Who would have their home sold by a group who obviously can't handle their own home tranactions properly?
From Sunday's Bakersfield Californian:
Crisp hit hard by home defaults
BY VANESSA GREGORY AND GRETCHEN WENNER,
Californian staff writers
e-mail: vgregory@bakersfield.come-mail: gwenner@bakersfield.com
A year ago, it was all about image: a Gulf Stream jet, bodyguards, a half million-dollar car, Armani suits.
Now, 27-year-old David Crisp is floating in default notices. So are family members and employees, current and former. No other local real estate agency has been hit by such a rash of defaults on large loans in recent months, a Californian survey has found.
"I will not put my head down," Crisp said Thursday. "I will not roll in the sand. There's not one day where you won't see me in the office working."
Even as Crisp celebrated his latest coup -- apparently securing tentative loan approval to build a pair of 24-story towers at CSUB -- he, his family, his business partner and his current and former employees appear to be in financial trouble.
In all, the former principals of Crisp & Cole Real Estate, close family members and staffers have received default notices on more than $11 million in loans.
Crisp, his wife, Jennifer Crisp, and his mother, Tu Crisp, have received nine default notices since mid-April. More than half of the properties in their names are in jeopardy, according to information provided by First American Real Estate Solutions.
Current and former employees of Crisp Real Estate Inc. -- formerly Crisp & Cole Real Estate -- and Tower Lending have racked up at least 10 default notices this year. One former staffer's home has been auctioned off by trustees, public records show.
Carl Cole, 59, the former chief executive of Crisp & Cole who is still involved with Crisp on the towers project, has also had problems. A default notice for a $1 million loan taken out in December 2005 appeared in county records Wednesday. Cole declined to comment Thursday.
A flurry of liens for delinquent homeowners association fees, meanwhile, cloud properties owned by Crisp and his family, Cole and some employees.
Crisp said none of his properties will be foreclosed upon. Instead, he says he'll pay off defaulted loans "one by one."
Crisp said his missed payments stem from a business decision to buy a 10,000 square-foot office building at 8800 Stockdale Highway that will eventually house the towers' sales offices.
Defaults have risen drastically in recent months -- both in Bakersfield and around the country -- but the Crisp and Cole companies are the only local real estate agencies with principals and employees hit by a rash of defaults on large loans, a Californian survey of public filings has found:
Crisp said some of his family's properties in default are home to relatives, while others are investment properties.
Still, multiple defaults aren't the norm for investors, who can make money in up and down markets, said Kevin Oliver, a local investor.
"A smart investor should be doing just fine," said Oliver who added that the market has obviously cooled.
Crisp appeared on the front page of The Sacramento Bee in 2005 by the open gull wing of a $560,000 Mercedes-Benz McClaren. He later splashed onto the front page of The Californian in front of a chartered jet. He bragged of a $50,000 watch, $10,000 suits, of building a home with an indoor basketball court.
Crisp encouraged agents to wear expensive clothes and fronted them money to drive fancy cars, he told a Californian reporter at the time.
But he never pressured employees to overextend themselves, Crisp says.
Chris Stovall, who worked at Tower Lending, a Crisp company, before leaving in 2006, said he wasn't forced to buy up.
"I can't really say if there was pressure or not," Stovall said. "I know he didn't come to me with a whip and say, 'I want you to trade in your truck and get a BMW.'"
For his part, Crisp remains confident he'll succeed.
"I've always been optimistic about what can happen," Crisp said. "The next day is a new day."
Sunday, June 03, 2007
Crisp & Cole Real Estate, close family members and staffers have received default notices on more than $11 million in loans
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33 comments:
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What an idiot.
"Crisp said some of his family's properties in default are home to relatives, while others are investment properties."
The investment is lost, daddy-o. They're not worth shit, anymore. The house of cards has collapsed.
"A smart investor should be doing just fine," said Oliver who added that the market has obviously cooled.
Who ever said this 27-year-old shit-for-brains was smart. The next paragraph tells the real story on his 'business smarts'.
