Unlikely rental
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Unlikely rental (by Cee [CA]) Jun 12, 2019 7:59 PM
       Unlikely rental (by Vee [OH]) Jun 12, 2019 8:07 PM
       Unlikely rental (by Gene [OH]) Jun 12, 2019 8:59 PM
       Unlikely rental (by plenty [MO]) Jun 12, 2019 9:08 PM
       Unlikely rental (by Richard [MI]) Jun 12, 2019 9:46 PM
       Unlikely rental (by Landlord ofthe Flies [TX]) Jun 12, 2019 11:11 PM
       Unlikely rental (by fred [CA]) Jun 12, 2019 11:17 PM
       Unlikely rental (by Still Learning [NH]) Jun 13, 2019 7:30 AM
       Unlikely rental (by Nicole [PA]) Jun 13, 2019 11:14 AM
       Unlikely rental (by Oregon Woodsmoke [ID]) Jun 13, 2019 11:25 AM
       Unlikely rental (by Salernitana [CA]) Jun 13, 2019 5:29 PM

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Unlikely rental (by Cee [CA]) Posted on: Jun 12, 2019 7:59 PM

Recently one of our elderly neighbors had to move to a senior care facility. Her 3 bd 1 ba 1210 sq ft house was sold off-market to her next-door neighbor for...wait for it...

$1.58 million

My spouse talked to the next-door neighbors (who were known to be flippers in a previous life) and asked what they planned to do with the house, which had had one owner since it was new in 1950. "We're going to rent it out," they said.

They might get $4,000/mo for it. It has an enormous back yard but the house badly needs updating.

Does this make any sense as a flip? An investment? I can't quite wrap my mind around it. This is in Silicon Valley.


Unlikely rental (by Vee [OH]) Posted on: Jun 12, 2019 8:07 PM

A fool and his money are soon parted, 34 years to recoup - if nothing major goes wrong, this will be interesting to watch... --76.188.xxx.xx

Unlikely rental (by Gene [OH]) Posted on: Jun 12, 2019 8:59 PM

It might be that they didn't need the money and wanted to make sure they controlled the property and therefore they control who their neighbor(s) will be. I wish I would have done that for the one house next to me, but I didn't have the spare money. --99.165.xx.xxx

Unlikely rental (by plenty [MO]) Posted on: Jun 12, 2019 9:08 PM

Makes no sense to me as my market is sooo different! Buyers offen tell neighbors what they want to hear and avoid talking about their business plans for a property. --99.203.xx.xxx

Unlikely rental (by Richard [MI]) Posted on: Jun 12, 2019 9:46 PM

Places in highly desireable areas have always sold at well over what rent will support.

People who buy in these cases are gambling that prices will continue to go up --- a lot.

Most times they are right but sometimes a correction happens and they lose money. However, those areas tend to recover first and usually go to even higher levels.

As an example: I lived in Santa Barbara,CA during the 80's. A simple tract house of about 1200 Square feet started at near 38K around 1980 and went to 325K by 1989 in my area, At that point I sold out all of them I had, retired at 39 and moved to the islands, Today, you could not touch one for 1.5 million each. Many houses that were "next step move up houses" of about 2000 square feet are at 2.5 million. Custom houses and ones on the beach, well-- name a price -- 10-50 million+.

Silicon valley today has crazy prices like this. As long as there are tech millionaires, I predict prices will keep climbing.

I read recently that workers there making "only 110-125K a year have to live in their cars because they are priced out of the rental market. Ouch! --71.10.xx.xxx

Unlikely rental (by Landlord ofthe Flies [TX]) Posted on: Jun 12, 2019 11:11 PM

Spending $1.58M to have control of your neighbors? A wall is much cheaper. Bad time to buy in Silicon Valley with the tech companies getting such bad press for all their censoring differing political opinions, and San Fran turning into a disease ridden, druggy oasis that's filled to the brim with poop and spent needles.

Can't see the market going up much more in value with all those amenities. --108.69.xxx.xxx

Unlikely rental (by fred [CA]) Posted on: Jun 12, 2019 11:17 PM

Maybe they are gambling on Silicone Valley prices to keep going up, even when "everything going up must come down". --99.59.x.xxx

Unlikely rental (by Still Learning [NH]) Posted on: Jun 13, 2019 7:30 AM

Was just listening to NPR and I think they said 30% of the flips in that area were losing money. Maybe they are trying a new strategy, speculating on the market continuing to rise, have a family member that needs a place to live or need the loss on their taxes? --24.61.xxx.xx

Unlikely rental (by Nicole [PA]) Posted on: Jun 13, 2019 11:14 AM

that house would go for $150,000 here ... after some updating. With many of the 1950s finishes still in place ... it would go for $120,000. --72.70.xxx.xx

Unlikely rental (by Oregon Woodsmoke [ID]) Posted on: Jun 13, 2019 11:25 AM

He'll get some income from it for a few years and then make a massive profit when he sells. Real estate is played differently in parts of California and Oregon and Washington (and probably CO)

If the back yard is enormous, they can most likely split and put a second house on it, for even bigger profit. --98.146.xxx.xxx

Unlikely rental (by Salernitana [CA]) Posted on: Jun 13, 2019 5:29 PM

It's intersting that the real-estate-savvy-ex-flipping buyers bought the house. The market in the area seems to have slipped a tad bit, and so many mega apartment complexes are being built in areas that I've visited recently such as Berkeley, Oakland, Fremont, Milpitas, Sunnyvale, and San Jose. I guess the buyers are confident that the hot rental market will hold, and best of luck to them. --107.142.xxx.xx

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