentle soul who acquired it for $889k in Aug. 2000 and got $1.6m (+$711k/+80%) just 5 years later. It's worth a visit to a clifftop on Maui to hear the story.
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