There are not many properties going into foreclosure in MB these days, but there are some, and there's a story to each one.
How about one that is facing the prospect of foreclosure for the second time in one year?
Almost exactly one year ago, MBC wrote about a few properties in MB that were in default and apparently headed to foreclosure (see "Foreclosures in the News, and in MB
" for a strut down memory lane). They included:
- 601 Larsson, which was for sale at the time for $2.499m; it never made it to auction, but sold short in December 2007 for $1.710m, well below the Sept. 2005 purchase price of $2.0m (see "Close the Books on 601 Larsson");
- 958 Rosecrans, which had been purchased in July 2006 for $977k; went sour in less than a year, and ultimately sold at auction for $828k in May 2007; and
- 225 39th St. (pictured), which hadn't changed hands recently, but which apparently had a $1m loan against it go bad, and was headed to auction.
Well, 225 39th is back in the foreclosure news.
It didn't get to auction last year – instead someone overpaid for it: $1.595m
, in a private sale closing in June 2007. The buyers fixed up the home nicely and put it up for sale in August at $1.745m
, looking to turn a tidy profit (+$150k).Problem:
That was far too high for an unremarkable 3br/3ba, 1600-sq.-footer one door off of Highland in El Porto. (As the area was once known, way back when.)
Shortly came the credit crunch, and a slowdown in sales that has hit El Porto especially hard, and this listing hit the rocks.
The sellers allowed the price to come down, and even left it at $1.525m
– a price that guaranteed a loss on the investment – for several weeks this year.
But long before then, they must have seen the writing on the wall. They stopped making payments on their $1.2m loan and were in default by December last year. Late last month, the lender decided to move toward a foreclosure sale, and the listing was canceled. (For more, use PropertyShark.com
; it allows 6 free property searches a day.)
This must have looked like a deal to the would-be flipper buyers, but they all but sealed their fate when they paid $1.6m, miscalculating the demand for the home at resale. The case is reminiscent of that of 2507 Valley
, purchased at auction last October for $1.643m
, put up on offer for $150k more at year's end, and sold 2 weeks ago for a loss at $1.5m
As 39th proceeds down the foreclosure road, the loan in default is $1.2m, and the home is in better condition. It will be some time before there's an auction, but you can almost see the "bargain" bells ringing again for someone else in the future. A word to the wise:
UPDATE: The story has been updated; the original version erroneously reported that 225 39th had sold at auction last year. Instead, it was "rescued" with an off-market private sale before the trustee's sale.