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Old 07-14-2010, 05:24 PM
 
515 posts, read 1,111,585 times
Reputation: 410

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So I've been browsing some of the nice properties that have taken massive price hits due to things like ARM expirations and such and I ran across this really weird combination of sales and resales.

26 Princeville Lane, Las Vegas (unincorporated), Nevada 89113 offered for $499,900 | BlockShopper Las Vegas
11 Hazeltine Lane, Las Vegas (unincorporated), Nevada 89113 | BlockShopper Las Vegas

Seems the owners of these two homes, that are only a block or two apart, swapped them a couple of years ago for equal money ($1M) and then listed the hazeltine house for sale at $3M (according to zillow) but sold it three months later for $400K back to the previous owner and bought back the princeville house for $250K (i.e. they swapped houses again 2 years later) and then the princeville house went into foreclosure and is now for sale for $500K.

I'm looking at those series of transactions and it just seems like something funny was going on. Can anyone suggest a plausible explanation for something like that?
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Old 07-14-2010, 05:47 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 35,668,332 times
Reputation: 2661
Quote:
Originally Posted by Kaiminani View Post
So I've been browsing some of the nice properties that have taken massive price hits due to things like ARM expirations and such and I ran across this really weird combination of sales and resales.

26 Princeville Lane, Las Vegas (unincorporated), Nevada 89113 offered for $499,900 | BlockShopper Las Vegas
11 Hazeltine Lane, Las Vegas (unincorporated), Nevada 89113 | BlockShopper Las Vegas

Seems the owners of these two homes, that are only a block or two apart, swapped them a couple of years ago for equal money ($1M) and then listed the hazeltine house for sale at $3M (according to zillow) but sold it three months later for $400K back to the previous owner and bought back the princeville house for $250K (i.e. they swapped houses again 2 years later) and then the princeville house went into foreclosure and is now for sale for $500K.

I'm looking at those series of transactions and it just seems like something funny was going on. Can anyone suggest a plausible explanation for something like that?
Something was going on?
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Old 07-15-2010, 07:08 AM
 
Location: Paranoid State
13,044 posts, read 12,211,871 times
Reputation: 15790
Here's some completely made-up "facts" (can a fact be made-up?) to support part of the transaction.

Let's say you own one of the houses & I own the other.

We are at the peak of the bubble, and we each have substantial capital gains -- about $500K of cap gains. We both believe the market for housing will continue to go up & up & up, but we want to lock in our 500K of cap gains tax exclusion. But we both like the neighborhood and want to stay here.

So you sell your house to me, I sell my house to you, we take our cap gains exclusions and have a basis-step up for tax purposes. Who knows; since I'm making all this up out of thin air, maybe we each have significant tax losses we plan to use against even higher cap gains on real-estate.

Then a funny thing happens. The housing bubble bursts. Oh poop. Poop, poop, poop.

It turns out we have side-agreements (whoops -- if the IRS finds out, then these are not true arms-length transactions and that 500K cap gains) to unwind these transactions if need be.. and the need arises, and then it all just goes to the theological place of eternal punishment.
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Old 07-15-2010, 09:48 AM
 
3,588 posts, read 4,566,789 times
Reputation: 3140
Looks like fraud to me.
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Old 07-15-2010, 01:37 PM
 
2,038 posts, read 3,976,109 times
Reputation: 3194
Google the previous owners names and ask them.
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Old 07-15-2010, 03:07 PM
 
Location: NW Las Vegas - Lone Mountain
15,756 posts, read 35,668,332 times
Reputation: 2661
Trustee sale on Princeville was for $877,000...

Sounds like somebody cashed out...
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