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5057 Nestle Ave., Tarzana, CA 91356


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2011 Jan 5, 7:41am   1,910 views  3 comments

by r2t   ➕follow (0)   💰tip   ignore  

Hi:

This is a house that just went on the market in my neighborhood for $620K:

http://www.redfin.com/CA/Tarzana/5057-Nestle-Ave-91356/home/4280696

Scrolling down and looking at the property history, it's clear this house was bought (in late October 2010) to be flipped.

My question is: Is this a reasonable price?

Some pros and cons to consider:

Pro

- Very nice neighborhood south of Ventura Blvd. in the San Fernando Valley.
- From the pics, they did a nice job on the inside, a complete gut and remodel.

Con

- Nice neighborhood, yes... but this house sits directly across the street from the main entrance of an elementary school (and several houses on either side have not been so nicely upgraded, sitting surrounded by dead grass and weeds).
- Having just biked by, I can attest that the picture of the front of the house is not really representative of the outside of the house to the naked eye, i.e., it looks more worn and faded in person. In other words, contrary to the redfin ad, hardly "stunning".

Just curious to hear the thoughts of those in the know!

Thanks,

Todd

P.S. I last posted about 4931 Chimineas Ave., Tarzana, CA 91356 a few months ago. It was bought at the height of the bubble (2005) for $750K. Back in September (what with all the downward turmoil in the housing market) they were of course asking for more than the bubble price! Now, the real shocker: Apparently, it didn't sell! Gasp!

P.P.S. Here is the flyer that was in front of the house:

#housing

Comments 1 - 3 of 3        Search these comments

1   sfbubblebuyer   2011 Jan 5, 7:48am  

How much does it cost to rent around there? I'm guessing 3k or less, which means it's not a good deal to buy.

2   r2t   2011 Jan 6, 2:12am  

@sfbubblebuyer:

It's a good question, and I follow the rental market around here closely (as I rent a house in the same neighborhood, just a couple streets over)...

...but there's no easy answer. Why? Because rents seem to be all over the place in the last year or so.

Some examples:

- A fairly nice remodel in the same neighborhood (though not as nice as above), about the same size, was inititally listed for $2600/month. It's been 3 months, and they still haven't found a tenant.

- More recently, a 3bed/1bath in decent shape (even further south of the boulevard, hardwood floors, etc.) was listed for $1850/month. It rented within days.

- On the low end, an older house situated on a corner lot facing a fairly trafficky street (though not a main street) was renting for the astonishingly low sum (for this neighborhood) of $1600/month! I was tempted to take this one myself, but I finally decided that the layout, condition, and street noise didn't suit me. I thought the house would rent out instantly, but it took over a month to find a tenant.

However, to finally answer your question: Yes, I believe the rent for the subject house, even after being remodeled, would be less than $3K/month.

BTW, IMO, renting may indeed be cheaper than buying in Los Angeles...

...but rents are certainly not cheap!

Todd

3   sfbubblebuyer   2011 Jan 6, 4:10am  

It sounds like the best you could expect on that house is 2500 a month, or 30k a year, so a rough 'break even' point is going to be 450k or less. Even if you get the place at 600k, that's quite a premium: 33% over break even to buy it.

For the record, I bought a house that wasn't a good deal. I calculated about a 35% premium. That was the 'keep the wife happy' premium, but at least it was down from the 93% premium they started out listing the house at.

If you don't have kids and a wife needling you to buy, I would wait.

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