As we first reported in January:
Closing escrow with a recorded contract price of $628,000 in February 2008, within two months 425 1st Street #1805 was listed for sale with an asking price of $719,000.
Following a series of price cuts, and at one point seeking a short sale for “$499,000,” this past August the One Rincon Hill one-bedroom was purchased on the courthouse steps for $441,886 cash.
Back on the market at $599,000 this past October, in November the list price was reduced to $579,000 and yesterday it was reduced to $559,000.
While just updated on the MLS, the sale of 425 1st Street #1805 appears to have closed escrow on 3/15/11 with a reported contract price of $535,000, effectively splitting the difference between its 2008 closing price and 2010 all cash sale on the courthouse steps.
There are currently five other condos at One Rincon Hill scheduled to hit the courthouse steps within the next five weeks and at least two other units in default.
∙ From Failed To Foreclosure Flip (And Five Others) At One Rincon Hill [SocketSite]
Nice 94K gross profit – if you can play that game.
By the time you factor in the closing costs, hoa’s and taxes I’d say the net profit was approximately 50-55K. (Not including the opportunity cost of investing 440K in cash for 6-7 months.)
A substantial return but somewhat risky. Unless of course you literally have millions of dollars in cash lying around.
There clearly is money to be made buying REOs if you have lots of cash and you are willing to accept lots of risk. This seller did fine spotting an undervalued property – about a 15% net return (assuming no maintenance/clean-up costs). For comparison, the S&P 500 was up about 22% during the same period. But there is risk in equities as well.
“effectively splitting the difference between its 2008 closing price and 2011 all cash sale on the courthouse steps.”
I believe that should be its “2010 all cash sale”.
[Editor’s Note: Good catch and since corrected.]
Let’s recall that 2307 was sold at 560k back in 2008. Whoever bought 1805 at $559k, he overpaid.
“Let’s recall that 2307 was sold at 560k back in 2008. Whoever bought 1805 at $559k, he overpaid.”
1805 never sold for $559,000. It sold for $535,000.