Where can we even start with 512 John
? So much to cover.
First, believe the hype. This is a striking masterpiece of a home, built in 2000 in a great location, the kind that some folks are just dreaming about when they write "panoramic ocean views." The home is set high above the street and takes good advantage of the added privacy. (MBC might criticize the first-floor master facing the street
, except it's private and it drinks up the ocean views.)
The home's style might not be yours. It's very modern, Japanese-inspired, using simple materials – concrete, glass, bamboo, steel. The walls are white. You get a feeling of order, cleanliness, simplicity. It's striking. It just might not suit your furniture, your plates, your clothes or your kids. But it's great.
For all that, the sellers would like $4.35m
. (They started at $4.45m in February, but re-listed to hide that fact
.) As of June 26, it's been on the market 129 days.
When a seller has trouble finding a buyer, the question becomes: Can you rent it out?
At 512 John, that's now an option. This week's print ad offers the home for rental at, achem, $20,000 per month
How does that compare to the costs of owning
512 John? If you take out a loan of $3m at 6.75% (30y fixed), you'll pay $19,500/mo. just on the 1st TD, and $50k in property taxes. Oh, and that assumes a down payment of $1m+.
So, if you rent this house, even at the rate of $20k/mo., you keep your $1m in the bank and save about $50k/yr. But you don't get to watch the home appreciate in value.
is the wrinkle in this story. Evidence suggests this house is a 2007 flip.
The previous owners paid about $2.7m
in total by the time construction was complete in 2000. Now the county assessor shows that a sale closed Feb. 15, 2007, for $4.075m
Funny, the original listing for this property came out the very next day
– at the aforementioned $4.45m.
At the moment, the sellers are hoping for $275k more than they paid 4 months ago. Or, they'll let you cover their new mortgage, so they can sell later when the home is worth more. Which is the smarter move for today's buyer?