As we wrote this past March:
Purchased for $1,280,000 in May 2008, the single-family at 1124 Stanyan was gutted, started rebuilding (“new electrical & plumbing [but] not finished”), and then taken back by the bank. On the market and asking $899,000 in its “contractor’s special” condition.
As a plugged-in reader noted, it was the second that had foreclosed upon the property at the time (yes, there is a difference), but it appears the first has now done the same.
From the new listing for 1124 Stanyan:
Framed back to it’s original splendor with an open living/kitchen area, formal dining room & formal living on the main level, 3 beds & 2 baths upstairs with a 4th room and bath on the lower garden level plus two car parking this hot reo project is not to be missed. Under construction when foreclosed on, much of the construction work appears complete with approved permits on file with the city of san francisco. So sharpen your pencils & come take a look at this reo opportunity.
And now they’re asking $1,300,000.
∙ Listing: 1124 Stanyan (gutted) – $1,300,000 [MLS]
∙ Save $381,000 (If You’ve Got The Cash) [SocketSite]
∙ Failing Grades In Auction Buying 101 (And Commenting) [SocketSite]
“sharpen your pencils”
This was worth $1,280,000 at the fin de epoque. Now that it’s a basket case it is worth 20 grand more?
I do like the use of the term “fixer upper”.
Bon chance.
So what were they selling at the $899K price? The second mortgage? This just doesn’t make sense to me. Please explain.
What was done between the $899k asking price and today’s $1.3m? It is a project.
Original splendor???? WTF is the listing agent talking about.
Are there any sinks, tubs, showers….kitchen?
Well, I suppose one has to credit the seller with cojones anyhow. Where do they pull these numbers from? Is it simply the bank thinking that they should, of course, get all of their money back from the sale, regardless of any pesky changes in the market?
Bankers get really strong pot, don’t they.
East West Bank took it back for the $1,000,000 (plus back interest, late fees, etc.) that United Commercial Bank originally lent out. Wiped out were a 2nd for 300k and a 3rd for 400k. Sellers in May 2008 did well with 1,280,000. Where did the rest of the money go?
I love this listing!
“Framed back to its original splendor”
so they have framing up. big selling point I guess.
and even better
“much of the construction work appears complete”
it does? sparky-would you say that most of the construction work appears complete?
because to a noob like me having no walls or insulation or almost anything doesn’t seem like most of the construction work is nearly complete.
my fave is how different this place looks from the two drawings.
I love the area, but not this street. more busy than I’d like.
“much of the construction work appears complete”
I take that as meaning that much of the current phase of construction is complete, meaning the framing, electrical, and possibly plumbing. But then you should take into account who wrote that statement. Unless it was written by an experienced builder you can’t give it much weight.
Anyone bidding on this place would want experienced eyes to review the condition of the job. Hopefully there isn’t a big goofup lurking in plain sight. It would be a bummer to discover that some expensive structural change needs to be done that requires tearing out much of what is already there. The permits should shed some light on that.
Though this property is targeted towards builders, it might even attract inspired DIY homeowners. Most of the heavy lifting (literally) is completed. Hire some dry wallers – those guys work really fast. Get the kitchen complete and at least one bathroom. Then you can move in and incrementally finish the place.
I don’t know this neighborhood very well but agree with ex-SFer that this seems high considering the condition and the fact it is right on Stanyan. (Though doesn’t most of the traffic turn off at Frederick or Parnassus ?)
I did some digging and actually when it was 899k it was originally listed as a short sale. The agent turned it to an REO. (not supposed to) Yes the 2nd private money lien holder foreclosed on the property. By doing so, he agreed to take over the 1st lien. He never made a payment and the 1st lien holder immediately foreclosed on him. He tried to short sale the property. Short sales usually have a very low asking price to create multiple offers. Also when a bank sets a value on a property, there are a minimun of 3 valuations done. (appraisal, BPO, & Interior BPO).
