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Old 02-15-2007, 11:35 AM
 
Location: WPB, FL. Dreaming of Oil city, PA
2,909 posts, read 13,669,117 times
Reputation: 1025

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I mentioned this in my last thread. Yesterday me and dad personally visited the house.


South Florida speculator may lose over $150k on flipping
This story is being told by me with my own eyes and knowlege. In early 2006 someone bought this 3/2.5/2 lakefront house measuring about 2900 total square feet for $440k. He then upgraded the floors with marble and the counters with granite. A little over a year later, he realised his mistake and is cutting his losses now before prices go down even more which the experts are forcasting this to be the case.

He wants $350k or best offer and is doing a reserve auction. My dad says the seller may still be stuck with that house as he stated in the auction rules he has the right to reject low bids and make a reserve. The reserve is tentative or made up. He will review the highest bid and decide on the spot if he wants to take it or leave it. My dad says its worth about $300k, I say its worth about $250k because prices are going down rapidly.

We already did the math and determined it is going to be about break even if we bought it for investment and rented it out. The only reason to buy it is to live in it and it arent worth more than $250k anyway. Property taxes is about $6k a year and HOA is just over $5k a year. Insurance is $3400 a year and going up every year. Dad has decided he wont bid, he says the seller isnt gonna let it go for $250k anyway and others may bid higher.

This house has some poor designing and doesnt make very good use of space. The master bedroom is 17x13 but the other one is 16x10 and the third one just 10x10. This is not big enough for much more than a bed and the closet is so tiny you can only place about a dozen articles of cloth. My bedroom is 2.5x the square footage of the 10x10 bedroom. Having such different size bedrooms is poor design. What is a family going to do? It wouldnt be fair for one child to get the 10x10 and the other to get the 16x10. There isnt enough room to put both in the 16x10. The only fair option is for families with one child and he gets the 16x10 and the 10x10 is just big enough to be used as game room, den or study room for him.

The half bath downstairs is fine. Theres a bathroom in the master bedroom and the two small bedrooms share a third bathroom. Likley that bathroom wont need to be shared as the 10x10 isnt really big enough and unfair to put a child in. More poor design ensures as the sink in the master bathroom is too long. The closet could be bigger rather than the sink. Also there is no door to the bathroom! Theres a closet next to the shower, another bad design. The humidity would ruin your cloth. You could put towels, soap and shampoo in that closet but its too big and wasting space that could be better used for a bigger bedroom and closet within the bedroom. The house feels small due to the poor design and I wouldnt recommend more than 3 people live in it.
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Old 02-15-2007, 11:37 AM
 
Location: WPB, FL. Dreaming of Oil city, PA
2,909 posts, read 13,669,117 times
Reputation: 1025
The 5000 character limit really needs to be raised!


This is also a cookie cutter house on a zero lot line(100x50 lot) and I measured just 12 feet of space between the neighboors houses. All the houses in that part of the subdivision look similar or identical. In fact as we were driving towards the gated exit, we passed by a division with about 20 houses, all that appeared identical in shape, size and even color! Boring! There were nice custom houses where no two looked alike in the upscale divisions and those houses looked very nice on the outside and im sure they will look great inside too. I believe those prices to be $600k to $800k and those houses were 3500-4000+ total square feet. Insanely expensive even for south Florida! Dad considers a $250k or quarter million house expensive and one costing 3/4 million truly insane! He says a reasonably priced house would be $50k to $100k but youd be hard pressed to find one in a safe neighboorhood in Florida(especially south) because speculators like the one who bought the $440k house have massively inflated prices to insane proportions.

The speculator is going to take easily $100k loss selling the house plus lose money on property taxes, HOA, insurance, mortgage and paying for marble and granite upgrades. His total losses could very well exceed $150k! His greed of trying to make a quick buck ended up his biggest mistake. Hopefully the other speculators learn and stop snapping up houses to flip at insane prices to other speculators or unsuspecting buyers who will get burned and possibly foreclosed. The experts are predicting the bottom of the market to be in 2009 with further drops of about 20%. If Florida gets a bad hurricane, drops could be 50% then! This will once again make Florida, even the southern part affordable again to the working middle class and not just rich people.

Today, house prices are still insane even though they have come down about 20% from the peak. In my county, you need around $300k for an adequate house with 3-4 bedrooms and 2000-2500 total square feet to call home to live alone or start a family. You would need a single salary of at least $100k or a dual salary of at least $120k to afford a such house. It is clear that house prices are insane and out of reach for middle class. Many people are leaving Florida to other states where nice houses can be had for as little as $25k making them reasonably priced and affordable to the working class families.
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Old 02-15-2007, 12:55 PM
 
Location: PA
669 posts, read 3,107,645 times
Reputation: 287
Why do you keep saying cloth? Nitpicking, but isn't it CLOTHES? or CLOTHING?

