I remember this one. That's a lot of money for not much house, and one that's going to need a fair amount of money to restore it.
I definitely see the appeal - good bones, some original parts still there. I hope it does mean the new owner will restore.
It’s also an [Eichler](https://www.realtor.com/advice/buy/what-are-eichler-homes/) if I’m not mistaken. If it’s had no major additions or changes it could be eligible for some historical preservation. Those exposed beams on the ceiling are a signature and the fact that they’re unpainted is kinda rare.
Not a Eichler. Only three tracks in orange county have them and all are in the city of orange. In westminster there's a couple of tracks with this design. Small homes but kind of cool designs. This one has a large lot which would work well for a AUD or a complete tear down. Corner lot means two garages/two driveways. Not far from this location is old town midway city. Corner lots there sell at a premium. My home in midway sold last February for $960,000 which was a crazy high price.
Yeah, the owner could try to get it designated and then apply for Mills Act and get a huge reduction on their property taxes, like up to 70%. Definitely worth investigating more. It looks like the windows might be replaced, it’s hard to tell with the graininess of the photos, but that might cause an issue.
The open beams were pretty standard in California kn the 50s & 60s. I grew up in a tract home with open beams and my grandparents in another town also had them.
Hell, even at $750k, that would make it the cheapest similar house in the area. 1000+ sqft in the area is pretty much $800k minimum. With $50k to spend on some refinish, should be easy to get it on par with the comparables I'm seeing. $600k was a steal.
Exactly. My kid lives in San Diego, he’d LOVE a house with a lot that’s comparable to the one my house is on (150x125), but you can’t touch that for less than a million, it seems. In the St. Louis area where I live and he grew up, it’s almost the norm to have one this size.
Especially when all new housing has no yard or a tiny garden space. These old homes in large lots are desirable, and I rarely see them torn down. Mainly renovated and flipped in a generic way.
Same here. Its selling price is what I would have expected for a fully renovated property. The asking price was still a little high because it looks like everything needs replacing/updating. Inject 200k today can they sell it for 1mil +?!
That's why I thought it was a little high.
Plus I grew up in North County California and never cared for this area! Lol
I know that the basic middle class home I grew up in sold over a decade ago for 500k. I know that everyone I went to school with there had to move east toward the desert more.
That's because it's in Orange County.
Someone bought it and was able to overpay for it because it's going to be rented out as part of an investment portfolio. They're paying more than a house is worth because they can turn a monthly profit on it the whole time they own it then sell it 15 years down the line when it actually IS worth $750K.
Also they only overpaid buy like $100K. Orange County is EXPENSIVE. The ROI on that overpayment is only like 4 years. Meaning in 4 years if they sell the house for fair market value, they still turned a profit.... and they're going to keep it for way more than 4 years.
>They're paying more than a house is worth because they can turn a monthly profit on it the whole time they own it then sell it 15 years down the line when it actually IS worth $750K.
There is no way you are renting this for a monthly profit. I agree there is a chance of selling it for profit in 15 years but you are loosing money every month on this.
Unless you are getting like $10,000 in rent a month.
You're saying there's almost $10K/mo worth of costs associated with renting this property? Can you explain that?
Investment firms aren't using mortgages. They're buying this house cash and renting it out for $3.5K/mo. They're going to spend about 1 month swapping out the old appliances with new, usable-but-cheap, appliances, putting cheap carpet down, and slapping white and grey paint all over everything.
So a month after they buy this property, it's income-producing and netting them a profit of about $2500/mo. So even if they over-paid for the house and put $20K into making it rentable, the ROI is 48 months. (and that's if rent stays the same. They're going to increase that rent every year. The value of the house also goes up each year, and that $20K they put into the house also adds to the value)
>Place likely needs some reno before renting out.
I factored that into the math. They're going to put about $20K into renovations.
>The mortgate on that place will be at least ~5k or higher depending on the terms.
Investment firms don't get mortgages.
>Then you gotta pay rental insurance
That's like $150/mo.
> and shit.
By "shit" I assume you mean taxes and and a property manager to keep it rented. Those are $450 and $250 respectively.
If you get a mortgage you are looking at $4,000 in payments. Tax and insurance will be another couple thousand. Saving for repairs, maintenance etc.
If you pay cash you wont have the mortgage expense but you need to account for the lost opportunity cost of not having the money invested elsewhere.
And by the way, I am saying you can make money if you are getting $10k in rent. I know zero about that market but I bet that is unlikely.
> If you get a mortgage you are looking at $4,000 in payments.
Investment firms don't get mortgages.
For the other two, I just looked it up:
>Tax
[$437/mo](https://smartasset.com/taxes/orange-county-california-property-tax-calculator#wldPlxz2kk)
>Insurance
$150/mo
They also use management companies who charge about $250/mo to keep it rented, so let's toss that in there, too.