Crisp appeared on the front page of The Sacramento Bee in 2005 by the open gull wing of a $560,000 Mercedes-Benz McClaren. He later splashed onto the front page of The Californian in front of a chartered jet. He bragged of a $50,000 watch, $10,000 suits, of building a home with an indoor basketball court. Crisp encouraged agents to wear expensive clothes and fronted them money to drive fancy cars, he told a Californian reporter at the time.
It was all about image; no substance. The sub-prime, easy money was his ticket. It's easy to be successful when the money is free, but now it's time to pay up. A true business person wouldn't squander money. He is the poster-child of the twenty-something-jackass-generation that wants everything easy, and feels an overwhelming sense of entitlement.
This clown is so full of shit.
Two weeks ago he didn't know about these defaults. Sounds like a sold business man to me. His excuse about not paying because of the new building, what a load of crap. You didn't pay because you don't have the $$$.
The following comment was on the previous post, I am going to copy it here:
___________________________________
Anonymous said...
I agree that it makes no sense. I used to worc for Crisp. What I can tell you is that he honestly believed that seven oaks would hit a uniform 350 to 400 per square foot. THis is why he personally purchased the homes in seven oaks. He did live in his Heaton house for well over a year. He then lived in Grimshaw for close to a year. He also did reside in New Quay. New Quay was purchased from a bankruptcy sell from a Doctor who had to let it go. That is why he bought it for 1.7 with approx 250 k down and and was able to refi it with a second mtg and pull cash out. At the time of purchase it was worth over the 1.7 million as the owner of BMW of Bakersfield was bidding against Crisp for that home. The plane that was used for the advertizing was simply prepaid lease hours. 25 hours for 250k. He never owned a jet. He leased the red ferrari and made payments on it for about a year and sold it. The 500k mercedes he made payments on for a year and a half and sold. The vehicles were in the copmany name and paid for by the copmany. Unless I am mistaken he did show a net income on taxes(as did cole) for about 975k for the year(2006). (most of which I am sure was made in the first half of the year) I believe his current plight is little more than poor management of money and ill placed confidense in the seven oaks developement and the continued strength of the bakersfield market. Anyhow, at the time that all this stuff was purchased his income was such that the debt could legitamitely be supported (albeit with little left for reserves). With the current decline in both property values as well as number of transactions in bakersfield (not to mentioned diminished public opinion) Crisps income is no dought significantly less than it weas in the first half of 2006. With that being said, running a real estate business with little to no reserves in a declining market is exactly what we see Crisp doing. Simply put, the money in is obviously less than the money out and hense the liquidation of cars and the foreclosures. Also, i know that in excess of two million was spent on architects fees, donations to cal state and other items associated with the towers project. Surely that two million would have better served the company if it were there now in reserves. From formerly knowing Crisp I can honestly say that the man was or is chasing a pipe dream in the towers, and while they are a great idea, they need to be done properly and built to the right magnitude by the right firm (i.e. an experienced one). Anyhow, i dont mean to ramble, I just hope this sheds some light on the situation.
Sat Jun 02, 09:44:00 PM PDT
I wonder if these guys think this thing will turn around in a few months. NO WAY!!
"He is the poster-child of the twenty-something-jackass-generation that wants everything easy, and feels an overwhelming sense of entitlement."
AMEN!!
"There's not one day where you won't see me in the office working."
What good will that do?
You are not selling shit right now.
Go to the office and do what? Surf the net for porn?
The picture in the newspaper that show 29 troubled properties is hilarious.
Almost all are in Seven Oaks.
