Reno Flip Gone Rong – “Highly Motivated Seller.”

3955 Blenheim Street, Vancouver West Side
2,595 fin.sqft + 900 unfit.sqft 1927 SFH on 53×110 lot
Current owner paid $1,180,000 back in December 2009.
Listed for sale April 2012 $1,998,000
Listed for sale 14 Aug 2012 $1,699,000
Price reduction 26 Nov 2012 $1,599,000

Blurb extract: “ALERT!!! Investors/Contractors. Upper flat lot 53′x110′ on the Westside of Blenheim. … Easy to build a 4000 sqft mansion with a lane-way house. … New solarium extension 35′x15′ built from ground up by the Fourseasons with warranty. … Reno-permit and engineer drawings in place. Easy to show. Highly Motivated Seller.” [hat-tip 'westsidefrank'; thanks to Village Whisperer for info re past pricing]

If we weren’t locked in the jaws of a speculative mania in housing, this house would very likely still be a simple, functional bungalow going about its business.
As it is, it’s highly likely that it will now be torn down, along with all the work that has gone into what were apparently planned to be flip-renos. Misallocation of resources, again.
I suspect Froogle Scott would have some thoughts on this.
Anybody know any earlier sales history on this property?
- vreaa

21 responses to “Reno Flip Gone Rong – “Highly Motivated Seller.”

  1. It’s so sad to see these charmers go down like that. Overgrown weeds, in the front lawn, etc. only a 100k deduction so far?

  2. Being a nosy parker when it comes to things real estate, I went to one of the Opens for this house when it was on the market (2 years ago?) The house was already in bad shape. There had been a series of failed attempts at interior desecration over the years and the original layout of the home was difficult to find. The house also had a serious mold problem. It was bought by a gentleman who (I’m pretty sure) was intending to flip it. I’d often see him standing outside the house speaking with the real estate agent. Haphazard cosmetic “work” then began on the house: ugly cultured stone on the exterior front and this ill-decided “solarium” in the back. It’s doubtful anything was done about the water / mold problems. The house was put back on the market about 6 months ago. It now looks as though it’s falling down.

    • That isn’t a solarium, it is a carbuncle. I am sure the original house without the renovations looked way better than it does now. The problem with some renovations is that is it all style without substance ie. granite counters vs mundane things like drain tiles and sewer lines.

  3. What a mess. The house is 85 years old (MLS: V966980), but over the years has had any exterior ‘character’ obscured. Square footage is probably underbuilt for the lot size. My guess is that the mechanical systems are all in need of updating ($$$), as East Van suggests, but the owner has taken the lipstick-on-a-pig approach, and it’s not even a very attractive shade of lipstick. Just thinking of the business case, rather than housing stock preservation, the house is a poor choice for a reno/flip because even if the reno was completed and done well, it’s still a smallish, old house by recent West Side standards, and would be competing with much newer, nicer houses in the same price range. From a speculative standpoint, the only viable option would probably have been to tear it down, and build a new place to the maximum square footage, or renovate it so extensively that you might as well be doing a new build. And with the downturn in the market, the numbers may no longer work.

    Probably an amateur, undercapitalized flipper who had no idea what renos cost. Or, has the funds to complete the reno, but has got cold feet because of the cost of the renos so far, and the downturn in Van RE. The flipper has done the math, belatedly, and realizes it’s a losing proposition. The solarium could probably be barged to one of the Gulf Islands.

  4. This guys were trying to get out back on February 22nd of 2012 as well. Back then (according to their Craigslist ad) they were asking $2,100,000, claimed to have already spent $500,000 on reno’s and stated the house still needed another $250,000 in work.

    Back then they claimed the house could “easily sell for $2.6-$2.8 million and up once completed.”

    It would be interesting to find out what they originally paid for it and whether they are in a loss situation yet (and if so, how much of a loss).

    Betcha they know no longer believe it could easily sell for $2.6-$2.8 million once completed.

    Here is my post from February on it: http://whispersfromtheedgeoftherainforest.blogspot.ca/2012/03/wheres-ham.html

  5. Naked Official #9000

    Loyal cadres! Support, support, support the landlord!

    What is with this subject title? Your spelling is WRONG or.. Are you being disharmonious?

  6. I am sure if the westside sellers band together and refuse to reduce prices further, the market there won’t drop. LMFAO :D

    • We here all join you in your laughter about that idea, but, as I’m sure you know, there is the whole “why sell at a lower price” cult that actually believes that such a strategy is possible.

    • I think gokou3 was referring to the stunt in Richmond where a flipper asked everyone on a forum to band together and not let prices fall by refusing to list lower. I’m sure someone has the link.

      • Possibly, but the phenomenon (the thought of the phenomenon, anyway!) is much broader than that.
        We’ve heard everybody from TV talking heads to bullish commenters on the various blogs quite seriously asking “Why would any sellers drop their prices?”.

    • It is intriguing to imagine such a thing. In a neighbourhood with low enough turnover and a lot of equity on average, set up a mutual trust. Members agree not to sell below appraised and, if a buyer can’t be found at that price and a member needs to sell (death, divorce, possibly relocation) the other members would buy the property for appraised. It’s not entirely unworkable, with strict verification of ‘need to sell’ status and a fixed termination date for the trust. Cut out the cartel and do all sales privately to save a few percent, and set up a website waiting list for prospective buyers who want to move into the area. Sell spots on the list for $5,000, with right of first refusal proceeding down the list in order for any properties that become available.

      Of course if you DO manage to maintain value and every other neighbourhood in the city declines 40%, your new property tax bill ain’t going to be pretty, but that’s the cost of being rich.

  7. Did an update about this property on my blog late this morning. Advised in the comment section that the property was purchased in 2009 for $1,180,000.

  8. Well certainly anyone who is looking to buy it for lot value isn’t going to give a damn that they claim to have sunk $500,000 into the property in reno improvements. They will be lucky to get their original purchase price at this point.

  9. I’m a bit surprised, given the apparent ethnicity of the flipper, that they misjudge the buyer in that area and think they would be interested in a tarted-up oldtimer. A new build would have been what that market was looking for (a year ago).

  10. Check out http://whispersfromtheedgeoftherainforest.blogspot.ca/
    The price is (was?) justified due to “all work done by a white crew”.
    This back when it was offered at $2.1m in Feb. 2012 on Craigslist.

  11. Runforthehills99

    This would cost me $12,000 to demolish, and approximately $500K to rebuild!

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