Purchased for $2,660,000 in April 2006 with 25 percent ($532,000) down but a second added for $182,000 two months later, the fully remodeled Victorian home at 1855 Laguna with a big Viking and Sub-Zero in the kitchen returned to the market a week ago.
Now listed as a short sale for “$2,195,000,” three weeks ago a notice of default was filed on the Lower Pacific Heights property with $57,667 past due.
On Friday the sale of the renovated Victorian in Lower Pacific Heights closed escrow with a reported contract price of $2,100,000, 21 percent ($550,000) below its sale price in 2006.
And yes, the property also changed hands in 2002 for $1,550,000, but that was prior to a major remodel, expansion and seismic reinforcement.
∙ 1855 Laguna: Nudged To Market In Lower Pacific Heights [SocketSite]
∙ San Francisco Bucks CA Foreclosure Trends, But Not In A Good Way [SocketSite]
Nice. They plunked everything they had into SF real estate and lost it all.
Oh well, it was only half a million dollars. The owner describes himself on LinkedIn as a “Real Estate Entrepreneur” and is a real estate professional, but his prior job was Assistant Editor at [company name] Publishing & Multimedia. Guess the prior job didn’t give him a whole lot of training in this field! [Note, these edits are tipster’s, not the editor’s]
He’s now the CEO of a company that bills itself like this:
[His company] provides value-added brokerage services to home buyers throughout the Bay Area. We use proprietary market analysis tools to empower our clients through education. Our goal is simple: provide our clients the tools and advice to make the most informed, confident real estate decisions possible.
Life savings lost in real estate: check. Notice of default filed: check. Now advising others on how to invest in real estate: check, check and check.
What a profession!
What does his company’s description even mean? “Empower clients through education”??? “Use proprietary market analysis tools”??? It sounds like smoke and mirrors for people who want someone to hold their hand while they make a really big decision about something neither party knows anything about.
tipster –
“They plunked everything they had into SF real estate and lost it all.”
“Life savings lost in real estate”
HOW THE HELL WOULD YOU KNOW THIS.
Just because you wish to believe this to be true doesn’t make it so.
You have NO IDEA what’s going on here – try to find something else to do today – we’re tired of reading your BS.
although I agree that tipster is unlikely to know if the person lost their life savings or not… I do find this bit disturbing:
provide our clients the tools and advice to make the most informed, confident real estate decisions possible.
I’m not sure I’d want to use his proprietary market tools to help me make an empowered Bay Area RE buying decision.
in general I like this house. the location may have challenges, but that has never changed.
I’ve always found it more useful to understand things for myself rather than pay bs artists to think for me.
umm, is that what your r/e broker does for you?
Not a tax accountant, but of course, if he is a bona fide “real estate professional”, then he probably will be able to deduct the entire loss here against other income, which most regular sellers of real estate can’t do.
So I think it’s safe to say that the seller didn’t lose their “life savings in real estate”, even though from a karma point of view that’d be a nice thing to have happen.
Based strictly on anecdotal evidence, however, I still think what tipster outlines is how a large number of people end up in real estate in The City: they start out as a writer, assistant editor or some other “creative professional” that someone with a liberal arts degree can walk into straight out of college and then realize by the time they are thirty that you can’t really live in The City on a less than 60K salary. They start studying for the california real estate salesperson examination and start thinking that they could be the next Nina Hatvany. When they make a sale or two, the decide to take the proceeds and start “investing”, and well, you get the above result.
Hope he at least fully-funded his SEP IRA before getting into this place.
“Not a tax accountant, but of course, if he is a bona fide “real estate professional”, then he probably will be able to deduct the entire loss here against other income”
Nor am I, but I was under the impression that even for real estate professionals the passive loss deduction was not available for their primary residence.
tc_sf, that’s a good point, but I assumed that it wasn’t his primary residence and it was strictly investment property; I shouldn’t have since propertyshark shows the owner as a revocable trust with the same address as the subject of this post.
As far as commenting on the seller’s business description (quoted by tipster in the first comment), I’d have to know more about what he’s charging for and how much: real estate is a market riddled with asymmetric information, so you can make the “most informed, confident decisions possible” given the generally available information and still lose your shirt.
I could be wrong about this, but my understanding is a passive loss can only offset $25,000 of income. If that is correct, they would have had to have had significant passive gains to get much tax advantage.
“passive loss can only offset $25,000 of income”
That’s true if you’re not a “real estate professional” (which I think requires 750 hours dedicated and that being more hours than your other professions — also there are rules around if you’re an employee vs. independent contractor, and if you own part of a real estate business). If you qualify, then as long as you’re actively involved, it can offset other income.
Tipster , Brahma, etc.
Bubblesurfer is correct. You have no idea what is going on here. I am 100% confident in that.
The seller isn’t in real estate, and this definitely isn’t “everything they had”. In fact they have so much that taking a seven year hit to the credit rating doesn’t mean much to them.
You have the wrong person, so the other comments are irrelevant. Sorry.