December 17, 2007

Change Of Heart, Cash Crunch, Or A Condo Sitter Gone Crazy?

Pedini Kitchen For Sale

If you happen to be out of town and recognize this kitchen as your own, you might want to touch base with your condo sitter (or perhaps the police) posthaste. For it’s a plugged-in tipster that finds the following on Craigslist:

I have a modern kitchen by Pedini for sale. With the appliance I paid apx $55,000 for it….Its current installed in my condo. It was never used….You have to take out and install it your self. Includes all the appliances….Im located in off Vanness. Send me your offers. Please no under bidders I need it. sold asap.

We’re still working on making sense of it all (let us know if you figure it out). And perhaps there’s a much simpler explanation to be had (and let us know if you get it).

Modern Kicthen [sic] By Pedini [Craigslist]

First Published: December 17, 2007 10:40 AM

Comments from "Plugged In" Readers

I hope this is not the "sitter gone crazy" scenario. Nothing like coming home to a kitchen-less condo.

Posted by: Chung at December 17, 2007 3:02 PM

Come on, now SS is just baiting bears like me.

My guess? This is a guy who bought a condo in 2005 w/100% financing. HELOCed it out to "upgrade". Now he's facing foreclosure because he knows he can't sell without bringing money to the table. So he's stripping it out and grabbing whatever cash he can.

I actually kind of approve of his idea if that's what he's doing.

Posted by: Satchel at December 17, 2007 3:08 PM

so you approve of him buying over his head in the first place..and now trying to rip off the lending company any way he can, just to cover his ass? dork.

Posted by: urbanSF07 at December 17, 2007 3:21 PM

is that a tent set up immediately behind the kitchen?

Posted by: anne at December 17, 2007 3:27 PM

that's the tent he will be living inside after the foreclosure...

Posted by: "dave" at December 17, 2007 3:33 PM

That's the tent he's living in since he rented out the two bedrooms trying to scrape together some more cash...

Posted by: Brian at December 17, 2007 3:37 PM

Note to self: don't be drinking anything while reading SS comments :)

Actually, it's a three-season tent, so maybe he's already sold off the condo's windows...

Posted by: dub dub at December 17, 2007 4:01 PM

What a freak show it must be there. Yes indeed it looks like a circus tent. Maybe he's (owner) renting out campsites in the condo and letting everyone use the shower and bath just like when you go car camping.. I really like going camping don't you? This idea may just catch on.

Posted by: Amazan8 at December 17, 2007 4:05 PM

Or it could be that he/she has kids and the kids want to play in it. Just speaking from experience....

Posted by: anon at December 17, 2007 4:34 PM

A condo that clean with kid(s) and no use of the kitchen? Now that stretches the imagination...

Posted by: dub dub at December 17, 2007 4:39 PM

OMG, lmao @ the comments here. After a day like today at work, I enjoyed the laugh! And ... I'm with urban on this one.

Posted by: S&S at December 17, 2007 4:43 PM

Note that the kitchen was "never used" (unless he is lying). I'm with Satchel -- my bet is the guy hoped to flip this place and is now resigned to handing it back to the bank, so he's first trying to extract a bit of cash.

Posted by: Trip at December 17, 2007 5:13 PM

urban, if the lender was stupid enough to make that loan, well, I personally won't cry if they eat it in the end. Two years ago they were crawling over each other to close these sorts of deals.

I just hope it's the originator that eats it and not a Florida school district or something!

(assuming you're right, and I bet you are...)

Posted by: sb at December 17, 2007 5:14 PM

Which raises the question of how many other condos out there in the city were purchased solely for the appreciation and have never used kitchens, never used bathrooms, never used bedrooms. I guess we will shortly find out.

Posted by: diemos at December 17, 2007 5:16 PM

I may have a positive ID on the tent (via The Poop blog on SFGate). Not a lot of resale value there :-)
http://www.ikea.com/us/en/catalog/products/30073090

Posted by: EBGuy at December 17, 2007 5:21 PM

diemos,

SF Condos circa 2009 = Dark Fiber circa 2002??

Bingo. Rents will fall, not rise, guys. Sorry about that. That's what happens in a deflation. Buy now and you will be priced in forever.

Posted by: Satchel at December 17, 2007 5:42 PM

I don't feel sorry for either party, actually (the buyer or the lender). If the lender was stupid/greedy enough to have made the loan in the first place and if the buyer was stupid/greedy enough to have obtained the loan, then it's a match made in heaven, and they both deserve each other and the predicament that they've both put themselves in.

Posted by: S&S at December 17, 2007 9:22 PM

Step 1: Homeowner buys a condo near South Van Ness.

Step 2: Homeowners adds in a fabulous kitchen.

Step 3: Homeowner uses the kitchen to justify a higher appraised valuation in a cash out refi.

Step 4: Homeowner applies for that loan from the teacher's Union.

Step 5: Teacher's union doesn't give two hoots about risk: makes the loan.

Step 6: Homeowner stops making payments.

