Bay Area

[sheriff]

While searching for my new home in 2011, I discovered a condo that was just foreclosed and I thought I would take a look at it.

I was looking inside a window that I thought was going to be vacant but there was furniture inside.  The tenant came out, upset at me for looking in his window, and I apologized and told him I knew it was a foreclosure and thought it would be vacant.

He explained to me the owner had died a year ago and he had been paying rent to the owners son, who had been keeping it and never notified him the property was being foreclosed.  He he paid him for june and did not get a refund.  The property was foreclosed on 6/1/11.  At the time he was negotiating with the bank to determine how long he could stay there.

The property did not come on the market until today.  Maybe he was successful in negotiating a lease.  If so, the bank made a wise decision, get positive cash flow from the condo and selling it when they could make much more money.

The condo is priced below market, at $225,000.  There are not a lot of recent sales in the complex.  It is one of the better complexes in that area.  I think it will go for about $325,000.  Also , what do you think about the ethics of the owner, especially keeping one months rent from the tenant after the house was foreclosed?  I would have sued him.

edit; - I forgot the link

http://www.redfin.com/CA/San-Jose/5368-Borneo-Cir-95123/home/994947

[norcalnative]

I'll say this then you answer your own question.

If you owned stock in the bank that held the note on the property would you be angry if the Bank was caught selling assests at below market rate to special people?

So whats your answer to your own question?

[Kenji4861]

What will the condo sell for?  hard to say without knowing the unit.

[sheriff]

I am sorry, I forgot to put in the link.

http://www.redfin.com/CA/San-Jose/5368-Borneo-Cir-95123/home/994947

apparently they were renting it out for less than market value.

http://hotpads.com/rentals/5368-Borneo-Circle-San-Jose-CA-95123--p7svf3gw1afx#lat=37.2551111&lon=-12...

[Kenji4861]

I think you are about right, I'd guess more around $295k.

You can always email the Redfin agent.  They have told me what they thought units may sell for in the past and have been right.

[Jil]

I do not know how much this is useful to you.....My rental home (SFH) is just within 1 mile of this home, but gives me positive cash flow for few years. This year, I may even pay tax on rental income unless I add some expenses to it!

The lowest rent range is $2250(low) to $2600(high) in this area for this area home (appx 1120 sqft).

I am not estimating the price range as I am very poor on TH in this area and I do not like to mislead saying high or low!

For more info: Prices went down 40% from peak 2008 and it came up back to the normal. My rental, an REO, I paid little high in 2008 (I was not educated well enough at that time!), went down 15% and now it is appx 10% above my purchase price as per my realtor comps. Even though I planned to sell the home, I withdrew the plan recently.

Good luck

[Michelle1x]

For more info: Prices went down 40% from peak 2008 and it came up back to the normal. My rental, an REO, I paid little high in 2008 (I was not educated well enough at that time!), went down 15% and now it is appx 10% above my purchase price as per my realtor comps. Even though I planned to sell the home, I withdrew the plan recently.

Good luck

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I bought one of the first REOs in 2008 also but hard to know if I could have gotten something similar for cheaper later, because when prices did fall further you had the biddng wars.  None of that when I bought mine.  Plus the banks tightened up on rental loans which could have hurt me later on.

What I find fascinating is that some investors here consider condos and townhomes to be good investments.  I know that recently buying at bottom and flipping these this year was a big win, but for a long term property buy- I always thought to never touch those.  I guess its just a part of the gentrification that turned the bay area into a sleepy burb environment to a big city- condos become valuable.

[sheriff]

Update - They cancelled the open house, agent said they had a lot of interest in it already so no need for open house.   Offers due on Wednesday.

I also spoke with a neighbor who said he bought his during the last bubble for $470k.

[Kenji4861]

You can still visit the unit with a buyer's agent to take a look.

I would've assumed the seller's agent would still run the open house to get more interest.

Good luck.

[sheriff]

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sheriff wrote:

While searching for my new home in 2011, I discovered a condo that was just foreclosed and I thought I would take a look at it.

I was looking inside a window that I thought was going to be vacant but there was furniture inside.  The tenant came out, upset at me for looking in his window, and I apologized and told him I knew it was a foreclosure and thought it would be vacant.

He explained to me the owner had died a year ago and he had been paying rent to the owners son, who had been keeping it and never notified him the property was being foreclosed.  He he paid him for june and did not get a refund.  The property was foreclosed on 6/1/11.  At the time he was negotiating with the bank to determine how long he could stay there.

The property did not come on the market until today.  Maybe he was successful in negotiating a lease.  If so, the bank made a wise decision, get positive cash flow from the condo and selling it when they could make much more money.

The condo is priced below market, at $225,000.  There are not a lot of recent sales in the complex.  It is one of the better complexes in that area.  I think it will go for about $325,000. 

http://www.redfin.com/CA/San-Jose/5368-Borneo-Cir-95123/home/994947

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The property sold for $326,000, not $325,000.