Smart business sense would have been saving his profits, seeing when the market was starting to fade and moving on. Not buying into more debt, this guy is a true idiot. Sounds like a simple case of greed and an ego problem. What gets me is these types have no remorse and ruin the lives of others. 99% of these punk real estate agents are now being "served"
Its the former employee again...The bodyguards were never really body guards at all. THey were his friends from high school whom he hired. They were never "real" boiduguards and they were never needed. Crisp was never once actually worried about his life or his familys safety. He was going to hire two assistants and had the bright Idea to hire his buddies from high school and call them body guards. They used to act as assistants in that they would do his running around for him, faxing things, doing miscelaneous tasks. Most people would have just hired two admin assistants, but Crisp liked the image of the "bodyguards." He later regretted it when it backfired and people thought he actually needed them for protection because perhaps he was involved with people who caused him to fear for his safety. Just a total lack of forthought and maturity. I mean who hires their buddies from high school if they are looking for a legitamate body guard and are honestly concerned about safety? There was never any real substance to anything, people just assumed Crisp was much more than he was because he bought... no FINANCED a big house and a few cars. Anybody can do that. The real money in bakersfield 9 times out of ten drives around in a pickup truck not a ferrari.
-Crispy-
Good article thanks! Made the front page!
Ever since I've starting reading these blogs,it seems that there has been alot of David Crisp bashing going on and I'm still trying to figure out why. I mean it's one thing to talk about the subject (hence the blog) but there is alot of negativity. I personally think alot of people are jealous of the guy. Let me get this straight, I don't know this jerkoff, nor do I want to. I could give two shits about David Crisp.............but I will say this, I give the guy some credit because he has balls. If he made 975k net in the first part of 06' alone.....hell that's more money than all of you "smart" housing bubble forecaster, crap talking bloggers (no offense : ) ) will make in 15 to 20 years and people are haters because of that..................WHO CARES how he spends his money after the fact, what kinda financing he used to buy all of this shit, whether he leased or bought this cars and plane, or his gay 10,000 dollar suits. People who talk about that are just jealous regardless if he owned the shit or not. The bottom line is that took risks and made a ton of money doing it. He took advantage of this boom like every other investor did..............this is what investors and finance people do obviously and that's how they make there money.....now I know regular working people including me are bitter at guys like this because they were partially responsible for causing this boom and the manipulation of prices, fraud and all this other crap in the first place ruining it for the guy who justs wants a house for his family but....this is how the world is boys. Call is cruel or call it want you want.... that's just the facts. It's sad but people will try and make money off of any and everything....humane or not
..and all you guys are right, his inexperience and GREED got him in trouble....oh well... This happens everyday to people in the financial world, especially those willing to take big risks. Look at ole' Trump, he's had ups and downs. So he (Crisp) still accomplished something most of us will never accomplish even if only a king of a day.......so those of you that think your so smart and Crisp is a complete idiot like Casey Serin (who never made a dime).........I'd like to see you make 975K in less than years time....even if you did lose it the next day. LOL!..that's my .02 cents.
I agree it has become a little too personal. I don't know david crisp. I do feel it unfortunate that he had an opportunity to be financially independant and did not take it. I think people generally aren't jealous of him though. If I had perfect foresight I would wish never to have known money than to have known it for a season. I implore everyone here to always read--reading is fundamental as they say. All david had to do is realize that the fundamental drivers of the Bakersfield market and see the trend wasn't sustainable. Incomes do not support median prices and speculators artificially increase demand in housing. Bakersfield logistically should not be a bedroom community to la. But instead he was blinded by greed and he did manipulate his way into Bakersfield's landscape. He does deserve the outcome of his lies.
Bakersfield Bubble and I having been calling BS on this snake for years. We both knew that success or no there wasn't enough money in the things he was doing to support his lifestyle.
Comment by Robert Cote
2006-06-15 15:48:12
Unfamiliar Turf? Uncharted Territory. We really never have been here before. There are parallels to be sure but nothing can prepare for the things that are going to be different this time. When David Crisp goes Barry Mankow on the Bakersfield housing market ZZZZBest will look like a small carpet stain.
Comment by crispy&cole
2006-06-15 15:59:23
Are you telling me you didn’t put a deposit on one of the 31 story condos??
Comment by Robert Cote
2006-06-15 20:12:27
the kind of “deposits” I’m thinking of leaving for David Crispy involve doorsteps and flaming paper bags.
