Seattle Bubble has moved! Redirecting...

You should be automatically redirected. If not, visit http://seattlebubble.com/blog/and update your bookmarks.

Off-topic comment? Interesting link?
Head over to the forums, or click here for open threads.

Tuesday, November 14, 2006

Spotlight: Condo Flipper in Greenwood

Found on Ziprealty.com: 633 NW 8th St, Ballard/Loyal Heights (98117)

A developer from California has purchased a 1978 six unit apartment complex and began converting to condos in June. They've been working on a unit by unit basis and appear to be close to finishing unit #201, listed 3 days ago.

There's no image posted on ziprealty, but I've posted a satellite shot here. Note the green barn-like pattern on the North face of the structure.

From Ziprealty.com:

Newbury north in greenwood is nearly complete & now selling! Beautifully appointed 2 bed 1.75 bath unit in a cozy 6 unit bldg in a great location near hip 85th & greenwood ave intersection. Stainless appliances, granite countertops, hardwood floors, fireplace, balcony, and designer paint. 10 minute commute to seattle via i-5, or take aurora ave or 15th ave. Walking distance to greenlake; a bike ride away from ballard and u.W. Don't miss out-quality at this price doesn't come along very often!
Records indicate the property was purchased on 06/23/06 for $800,000. Five of the Six units are 2 bed/1.75bt with 950 sq ft, while one unit is a 1/1 and 650 sq ft.

I drove by this unit a few weeks ago and noticed that they were installing cheap vinyl siding over the original 3-story rectangular 1978 concrete stucco. Property Shark lists the property in "average" condition and judging by what I saw, it requires a total overhaul. In addition, the building is 2 doors down from a self car wash and the overall area looks to be in general disrepair.

Let's be generous and say it'll cost $65,000 per unit, not including holding costs or realtor commissions. That would bring the cost of the project to about $1,190,000.

If the developer is able to sell all 5 units at $275,500, and the 1 bedroom unit for $229,000, that would be $1,606,500 - or a profit of $416,500. Not too shabby.

Comparable units for sale in the area:

8354 11TH Ave NW #2, 98117
$ 284,950 (reduced 10/19/06)
939 SqFt, 2bd/1bt
59 Days on Market
MLS# 26156431

8721 2ND Ave NW, 98117
$ 289,900 (reduced 10/19 - Bank Owned)
1370 SqFt, 3bd/2bt
37 Days on Market
MLS# 26169242

4102 Stone Way N, 98117
$ 229,500 (has been relisted)
Condo Conversion 1bd/1bt
Sq Footage not Shown
MLS# 26177048

On the surface it would appear that the pricing is considerably less (under $300,000) than other condos in the area. However, we're talking a conversion here and as the market tightens one could easily assume that buyers are becoming increasingly picky in their decisions. Still, I think he's got a good shot at turning a profit since these units are priced near the KC Median of $259,700. (down slightly from a high of $269,500 in August)

Questions for readers:

How much do you think the actual cost of a full renovation of this unit would be? Is NW 85th/8th Ave in Greenwood a desirable area? Are people willing to purchase a quickly thrown together conversion at these prices? Where can I find comparable units that have already sold in this area? (I'll add them to this post)

It's hip, cozy and has granite countertops! What more could anyone want?

4 comments:

Matt Rivett said...

Gawd... I forget who said it on this blog... but granite coutnertops are to the housing bubble as aero-chairs were to the tech-bubble...

Curious synthetik, did you take into accound the cost of letting 6 units stand empty for the renovation period?

Dunno, if you we're able to score $1000/month for each unit, the owner's taking a $6000/month hit by letting the complex stay empty... maybe they're kicking out renters piece-meal doing the condo-owner/renter mix, but it seems you couldn't do an adequite conversion if that were the case...

And Greenwood's pretty nasty, sidewalkless blocks just north of town, garbage cars a-go-go and a nightlife that centers around the weekly-motels just down the hill on aurora...

wreckingbull said...

It is sad to see stories like this. Sad that some well-meaning first-timer might think they need to get on the spaceship but instead end up in financial ruin.

I walked through a completely rotted-out house on 74th & 30th in Ballard. Took a tour right before it sold. The stench of rot was so strong that it almost knocked you over. A flipper bought it for 350K, spruced it up and sold it for $650K several months later.

Now on my early-morning run, I can see lights on and kiddie-toys in the yard. Sort of puts a lump in my throat thinking about the issues in store for them.

Michael said...

Now on my early-morning run, I can see lights on and kiddie-toys in the yard. Sort of puts a lump in my throat thinking about the issues in store for them.

Caveat Emptor

wreckingbull said...

Caveat Emptor

To some extent, true. Once siding and drywall go up though, not much is going to be found in an inspection.

This thing was so soggy that the inside wood trim was rotting. Since the flipper finished the basement, there was zero structural wood which could be examined.

Remember, we will all pay for this crap in the form of a massive GSE bailout.