I am not talking about the foreclosure auctions on the courthouse steps, rather I am talking about the big auction houses online and offline. Last year I was the high bidder on several properties with bids under $50,000 and the banks wouldn't let me have them. That was my first clue the market was turning, or at least the banks thought they could stop the dive by not letting homes go so cheap. I don't know why they stopped taking any bid but they did, and it has been that way ever since for homes that are a FHA qualifying prices.
When you break $1 Million though, the rules are still all over the board. Family greed and squabbles do funny things at estate auctions. For probate, the courts are just telling the trustees to sell, and I am seeing some movement in those markets. Even the short sales of homes over $800,000 have seen a decrease in the average closing times. So where does that leave us today?
In Corona Del Mar California I have been watching a certain auction with a keen sense of interest. Originally the property was listed at $14 Million, then over time lowered to $9.9 Million. As an agent in the area $9.9 Million was a good starting point but it had been on the market so long the buyers just weren't interested for whatever reason.
The trustee decided to send it to Auction. The property is one of the few original ocean front homes left in Southern California that hasn't been knocked down. Walking the property I could clearly envision a new Tuscan style home featuring a subterranean garage. I started emailing all of my clients who might consider such a project. No interest at all. One said "That isn't where the money is going." Now I knew this would be interesting. That came from a pretty savvy investor.
After really walking the property, and noticing all of the little details. Details like the kitchen with the polished concrete floor still scarred by the tile squares, and the white washed wood vaulted ceiling in the master, and the 1960's style electrical light dimmers with clear switch plates, my wife looks at me and says "I could live here just like this." With the opening price of $5.5 Million, it was clearly out of this weeks budget so I knew it wasn't going to happen at this auction. I put a couple more feelers out to my friends who could write a check like this while I was admiring the view from the back yard.
My wife is always the romantic when it comes to homes and real estate. I am generally more business. Somehow I started to picture myself sitting in a wicker style chair writing my next book on the back lawn overlooking the Pacific. I wrote my first book sitting on a balcony of my Texas McMansion overlooking a lagoon pool with a tropical garden as the backdrop. How much cooler would it be to be sitting on a cliff above the Pacific writing that next book that is swirling around my head.
As I checked in this morning, the property was just approaching $6.0MM. As an investor, that is still a bargain with a lot of room to make money. As I write this there are just over 10 hours to go so I am interested to see if this is like poker and the two real bidders are waiting in the wings to make a snipe attempt at the end or if some lucky person is going to get a once in a lifetime buy on this land.
If I could just get that big advance for the next book or find a .05% interest only 5 year loan, I would buy it for $6.0MM and worry about it later, and that just isn't how I do business, there is something romantic about this property.
If you want to see it or bid on it in the next 10 hours, call me.
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