Tuesday, December 29, 2009

78% off peak in Oxnard

128 N Harrison Ave, Oxnard, CA

This was a true bubble gem. A small house that is zoned M-1 (light industrial) purchased for $375,000 in 2005 and looks like a light remodel and then sold as a residence in early 2006 for $490,000. The loan from Homecoming Financial was for $480,000 with a $10,000 down payment coming from the seller.

It was foreclosed in October 2008 (during the financial panic) with the lender set Trustee Sale price of $433,000. Possibly set that high so that it could be valued on the books at that price (an assumption on my part). It finally sold this month for $106,000. After fees, commissions and considering opportunity cost the loss severity on this is probably in the 90%+ range.

To sell back in 2005/06 the lender probably didn't care about zoning. I'd be highly interested in seeing the appraisal done in 2006 as well. The listing agent / flipper represented both sides in the transaction and also does loans so I would not be surprised if he did the loan for the lucky borrower on this as well.

Fast forward to 2009 and the "too tight" lending. It's zoned industrial so I bet no residential lender would touch it. The person who bought it put $43,000 (40.5%) down, I bet because that is the highest LTV that banks would take for CRE. There are a lot more little details but the more I look at this gem the more I see almost every issue of the boom represented.

1 comment:

Paul said...

Looks like a good deal for an investor. Not the best area of Oxnard, but it looks like you get two or three small rentals in the back yard.