Comment by Rainman18
2006-06-15 17:34:01
A ZZZZBest reference…nicely done Mr. Cote.
Reply to this comment
Comment by Robert Cote
2006-06-15 18:01:09
You must be at least 40 to get the reference. And a mea culpa; Bary Minkow for people doing a google search.
Notice how David Crisp feels the need for bodyguards? Same thing happened with Minkow.
Comment by Rainman18
2006-06-15 18:06:21
I was pretty young then, the reason I know about it is that I knew the LA Organized Crime Division Cop that single handedly infiltrated the Mob and brought that whole thing down. He had some good stories.
Comment by crispy&cole
2006-06-15 18:43:27
I think this story will play out very quicly. I know some associates of him who have been involved as Straw Buyers on some of his deals. If the FBI reads these blogs I will deny it. LOL.
Comment by DAVID
2006-06-15 19:57:09
These things are tied to the price. If the price goes down everything will come apart. Same thing with Enron, when the stock fell the truth came out.
In response to rrastronomo,
Your right. I would have thought that Crisp would have known when when to tighten the belt and play it safe but like I said it's because of his inexperience and greed that got him in trouble. young and dumb I guess?........or maybe to overly aggressive? Who really knows what the guy was or is thinking. Oh well.....it's a big lesson learned for Crisp................I look at it like gambling if your on a hot streak, it's hard to walk away for some people until it's to late......temptation man..
young and dumb I guess?........
What about his business partner? Young and dumb works for Crisp, but what do we say about Cole. Greed runs through all ages, young old, they both are full of shit. Then again most realtors are. Never ask a barber if you need a hair cut, never ask a banker if you need a CD, and never ask realtor if it is a good time to buy a house. Both of these guys are realtawhores, nothing more nothing less.
""What I can tell you is that he honestly believed that seven oaks would hit a uniform 350 to 400 per square foot. THis is why he personally purchased the homes in seven oaks.""
If prices in Seven Oaks would have rose to $400 per square foot, what would have this meant for the working class people of Bakersfield. I know, $300 a square foot for the rest of city. Take a 1200 sf home and thats $360.000. Did this ass think about that, hell no. It was all about the money and he was fueling the liar loan frenzy. This punk is now getting a mouth full of his own shit.
No I'm wrong, the smaller homes sell for approx $50-$75 more than the larger homes. Lets try $475 per square foot.
bwaahahahaha funny stuff.
And fifty7, it doesn't take "balls" to invest when you're dumb enough to think it's a sure thing. It's just stupidity.
Your similarly wrong about attributing criticisms to "jealousy". It was obvious from the beginning that he would lose all the money he made and more, so jealousy is hardly necessary nor appropriate.
People generally dislike arrogance, and especially dislike the stupid and arrogant. That's it.
There never was any jealousy. More a case of fuming over some ass driving 90mph in heavy traffic and getting away with it.
"And fifty7, it doesn't take "balls" to invest when you're dumb enough to think it's a sure thing. It's just stupidity."
I disagree. I'll state the obvious just for you. All investing has a certian level of risk. More risk, more reward. Investing heavily in a "bubble" market is high risk but so is the level of return. ...it's gambling in my book and that takes balls! The people who make it big in life are the ones are willing to take all the risks and have alot to lose..........whether it be investing, venturing out on your own to start your own company, etc.......so you think this is "stupidity"?
The wealthest or in better terms the most "well off" people I know took big risks and alot of hard work to get where they are at today........and people fail all the time trying.
No matter how stupid you think Crisp is, I highly doubt he thought that is was going to last forever..........he just didn't think it was going to end when it did.
.....and I find it funny you are so concerned about him being arrogant..who gives a *#%@!!.......arrogance is all around you dude....this is California and we think we are better than everyone else! LOL! Your problem is your bored and need to get off the computer find something to do!