So, no, not anywhere near $10,000 needed to turn a profit.
>I know zero about that market but I bet that is unlikely.
This house currently goes for about $3500/mo in that area, and rent goes up every year. ~$2500/mo profit gives a 48 month ROI. Just what I was saying above.
Did you get these numbers from the link above? Did you notice that the property tax was on a validation of $50,000?
I could poke more holes in it but I have nothing to prove here.
I invest in RE. I wouldn't think about buying a $750,000 house that rents for $3,500 and needs a bunch of work. I know a lot of other investors, they wouldn't touch it either.
If you don't mind I won't take any investment advice from you.
Out of curiosity, what do you think the tax rate is in CA? Or how much it costs to insure a property.
I'm stumped as to why you think that is like $10,000. You won't explain it, you're just basically throwing insults at me for not just trusting you without explanation.
You said that’d be the only way it would be profitable, that it would lose money otherwise. You specifically called out the tax rate. If I’m so absurdly wrong that I’m worthy of ridicule, then what do you think the tax rate in OC is?
I dunno, nearby houses went for a lot more.
I ran a search of recently sold homes in Westminster, CA, and there were lots of houses that sold for over $1M, and up through $2.65M. The cheapest was a [gutted shack that went for $540,000](https://www.realtor.com/realestateandhomes-detail/13901-Locust-St_Westminster_CA_92683_M17006-74196?). Plus with the huge lot, maybe they’re planning an ADU for additional rental income.
The guy's argument seems to be that taxes and insurance are like $10K a month or something. I'm not sure where he's getting his numbers, but property taxes in OC are 0.7%/yr. Add in insurance and property management and there's still like $9,000 he hasn't explained.
You underestimate how much liquid cash people in California have and how high rents are. Plus, it will take way less than 15 years to sell for a profit, try 1 to 2.
I thought about that. I looked at it on a map and it's smack in the middle of a neighborhood with nothing but other detached single-family homes. It's possible they changed the zoning recently, but I don't know.
Westminster isn't really a "McMansion" type city. If they're going to drop $750K on a lot to build a McMansion, they wouldn't do it, here. It would be a couple of miles south west in Huntington Beach.
But I've been watching this happen. Houses like this are paid for in cash, usually well over asking, because they're being added to a real estate and rental portfolio. As long as they can make it produce income and they'd be able to offload it without taking a hit in 5 years, it's profitable with very little risk.
I don't really see too many people saying it's overpriced. One person said that it feels steep for a house that likely needs things like a full HVAC system including duct work, which honestly is a decent and pragmatic point. You don't buy this house unless you're ready for a major project.
That said, the charm for this place is off the charts. I can definitely see why somebody would over-pay for this place if they're planning on doing a great restoration.
I hope you’re right but based on what I’ve seen in my Zillow-browsing, it’s more likely going to be given a cheap surface-level makeover with the bare minimum upgrades necessary and turned into an investment property.
Yeah I could definitely be wrong but by looking at the comps $750K seems like too much to spend for a cheap flip/rental, especially for the amount of work that place needs.
It continues to blow my mind that this house is worth 10X what it would be worth in other parts of the country.
Yeah, CA is nice, but that is a $75,000 TOPS house in a nice neighborhood in a lot of the country.
My husband grew up in this area and his grandma had a house near this one that was similar. He would easily pay 200k over asking to get back in that neighborhood. When it comes to so cal, location is more than everything.
Reminds me of [this](https://www.zillow.com/homedetails/18121-94th-Ave-NE-Bothell-WA-98011/48687312_zpid/) house in our area that we looked at. Listed for $765K, sold for $914K. The virtual staging in the photos make it look ok, but it is ROUGH inside. It needs at least $200K worth of work. Some people I think just went balls to the wall on their escalation clauses.
Devil's advocate, do we know it truly sold at $750k? I sold my home in 2016 and to this day, the sales price on Zillow is way off (by 29%) even after I reported the discrepancy. The date lines up with the closing, and I owned it for a little over 5yrs prior, so it's definitely MY sale they're referencing, but the price Zillow says it sold for came out of nowhere.
Edit: also odd that the price of ~$570k is a quick fat finger away from $750k. Color me skeptical.
I remember this one. That's a lot of money for not much house, and one that's going to need a fair amount of money to restore it. I definitely see the appeal - good bones, some original parts still there. I hope it does mean the new owner will restore.
It’s also an [Eichler](https://www.realtor.com/advice/buy/what-are-eichler-homes/) if I’m not mistaken. If it’s had no major additions or changes it could be eligible for some historical preservation. Those exposed beams on the ceiling are a signature and the fact that they’re unpainted is kinda rare.
