Successful Flip - Everyone Wins

Address: 1024 Bay #5 - 90405

Details: 2 bed/2.5 bath 1,252 sq ft townhouse, 1988 building, $300/month HOA, "completely remodeled"

Description: 2 bed + loft, 2.5 bath townhome. Completely remodeled, light & bright, bamboo floors. Open kitchen w/ CaesarStone countertops, breakfast bar, SS appliances. Spacious living/dining area w/ fireplace. Polished concrete floors in bedrooms. Roomy master w/ sliding glass door to private patio. Master bath includes claw foot tub, marble tile. Custom vanities w/ above counter bowls in master & hall bath. Large multi-level rooftop deck w/ views. Inside laundry. Private 2-car garage. Bldg is FIOS ready.

Purchase History:
3/29/02 - $405,000
4/14/04 - $668,000
8/1/06 - $805,000
6/16/09 - $506,250 (GMAC forecloses on peak bubble buyer from 2006)
8/26/09 - $489,000 (flipper somehow buys this at a very attractive price)

Listing History: 11/20/09 - $699,000

SOLD: 2/12/10 - $676,000

This unit shows just how big the bubble was. We start with a 65% increase in just two years between 2002 and 2004. Then, to make things really nuts, we essentially double the 2002 price by 2006 where a peak bubble buyer made the poor decision to buy.

Then I would guess that the teaser rate was up and it came time to face reality and the bank (GMAC) foreclosed in mid 2009. Then, somehow, a potentially sophisticated flipper comes along and picks this townhouse up for just $489k from the bank. That comes out to something like a late 2002 price. The flipper then "totally remodeled" the place and put it on the market for what was actually a rational level.

The buyer then purchased this from the flipper paid $676k which is basically a mid 2004 price but they got all the upgrades for free. Good job by the flipper of pricing appropriately and getting it sold quickly...but how did they steal this from the bank for just $489k?!