Listings as Review Comparables

[Wendy]

Awww, come on guys. Don't you watch HGTV? If you did, you'd know that a lipstick-on-a-pig rehab is guaranteed to get you a 300% return.

 

[JonGalt]

ps Jon, It is in New City/West Englewood, 54th & Winchester. Next time you are on the MLS check out the number of actives and note that all of the "rehabs" seem to be owned/marketed by the same people.

I thought it might be in that neighborhood.

A do a fair amount of review in that area including these "rehabbed" frame 1890's two flats that sell for $120k or so prior to rehab then miraculously sell for $350k after installing some siding, paint, cheapo flooring and cabinets.

Comp after comp, all in the MLS, supporting this $350k sales price....until you start noticing the same grantors, same RE agents, 1 day DOMs , etc etc etc.

But there are other similar rehabs out they that sold for way less. Remember the principal of substitution.

I've done some REO work over there and noticed the same thing. Appears like someone is trying to establish the market over there. The last REO I did over there sold as a rehab 1 year ago and was polished on the outside but the inside had not been touched in years (decades maybe?). Something fishy going on in that area.

 

[Lawrence R.]

Remember the principal of substitution.

Was that Mr. Randall, no wait, he was the substitute principal, not the principal of substitution. What a funny name for a school.

Sort of reminds me of the principle of substitution I learned at appraisal school....I don't think they had a principal, though......

 

[Scott Kibler]

The fishiness was going on over the couple years or so. It's over now as these things slide through foreclosure.

I do reviews on foreclosures and in most every case the comps used are all either REOs or have a recent Lis Pendens recording. The party is over and some of the parties involved are being heavily scrutinized by damaged institutional investors.

 

[Scott Kibler]

Was that Mr. Randall, no wait, he was the substitute principal, not the principal of substitution. What a funny name for a school.

Sort of reminds me of the principle of substitution I learned at appraisal school....I don't think they had a principal, though......

Glass houses Mr. Cost Approach.

 

[Lawrence R.]

Lol

I give as good as I get... Kudos...

 

[DTB]

Not big enough to make a market... but I've had more than a few furnaces and copper plumbing stolen in W. Englewood... before we put the dobies in at night. :blush:

 

[athome77]

I hope the water was shut off prior to being scavenged. I have been in a few REOs where the boiler and pipes were stolen, bsmt filled with water, water froze & cracked foundation. Value: land minus demolition.

 

[DTB]

Yeah water was off, it was during the rehab process.

 

[athome77]

Just e-mailed the report. Original value $365,000. Reviewer's opinion of value $175,000, assuming full renovation including all applicable permits and inspections. No more "rush" field reviews for me. Keep thinking back to that appraiser on the Sopranos who wouldn't "play ball." If I remember correctly, his measuring tape and clipboard were never the same. Hope I didn't stumble into something bigger than I realized. The "rush" stuff always make me nervous that they were hoping that the process would be so quick due dilligence would suffer.