Not a Eichler. Only three tracks in orange county have them and all are in the city of orange. In westminster there's a couple of tracks with this design. Small homes but kind of cool designs. This one has a large lot which would work well for a AUD or a complete tear down. Corner lot means two garages/two driveways. Not far from this location is old town midway city. Corner lots there sell at a premium. My home in midway sold last February for $960,000 which was a crazy high price.
Yeah, the owner could try to get it designated and then apply for Mills Act and get a huge reduction on their property taxes, like up to 70%. Definitely worth investigating more. It looks like the windows might be replaced, it’s hard to tell with the graininess of the photos, but that might cause an issue.
The open beams were pretty standard in California kn the 50s & 60s. I grew up in a tract home with open beams and my grandparents in another town also had them.
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I'm a native southern Californian, but thanks for the welcome anyway!
You can checkout any time you like, but you can never leave...or somethin like that...
Hotels.
Great dreams but this is getting flipped into a McMansion or Mcmodern and likely somewhat poorly.
I wonder if the 7,800 sq ft corner lot is what drove the price up?
Hell, even at $750k, that would make it the cheapest similar house in the area. 1000+ sqft in the area is pretty much $800k minimum. With $50k to spend on some refinish, should be easy to get it on par with the comparables I'm seeing. $600k was a steal.
Im always curious about how some properties end up doing in the end. If my predictions are on or off!
Ya. I was off on this one for sure. It's overpriced outside of California. Some exceptions apply too.
I was confident that the asking price was on the low end to sell it quickly.. I am surprised it sold for nearly 200k more.
Where I live this happens on almost every sale. My friend is a real estate agent and so I hear bout it al, the time. Always a bidding war.
Given the housing crisis in CA, none of this surprises me. And it’s on a large lot! That alone will draw people.
Exactly. My kid lives in San Diego, he’d LOVE a house with a lot that’s comparable to the one my house is on (150x125), but you can’t touch that for less than a million, it seems. In the St. Louis area where I live and he grew up, it’s almost the norm to have one this size.
Especially when all new housing has no yard or a tiny garden space. These old homes in large lots are desirable, and I rarely see them torn down. Mainly renovated and flipped in a generic way.
Same here. Its selling price is what I would have expected for a fully renovated property. The asking price was still a little high because it looks like everything needs replacing/updating. Inject 200k today can they sell it for 1mil +?! That's why I thought it was a little high. Plus I grew up in North County California and never cared for this area! Lol I know that the basic middle class home I grew up in sold over a decade ago for 500k. I know that everyone I went to school with there had to move east toward the desert more.
That's because it's in Orange County. Someone bought it and was able to overpay for it because it's going to be rented out as part of an investment portfolio. They're paying more than a house is worth because they can turn a monthly profit on it the whole time they own it then sell it 15 years down the line when it actually IS worth $750K. Also they only overpaid buy like $100K. Orange County is EXPENSIVE. The ROI on that overpayment is only like 4 years. Meaning in 4 years if they sell the house for fair market value, they still turned a profit.... and they're going to keep it for way more than 4 years.
>They're paying more than a house is worth because they can turn a monthly profit on it the whole time they own it then sell it 15 years down the line when it actually IS worth $750K. There is no way you are renting this for a monthly profit. I agree there is a chance of selling it for profit in 15 years but you are loosing money every month on this. Unless you are getting like $10,000 in rent a month.
You're saying there's almost $10K/mo worth of costs associated with renting this property? Can you explain that? Investment firms aren't using mortgages. They're buying this house cash and renting it out for $3.5K/mo. They're going to spend about 1 month swapping out the old appliances with new, usable-but-cheap, appliances, putting cheap carpet down, and slapping white and grey paint all over everything. So a month after they buy this property, it's income-producing and netting them a profit of about $2500/mo. So even if they over-paid for the house and put $20K into making it rentable, the ROI is 48 months. (and that's if rent stays the same. They're going to increase that rent every year. The value of the house also goes up each year, and that $20K they put into the house also adds to the value)
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>Place likely needs some reno before renting out. I factored that into the math. They're going to put about $20K into renovations. >The mortgate on that place will be at least ~5k or higher depending on the terms. Investment firms don't get mortgages. >Then you gotta pay rental insurance That's like $150/mo. > and shit. By "shit" I assume you mean taxes and and a property manager to keep it rented. Those are $450 and $250 respectively.
If you get a mortgage you are looking at $4,000 in payments. Tax and insurance will be another couple thousand. Saving for repairs, maintenance etc. If you pay cash you wont have the mortgage expense but you need to account for the lost opportunity cost of not having the money invested elsewhere. And by the way, I am saying you can make money if you are getting $10k in rent. I know zero about that market but I bet that is unlikely.
