Soon after the foreclosure sale was done, workers were on the property within two to three days giving the inside of the house some facelift – painting the walls and other mini-fixes, placing sod on the front yard. They didn’t even need to replace the sprinklers which were in working order. In a matter of days, the “lipstick” job was done.
Next, the For Sale sign went up. In less than two weeks, the new owners – a middle-aged couple – were moving in.
The guy who bought the foreclosed house said he paid $200,000 for the house – as is. He spent about $10,000 for the minor fixes. He sold the house for $250,000. He made $40,000 in less than a month – three weeks, to be exact. He told one of the neighbors this is what he’s been doing for a while – flipping foreclosed and distressed houses.
The couple who bought the house is not begrudging the house-flipper for making the 40 grand. The husband told his new neighbors he’s just glad he didn’t have to do all the facelift chores himself.
The house is one of the houses near Lathrop City Hall which sold for $600,000 to $650,000 brand new. Before the trees on the front lawns could reach maturity, the two-story McMansions turned into ghost houses during the height of the mortgage meltdown, with Lathrop as the ground zero for the foreclosure mess.
Today, none of those houses in the shadow of ancient oak trees along the San Joaquin River have any brown lawns left. They have been snapped up by new owners who bought the homes at rock-bottom prices ranging from $180,000 to $250,000 from foreclosure sales.
The flipped house that just foreclosed was not one of the first wave of distressed properties. The couple tried to save their mortgage by working with the financial institution that held their loans, but were unsuccessful.
In another neighborhood at around the same time in Manteca, a foreclosed house was being fixed – inside with fresh coat of paint, plus a new garage door opener – less than a week after the owners moved out. The workers didn’t even have to re-sod the front lawn. All they was turn the sprinklers back on to get the grass turn green again. Then they simply mowed it. In doing so, the hardscape plants – all perennials that included a Japanese maple, a night-blooming jasmine, and ferns – were also saved. The result – good-as-new curbside appeal in no time. The For Sale has been up the last few days on a corner of the regularly mown lawn.
The good news about the above flipped houses is that there was no window of opportunity for undesirable elements to take a foothold on the properties. Unfortunately, that’s what happened to the other foreclosed house not far from the second house mentioned above. The vacated house languished for months. As a result, neighbors on either side of the empty property had to call the cops every now and then because of alcohol and drug activities taking place in the back yard. The perpetrators were high school students from the nearby campus.
But all’s well that ends well. The distressed house was eventually sold about a month ago. Since that time, a number of facelifts have taken place. First, crews worked on the inside of the house. Then the front-yard landscaping followed, which is still ongoing. Then most recently, the house received a new roof.
Today, these properties’ neighborhoods are looking nice again.
According to a Wall Street Journal online article, house-flipping has been going on in the last three to four years. So the question now is: does this mean the real estate market is finally on the final steps to recovery?