Step 7: Homeowner sells the kitchen that was used to justify the higher value, thereby taking money out, coming and going. Kitchen sold to Teachers Union at ten cents on the dollar for use at Union HQ.

Step 8: Homeowner defaults, gets Hillary-sponsored bailout in the form of forgiven taxes on the loss on the loan. Homeowner is up a couple of hundred grand.

Step 9: Teachers union bawls head off: taxes raised to compensate teachers union for loss. Teachers union is up a couple of hundred grand.

Step 10: Teachers union uses new kitchen to hold celebration dinner.

I think that just about covers it. Anything I'm missing?

Joseph Heller couldn't have made this stuff up...

Posted by: tipster at December 17, 2007 9:29 PM

I am surprised that nobody has commented on the kitchen itself....it is ugly!

Posted by: John at December 17, 2007 9:31 PM

Step 11: Repeat about 3 million times throughout the economy.

The money's gone, folks. When people wake up and realize that we have an overcapacity in everything - houses, factories producing widgets in China that no one needs or wants anymore, shopping malls and credit (well, we HAD an overcapacity of credit) - prices fall. The credit bubble deflates as the economy stairsteps downward. Last one left solvent wins.

Posted by: Satchel at December 17, 2007 10:02 PM

What does Hillary have to do with this?

Posted by: Tweety at December 18, 2007 8:43 AM

Satchel, how do you reconcile a housing-based case for domestic deflation with a global macro picture which points toward continued weakening in the dollar and rising commodity prices? Are the two contradictory?

Posted by: curious at December 18, 2007 9:11 AM

I love how in Tipster's fantasy sketch Hillary Clinton and the teacher's union take it on the chin for a scenario that was only possible because of the actions of Wall Street and the Greenspan fed.

Posted by: DavidQ at December 18, 2007 9:36 AM

Satchel it sounds like you are predicting that we are about to experience a period of sustained deflation? Seems most indicators are pointing towards stagflation as the global and US economies slow while we in the US continue to suffer from rising inflation.

Posted by: Rillion at December 18, 2007 9:45 AM

satchel, at least you are consistent. it's not just san francisco real estate that's going to fall, but we are setting up for global deflation and a recession across the board. we should all sell our houses as quickly as possible and hoard gold.

Posted by: satchel checker at December 18, 2007 10:47 AM

curious & Rillion (and John),

Thanks for the questions. I know I say lots of (deliberately) provocative things, partly because I like to bloviate pompously, but mostly because I see a genuine tragedy unfolding, in large part because the policy responses will be terrible (at best) and even deliberately designed to deprive average people of whatever small wealth they have (which mostly consists of the value of their future labor, since savings and real wealth is so negligible for most people).

For whatever reasons, some of us feel compelled to warn. I'm not the only one. Most people are compelled to ignore the warning, some because they genuinely disagree, some because they have an interest in not believing it, and some others because they simply lack the ability to understand it. I'm sure there are other reasons.

I want to write you guys a detailed response that I hope you will find helpful, and might even be helpful for others on these boards. I know that it would be helpful for me because I am working through some particularly tricky macro trading strategies, and it's always great to systematize one's thinking (BTW, that's what I do if you haven't guessed - I'm a macro trader). I've gotten some snide remarks about wasting bandwith so what I propose to do is write something up (probably long) responding to your questions in the context of what I am seeing in the markets for money/debt (which is the same thing) and real assets. I'll try to write this up tonite during Asian trading hours and post it here tomorrow morning or the day after (so I won't get the discussions too off topic).

@ satchel checker,

How cool that there is a Satchel checker! I have a lot of fun and 100% true stories regarding gold and housing, etc. that I'll share with you, and maybe you could check them? I'll post them tomorrow or the day after too, here, so if you or anyone else wants to hear them, just check back.

Posted by: Satchel at December 18, 2007 5:00 PM

Satchel, some of us enjoy the dialogue you help to bring, and appreciate that Socketsite is neutral regarding the current and future condition of the real estate market. What makes this site so enjoyable is that it is not simply a real estate cheerleader or a gloom and doom bubble blog. Instead it presents actual real market situations and developments in the city and lets readers make up their own minds. This has been very helpful for me in timing this market.

Posted by: anonsatchelreader at December 18, 2007 5:33 PM

We've promoted Satchel's response (and discussion of deflation) to a post of its own. And now back to that Pedini kitchen...

Posted by: SocketSite at December 19, 2007 10:03 AM

Very interesting post! I wish I knew the exact address so someone could look up and see if this place is going into foreclosure. If so, then my guess would be that he is definitely trying to strip the condo of any saleable assets so he can walk away with cash. Otherwise he won't have jack if he loses it to an auction or his bank. My guess is that once a unit goes to foreclosure the bank doesn't check to see if anything has been removed.

Posted by: Lori at December 19, 2007 4:12 PM

Well, it looks like we now know. Looking at the photos and location, it's obvious that this is the kitchen from 151 Alice B. Toklas Place #708.

http://www.socketsite.com/archives/2008/03/another_noncomp_comp_along_the_booming_van_ness_corrido.html

Posted by: John at April 5, 2008 8:49 PM

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