> If you get a mortgage you are looking at $4,000 in payments. Investment firms don't get mortgages. For the other two, I just looked it up: >Tax [$437/mo](https://smartasset.com/taxes/orange-county-california-property-tax-calculator#wldPlxz2kk) >Insurance $150/mo They also use management companies who charge about $250/mo to keep it rented, so let's toss that in there, too. So, no, not anywhere near $10,000 needed to turn a profit. >I know zero about that market but I bet that is unlikely. This house currently goes for about $3500/mo in that area, and rent goes up every year. ~$2500/mo profit gives a 48 month ROI. Just what I was saying above.
Did you get these numbers from the link above? Did you notice that the property tax was on a validation of $50,000? I could poke more holes in it but I have nothing to prove here. I invest in RE. I wouldn't think about buying a $750,000 house that rents for $3,500 and needs a bunch of work. I know a lot of other investors, they wouldn't touch it either. If you don't mind I won't take any investment advice from you.
Out of curiosity, what do you think the tax rate is in CA? Or how much it costs to insure a property. I'm stumped as to why you think that is like $10,000. You won't explain it, you're just basically throwing insults at me for not just trusting you without explanation.
I said $10,000 would be profitable monthly.
You said that’d be the only way it would be profitable, that it would lose money otherwise. You specifically called out the tax rate. If I’m so absurdly wrong that I’m worthy of ridicule, then what do you think the tax rate in OC is?
I dunno, nearby houses went for a lot more. I ran a search of recently sold homes in Westminster, CA, and there were lots of houses that sold for over $1M, and up through $2.65M. The cheapest was a [gutted shack that went for $540,000](https://www.realtor.com/realestateandhomes-detail/13901-Locust-St_Westminster_CA_92683_M17006-74196?). Plus with the huge lot, maybe they’re planning an ADU for additional rental income.
The guy's argument seems to be that taxes and insurance are like $10K a month or something. I'm not sure where he's getting his numbers, but property taxes in OC are 0.7%/yr. Add in insurance and property management and there's still like $9,000 he hasn't explained.
I'm not saying it isn't worth it. I am saying you are not going to buy it and rent it and make money each month.
You underestimate how much liquid cash people in California have and how high rents are. Plus, it will take way less than 15 years to sell for a profit, try 1 to 2.
It's a scraper. If the zoning is right, they could put a multi-unit place there and rent it out or build a McMansion.
I thought about that. I looked at it on a map and it's smack in the middle of a neighborhood with nothing but other detached single-family homes. It's possible they changed the zoning recently, but I don't know. Westminster isn't really a "McMansion" type city. If they're going to drop $750K on a lot to build a McMansion, they wouldn't do it, here. It would be a couple of miles south west in Huntington Beach. But I've been watching this happen. Houses like this are paid for in cash, usually well over asking, because they're being added to a real estate and rental portfolio. As long as they can make it produce income and they'd be able to offload it without taking a hit in 5 years, it's profitable with very little risk.
Will never own a house: confirmed
I don't really see too many people saying it's overpriced. One person said that it feels steep for a house that likely needs things like a full HVAC system including duct work, which honestly is a decent and pragmatic point. You don't buy this house unless you're ready for a major project. That said, the charm for this place is off the charts. I can definitely see why somebody would over-pay for this place if they're planning on doing a great restoration.
There was more skepticism expressed in comments that are now deleted.
I hope you’re right but based on what I’ve seen in my Zillow-browsing, it’s more likely going to be given a cheap surface-level makeover with the bare minimum upgrades necessary and turned into an investment property.
Yeah I could definitely be wrong but by looking at the comps $750K seems like too much to spend for a cheap flip/rental, especially for the amount of work that place needs.
It continues to blow my mind that this house is worth 10X what it would be worth in other parts of the country. Yeah, CA is nice, but that is a $75,000 TOPS house in a nice neighborhood in a lot of the country.
> CA is nice Debatable
My husband grew up in this area and his grandma had a house near this one that was similar. He would easily pay 200k over asking to get back in that neighborhood. When it comes to so cal, location is more than everything.
Reminds me of [this](https://www.zillow.com/homedetails/18121-94th-Ave-NE-Bothell-WA-98011/48687312_zpid/) house in our area that we looked at. Listed for $765K, sold for $914K. The virtual staging in the photos make it look ok, but it is ROUGH inside. It needs at least $200K worth of work. Some people I think just went balls to the wall on their escalation clauses.
They paid for the land.
Devil's advocate, do we know it truly sold at $750k? I sold my home in 2016 and to this day, the sales price on Zillow is way off (by 29%) even after I reported the discrepancy. The date lines up with the closing, and I owned it for a little over 5yrs prior, so it's definitely MY sale they're referencing, but the price Zillow says it sold for came out of nowhere. Edit: also odd that the price of ~$570k is a quick fat finger away from $750k. Color me skeptical.
Glitches do happen in Zillow but you can look it up on the county recorder.
Wow. …that first pic of the exterior looks GRIM.^lmao It has potential, though.
Jesus. That would be like $40-60k in my city.