Looks like he single handedly pushed the reset button in Bakersfield. Real Estate Bubble and air escaping in Bakersfield,
Crisp will be a Legend in this town
-fifty7- I agree with you that he has guts and gumption and willing to take big risks for the hope of big rewards. And of course there's the jealous factor. A strange thing about Americans is that most of us want to BE rich & successful, but when we aren't we like to bash the rich and demand that they spread the wealth around. Nothing wrong with Crisp (or anyone) taking big gambles if they are the only loser but Crisp is bringing down a lot of bystanders with him, like the other owners around his defaulted properties, for a few. Do you defend what the people at Enron did because they had "balls" and took big risks? And historically, how about Milken? Bringing down the S&L's and wiping out peoples life savings because he has balls, too. Is Crisp & Cole ok with you just because it is smaller scale than those debacles? Did you know that Crisp's mother was a victim of human trafficking and had a husband who ended up in jail so that she had to raise all those kids on her own? It's justified that she is "rewarded" with property in default and now has to suffer the shame & indignity of getting her name dragged into this because the guy is a risk taker?
"Also, i know that in excess of two million was spent on architects fees, DONATIONS TO CAL STATE and other items associated with the towers project." Emphasis mine. Not surprising the project was accepted.
Jealousy?
No, it's more like pissed off, as NO ONE in this town was more responsible for fueling the speculative real estate bubble in Bakersfield, besides this guy. All it takes is a small team of an agent, an appraiser, and a broker, to fuel the speculative run-up.
And NO ONE has profited more from the bubble than Crisp and Cole (and it's another matter that the guy squandered alot of the $$$ in the interval: poor financial management skills is NOT a desirable trait in a real estate clerk!).
Crisp is someone who believed he crossed the diamond with the pearl, when all he's done is make alot of money via shameless self-promotion, posing as an 'expert' in a market which truly WAS a 'can't miss' proposition.
Like Casey Serin, he was seduced by his early successes, and heavily leveraged deeper and deeper into residental real estate as a result; that's not investing, it's being a 'one-trick' pony.
All was good until the market slowed to it's current quagmire.
Like Casey, Crisp was too foolish to look around and ask what the 'smart investors' (e.g. Kawasaki) were doing, for example, Kawasaki announced that he was liquidating much of HIS residental real estate 'investments' back in 2005, a time well before when Casey and Crisp were getting deeper and deeper into leveraging their "empires"....
No, the fools were the ones who failed to recognize when to fold their hands and walk away from the game, before the final act occurred.
The wealthest or in better terms the most "well off" people I know took big risks and alot of hard work to get where they are at today........and people fail all the time trying.
That's BS.
"Smart money" NEVER takes unnecessary, uncalculated risks; if anyone claims to have been surprised by the bursting bubble in 2007, then they're an idiot. They had NO idea of how real estate market cycles operate.
Most everyone over the age of 40 who has lived in California has witnessed no less than THREE real estate run-ups/recessions in the last 30 years; they can't say such cycles don't exist, as they've lived thru THREE such cycles (although every real estate "pro" denies bubbles, it seems; guys like Kiwosaki admits that he LOVES bubbles, as that's when he makes his money).
The amazing thing is people like Crisp seemed to have drank their own Kool-Aid, or had the arrogance to think "it's different this time". Apparently Crisp was repeatedly warned about the bubble, but it seems he had the hubris to think he was different, and could time it better than you and I: if so, he swalowed his own P.R.
'Smart money' has always known that the housing run-up WAS the result of a bubble, and it wasn't a question of IF the cycle would revert, but WHEN it would turn.
Any smart "investor" pulled out of the market back in 2005-2006, and anyone who calls themselves an "investor" was generally NOT buying in 2007. I know guys who've been operating successfully for 40 years in property management and RE investing, and view rookies like Crisp and Serin as the "greater fools" they dream about locating, as the bag holders who pay top dollar at market peak that allow them to bail until the next cycle.
Just like the current stock market run-up is surging to bubble proportions, most professional investors know the party won't go on forever: they're watching for signals that indicate it's time to bail out and pull the rip-cord.
It comes down to when market participants start to realize that the party can't go on all night, and that prices always revert to norms. But until the time comes, there's alot of money to be made by gambling, whether on Wall Street or Main Street. Smart investors can make money in an up market, or a down market.
