Loco "Loft" on Locust

Address: 835 Locust Ave #118, 90813
Asking Price: $555,000
Year Built: 2005
Size: 1 beds, 1 bath, 1,578 sq. ft.
$/Sq. Ft.: $352
HOA Fee: $380
Purchase price: $524,500
Purchase date: 6/2006 (nice timing!)
MLS#: P659722
On Redfin: 229 days
Down Payment: $111,000
Monthly Payment: $3,200
Income Requirement: $160,000
Description: WOW! One of only 4 lofts off of the amazing Lobby at The Temple Lofts. Enter this thoroughly modern space and enter the pages of Dwell magazine! Some of the custom features include: hi-end track and pendant lighting, custom bookshelves in living room and library, custom hardwood floor platforms in bedroom and den area, custom kitchen island with Carrerra marble top and storage, upgraded spa bathroom using Hans- Grohe fixtures and glass tiles, huge walk in shower with 4 shower heads and an extra large custom built medicine cabinet. Kitchen upgrades include: Viking fridge, range and microwave, hi-end added cabinetry, custom built pantry for additional storage space. In the dining area you will find a 'designer' built-in 'booth'...very cool! There has also been a walk-in closet added to the bedroom with an Elfa system. And maybe the best feature....a large yard-like patio...1 of only 4in the complex...very private with lots of plants and space. Check it out!

Is this idiot for real? He overpaid for this place in 2006 ($524,500), and now, three years into the worst housing crash ever witnessed by human eyes, he actually expects to get $555,000? Wait, your property is so special that it actually WENT UP in value while everyone else's dropped at least 20%?

HAHAHAHAHAHAHAHAHAHAHAHAHA!

For the last 230 days, this delusional wonder has convinced himself that he deserves to get out of this with no loss. Yep, as far as he's concerned, he won't lose a dime.

Does he realize he's on the ground floor? Does that even count as a "loft"? The dictionary definition of "loft" includes:

4. an upper story of a business building, warehouse, or factory, typically consisting of open, unpartitioned floor area.
5. such an upper story converted or adapted to any of various uses, as quarters for living, studios for artists or dancers, exhibition galleries, or theater space.

Yeah, I'm not sure you can call this a loft. Since "loft" connotes "lofty," or elevated, should we call this a "goft" to properly describe its ground-floor location?

Either way, you have to give the realtor credit for trying to put a positive spin on it with the "one of only 4 lofts off of the amazing Lobby" line, but his attempt at making this property seem "rare" because of this immense drawback is an EPIC FAIL.

If shit nobody wants makes it "rare," then I guess Gonorrhea is the four leaf clover of STDs.

I guess if you’re in a wheelchair a first floor apartment is convenient, but other than that who the hell would shell out all that scratch for a dark, dank, practically windowless ground-floor unit? How is that a selling point?

And another "rare" aspect ("1 of only 4in the complex"!), and "best feature" according to the realtor, is the "very private" patio.

How private is it? It's so private you can look right over the wall and take a few photos!

LOL!

Given these undesirable deficits, it takes a set of brass balls to ask $352 per square foot. Especially considering the going rate for sold properties is about $175 per square.

Good luck with that, buddy. Whatever this dude is smoking, he needs to hook us up with a dime bag.


Especially considering there’s some fierce competition upstairs in the form of this bank-owned property asking $299,000.

WHOOPS.

Mind you, the (much larger) bargain-priced REO (not a short sale), boldly undercutting our seller by an astounding $255,000, is still unsold after 50 days!

Our seller is doomed like a dozen donuts at Kirstie Alley's kitchen table.

On a related note, I’ve warned my readers about buying condos because the HOAs can arbitrarily levy “Special Assessments” on top of (what are usually already quite outrageous) HOA fines. Let’s say, for example, the HOA wants to repaint the building or renovate the leaky pool and it’ll run $70,000. If the HOA comes up short, it'll zap all residents with a Special Assessment. Forty residents = $1,750 each.

HOA President: "The roof needs replacing and the hallways need new carpet. The $200,000 we collected during the last 12 months won't cover it, so here is a Special Assessment for your share."

Resident: “Almost two grand?! My wife just lost her job--I don't have that kind of money!”

HOA President: “Fuck you, pay me.”

Resident: “No. It’s arbitrary and completely unfair.”

HOA President: “Fuck you, pay me.”

Resident: “No! I already shell out $400 a month to you leeches. It's not my fault you mismanaged the money.”

HOA President: “Fuck you, pay me.”

Resident: "Absolutely not."

HOA President: “Fuck you, we’re foreclosing on you.”

Does that sound fun?

Well, I just learned of “Loss Assessments.” I had never heard that term before, but apparently in situations when there is an "unexpected" shortfall in HOA funds (these days, in addition to HOA mismanagement, a big factor is the number of foreclosures and people no longer paying due to job losses), they can also slap you with a Loss Assessment.

If there are unplanned future expenses (like the plumbing system going out) or the HOA members just did a shitty job of planning, you, my friend, are screwed.
Check out this link: SIGN ON SAN DIEGO

An excerpt:

In Normal Heights, residents of an 88-unit condo conversion spent $68,000 last year on a sewage-line repair after enduring repeated sewage backups and flooding. That's in addition to the roughly $40,000 they took out of operating revenue to remove mold in four units at the 21-year-old complex.

This fall, the volunteer board overseeing a 186-unit Rancho Bernardo complex will ask fellow homeowners to finance more than $5 million in long-overdue repair projects, including painting, repaving of parking lots, new wood trim and replacement of stucco partition walls and rotted wooden arbors. Last year, the association was unable to secure majority approval for a similar proposal.

Even associations with well-heeled members, such as that of the oceanfront Surfsong condominium complex in Solana Beach, haven't escaped financial misery. Built in the mid-1970s, many of the units, with stunning, unobstructed ocean views, are valued at more than $1 million.

The 72-unit complex is in the midst of an $11 million rehab that includes new roofs, decks, railings, siding, fencing and a new sea wall. Each condo owner has been assessed more than $150,000 for the work, although the association had to foreclose on one owner who was unable to pay.

And definitely read the comments: PIGGINGTON

After absorbing all of that, is anyone still excited about buying a condo with a Homeowner's Association?

For this particular property on Locust, the construction is only a few years old so repairs shouldn't be much of an issue for a while. And as of yet there doesn't seem to be a substantial amount of loanowner distress, so not too many soon-to-be-former residents are skipping out on payments yet.

But that doesn’t provide a worry-free existence.

That’s because of the potential for a high rate of vacancy once that REO finally sells and puts the entire building severely underwater. If the underwater loft-dwellers (the real lofts, not this ground-floor nonsense) wake up and start moonwalking away from their commitments (to borrow a phrase from Dr. Housing Bubble) in droves, the remaining tenants are on the hook for any and all HOA deficits.

So, do your homework! Find out how many units are unsold in the building you're interested in, research which big repairs have been made (and which have been deferred--ESPECIALLY if the building is older, which is almost always the case with Long Beach's aging supply), and perform due diligence on the HOA, it's members, and topics of past meetings.

**If anyone has HOA tips, experiences or anecdotes, please feel free to share them in the comments.