If it's such poor design, go build a house yourself...
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Old 02-15-2007, 02:02 PM
 
94 posts, read 405,466 times
Reputation: 45
Quote:
Originally Posted by bmurphy View Post
Why do you keep saying cloth? Nitpicking, but isn't it CLOTHES? or CLOTHING?

If it's such poor design, go build a house yourself...
what is it with you? the guy is simply sharing his experience. by the same token , if you do not like what he says do not read it. write something yourself. some logic huh ?

By the way thanks NeedAffordableHome for your post.
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Old 02-15-2007, 02:19 PM
 
232 posts, read 855,268 times
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Good Luck. keep us posted on what all you find!!!! I hope you find one and actually go through the process then you can let us know what it was like.
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Old 02-15-2007, 04:16 PM
 
Location: So. Dak.
13,495 posts, read 36,078,015 times
Reputation: 15193
That was a good and informative post, NAH. I've been wondering what was happening with that house. I believe that your Dad and I share some of the same opinions because 3/4 of a million dollars for a house is beyond my comprehension, too. I guess just knowing the fact that he was one of the flippers, I don't really feel sorry for him. He took a big gamble and lost. I thought it was some family who were being forced out so I felt sorry for them.

You gave a total of 14,400 a year for just the expenses on the house without considering any fixing up or upkeep. I know you don't like apartments, but that would get you an extremely nice apartment each year. Thanks for keeping us informed about it.
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Old 02-15-2007, 05:03 PM
 
Location: WPB, FL. Dreaming of Oil city, PA
2,909 posts, read 13,669,117 times
Reputation: 1025
I bet you could rent a house like that for about $1800($21,600 a year) a month which isnt such a bad deal and looks to be cheaper than buying that house and paying $30k a year for every expense combined, including mortgage. You dont get equity but that doesnt matter if house prices are still going down or at least not going anywhere up. Of course I wouldnt rent something this expensive either, I would just relocate somewhere houses are very affordable. You want warm weather, look into Texas. That kind of house would be only about $150k in Dallas The taxes/insurance/hoa will be much less too
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Old 02-15-2007, 06:35 PM
 
Location: Tampa Bay
598 posts, read 2,180,273 times
Reputation: 213
Quote:
Originally Posted by Need_affordable_home View Post

This house has some poor designing and doesnt make very good use of space. The master bedroom is 17x13 but the other one is 16x10 and the third one just 10x10. This is not big enough for much more than a bed and the closet is so tiny you can only place about a dozen articles of cloth. My bedroom is 2.5x the square footage of the 10x10 bedroom. Having such different size bedrooms is poor design. What is a family going to do? It wouldnt be fair for one child to get the 10x10 and the other to get the 16x10. There isnt enough room to put both in the 16x10. The only fair option is for families with one child and he gets the 16x10 and the 10x10 is just big enough to be used as game room, den or study room for him.

The half bath downstairs is fine. Theres a bathroom in the master bedroom and the two small bedrooms share a third bathroom. Likley that bathroom wont need to be shared as the 10x10 isnt really big enough and unfair to put a child in. More poor design ensures as the sink in the master bathroom is too long. The closet could be bigger rather than the sink. Also there is no door to the bathroom! Theres a closet next to the shower, another bad design. The humidity would ruin your cloth. You could put towels, soap and shampoo in that closet but its too big and wasting space that could be better used for a bigger bedroom and closet within the bedroom. The house feels small due to the poor design and I wouldnt recommend more than 3 people live in it.
Just curious why you feel these are signs of poor design? All of these are standard in most homes. Different size br's with 1 10x10 (child's room/nursery/office)... Closet behind/next to the bath (no moisture problem if bath was constucted propery with greenboard and exh. venting)... also mentioned 12 feet between homes, also very normal/typical (ours is 10')... and 50x100 lot is not exactly a zero lot-line either. All these are normal and typical and not poor design. BTW, we have a 10x10 br that we use as our master, with a KING size bed! It's very cozy feeling and there is plenty of space around to walk and open the closet. We just prefer to use the larger rooms for useable living areas. So 10x10 is really not a big deal and rather common actually and typically used as a child's room.
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Old 02-15-2007, 06:40 PM
 
Location: WPB, FL. Dreaming of Oil city, PA
2,909 posts, read 13,669,117 times
Reputation: 1025
We made the comparsion against our house. All our bedrooms are about 18x14 in size and our lot is over an acre. Theres many things dad didnt like about that house. I still say 10x10 is too small, you cant put anything more than a bed. You should see our bedrooms and all the stuff we have and youll realise even my 18x14 feels crowded
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Old 02-15-2007, 06:43 PM
 
Location: PA
669 posts, read 3,107,645 times
Reputation: 287
I don't know why you care about the third bedroom being small. Why do you need room for more then one bed if you're going to live alone?
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