Ok loose credit standards personified. This self aggrandizing 24 year old UNEMPLOYED web designer managed to buy 6 homes in less than two years using liars loans. The fact that he lied on his loans on his loans isn't surprising. I think it's the fact that he thinks getting enough media attention will bail him out. It will have the opposite effect especially since he has already admitted to mortgage fraud multiple times on his blog. Said thing is we predicted something like this would come out during the current run up of real estate in California over a year ago on this blog.

Labels: liarsloan, loan

  ¶ Ok loose credit standards personified. 0 Comments

Flip that House showing signs of market corrections My wife Roxane is HGTV addict. She regularly watches the nearly every home improvement show on almost every channel. One she has been watching is "Flip that House" since she was in charge of the improvements we put into our California home before selling. We had quite a bit of work done on the house which included air conditioning, redoing the hardword floors, redoing the kitchen with granite and a new period accurate tile back splash. We also repainted the entire house.

On trend we have both noticed is the houses on "Flip that House" are no longer actually selling. Previously on the show they would show the actual profit from flipping the house. Now they just show the "projected profit." There's a problem with this - these shows take a year or so to produce - If the house sold then it's a simple matter of adding the graphic at the end of the show showing the actual profit. They have stopped doing that and only show what the "projected profit" at the end work on the house. They haven't included the carrying cost on the house (that no interest mortgage) nor do they include realtor's fees!

This struck me as odd as I watched a California couple attempted to flip a home in Thousand Oaks. They bought the house for 1.1 million, put $50,000 into and then attemped to put it on the market for 1.25 million. This couple had previously been flipping condos and so were used to just literally throwing on new paint and window treatment and then selling the condo. The problem of course was their expectations and the buyers expectations were completely at odds. For example in re-doing the kitchen they left the original plain white appliances. Someone buying a home for 1.25 million is going to want stainless steel and Traulsen fridges. On the island they went for granite tile instead of a solid custom cut piece of granite! When the agent asked why, they mentioned it would have been too much work! Yes but buyers in this market expect it

They didn't put in hardwood floors and instead put new plantation blinds throughout the house. Here's a hint guys - a million dollar home buyer is not gonna be impressed with the $800 you spent on blinds at Pier One.

The other problem of course is that they bought at the height of the California market were trying to flip it without understanding the market they were selling to. A million + home buyer has certain set of expectations. Even our home we put custom granite and tile with redone hardword floors. For 1.25 million - I expect hardwood floors throughout the home and a better kitchen.

Labels: Condoflippers, FlipthatHouse, HGTV, ThousandOaks

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