I would say that much of the time consuming part of the job is complete, but less than 1/2 of the cost of the job.
I took a look when it was $899K and passed. $400 didn’t go in since then.
#7 is definitely my favorite photo. I must make a note to take a similar photo when we sell our place.
Now that I think about it, I’m going to figure out a way to shoot “X-ray” photos of properties, so you really can see what’s behind the dry wall/lathe & plaster.
(Though doesn’t most of the traffic turn off at Frederick or Parnassus ?)
yes, but a lot of traffic goes by here. 17th is the direct link between here and the Castro/Noe Valley/Market st.
A lot of people like me had to drive this route as it’s the most direct way between UCSF and SFGH.
I agree w/sparky-b. I bid $750k when this thing was up for sale last, and the word was that someone got it for $900k+. But then it never closed.
Depending on level of finish and the hands-on capabilities of the new buyer, this place is many-hundred-k$ away from done. It is likely that a bath upstairs will need to be re-done, and that the new owner will want to nuke the back windows & doors. I got no doc on inspections when it was up for sale last.
All that stated, the actual prime sqftage is less than you would think. A not-small %age is basementy. The location is not prime. “Bon chance” indeed!
so we were in contract on this house and pulled out at the last minute.
basically, the 899k listing was done by a broker who wasn’t authorized to list the property. its now listed by someone who represented one of the prospective buyers that we outbid to get to contract. our purchase price was just over $1 mil. zero work has been done since then (additional lien was closed out by bank), so i have no idea what they are smoking. there were 16 bids in that round.
structurally, it is framed, plumbing and electric are in (but not inspected). there are a few placement decisions that didn’t make sense that we would have changed (bathrooms, walls), but that is all relatively easy to do given where construction stopped.
all in all a great house, a tough block (no single family homes), and a lot of work. we budgeted $400k for construction, which everyone agreed would result in a very nice end product, able to sell at $1.8+.
beware, this bank is not the easiest counterparty to deal with (and i used to be a banker). hopefully the professional representation will improve things this go-round.
Do people here think it’s possible that Almost is right, that a 1m purchase and 400k of work would yield a 1.8m product? Seems crazy to me, and that this type of overestimating about flipping is part of the bubble fuel.
^^^
Yes I think it’s possible and putting $400K of your own money into extensive renovation isn’t what fueled the bubble, nor is it really “flipping”.
@almost – I think you got lucky. I was estimating $300kish remaining cost, but my analysis said that it would be tough to clear more than $1.4M, given the two floors of prime space and marginal location.
$.02!
Jim Fox – I think you are neglecting to account for holding costs, opportunity costs, risk factors, transaction costs, and the developer’s own time in that calculation.
I don’t think so MoD, he is counting cost of doing things while you are adding in whether or not any money would be made.
Can you buy a place for $1M, put in $400K and sell for $1.8M, yes you can. But $400K isn’t your profit because you need to subtract all the things you described.
Shorts sales agents are hired by the sellers.
Short sale means “we need to make a deal with the bank, as in noone has agreed to a short
price unless its says “bank approved”, even thenm if its complicated by mutlipkle liens, the bank may foreclose rather than work out a short sale.
REO agents are selected by bank asset managers.
This looks interesting to me,
Sold for 1.35M. Not a good buy IMO.
Agree with fluj, this is not a smart buy at all. Unless this house is more complete than let on, it seems like they are just asking to lose money in the future at that price.
I don’t get it; having permits and plans is worth more here than in other cities, but is still not worth much. They must have completed quite a bit of work for an “SF teardown” to be to be worth the same in pre-gutted condition as post-gutted condition.
That said, if it’s someone who can do the work himself/herself, it could be a pretty good buy. As a spec project it doesn’t work for most.
^^ That’s an end user, mind you. Maybe they get a 2.1M house for 1.7M. Then it sort of makes some sense.