FWIW, Warren Buffett does NOT take stupid risks: he has been quoted as saying the reason he's been successful as he has is because he doesn't get greedy, but liquidates earlier than the greedy pigs who try to perfectly time their exits but instead get caught in the rush to the exits. As they say, pigs get slaughtered....
If any of these geniuses had taken an Economics 101 course at a Junior College (or even, dare I say, CSUB?), they'd have learned this most basic concept, which reflects element of human psychology, AKA market frenzy.
Not only was David Crisp uneducated, he perpetuated the frenzy, adding to the "get rich quick thru real estate" scam. He was so self-deluded to think he's bigger than the current market cycles, and could buy into a declining market. No common sense, at all...
Maybe he can BS and impress the local yokels with this supposed $1.8 Bil L.O.C. from these unnamed UAE investors, but the reality is the guy is a shyster, a Slick Willy, a Shuck and Jiver.
Being a failing real estate clerk in a down market does NOT qualify one to become a developer (!) of major projects!
WTF is going on with the CSUB Board of Trustees, if they're falling for this guy's nonsense? How embarrassing for CSUB? What a laughing stock they're becoming, being associated with the likes of Crisp.
Hopefully the CSUB Board of Trustees aren't as ignorant as they appear, apparently being enchnted by the local boy selling a "bag of magic beans" to the college. At least give him an honorary degree in Economics or something. :)
This just goes to show that most people, including highly-educated ones, are VERY willing to accept lies as truth when they want to believe the lie. There's nothing more seductive than a lie we WANT to believe. Yes, that's another principle of human behavior.
Let's be clear. Crisp never was rich or successful. He put on the appearances of wealth and success. There's anger but not just at Crisp. The real anger is everyone else who couldn't add. How many $400k houses does Crisp have to broker to clear a $975k income, finance the houses and cars and jet and mom and lifestyle. It NEVER added up in even the best of times.
-Adam-
You have made some goos points here but alot of what you said I already mentioned in my post regarding fraud run ups and everything else and it pisses me off too. I never said he was a "smart" investor either.......I said he was inexperienced and greedy.........you guys are starting to put words in my mouth. Remember I feel the same way you guys do about it............and I'm not defending anybody.................i just simply said the guys has balls and made a ton of cash..........and he lost it and more cause he's an idiot I like already mentioned............you people said your mad be cause he was the main one responsible for the boom, he was fraudulant, etc., etc., blhah, blah, blah...........that's face it most everybody made out some how in this boom. If you sold and moved up you profited, if you refinanced to buy a boat or toys or whatever you profited,etc., etc. Unless you did absolutely nothing real estate wise in the last 5 or 6 years then you shouldn't even be commenting on responsibility of price run ups........Last face it everybody contributed.including investors, realtwhores, home builders, and the general public...
Rob Dawg said:
Let's be clear. Crisp never was rich or successful. He put on the appearances of wealth and success.
Yes. He admitted to being a poser, and confused his over-leveraged status with true wealth.
The fact is, though, the rules of the game had changed such that anyone who could fog a mirror could get incredibly over-leveraged in purchases, buying tons more property and assets than they had the time, skill, or ability to manage! There was a lot of "posing" going on, with people buying and acting like they're wealthy, when all they did was take out incredibly large loans to finance their extravagant lifestyles.
This big change in consumer attitude started when laws regulating credit card interest rates seemingly were invalidated (by an obscure Supreme Court ruling which allowed credit card companies to set rates as they wished), and the concept of usury and predatory lending became outdated.
We've all seen Gary Coleman on those Cashcall.com ads on T.V.: look closely at the terms they show at the end of the ad, and you'll see they disclose 100% APR! What moron would take out such a predatory loan? Apparently alot of people....
Of course, the same principle of "easy money for all" was applied to home loans, which means all the traditional rules were off, and the lending industry became essentially unregulated. Bush's free market, laissez faire principles were allowed to run unfettered.
Sequential asset bubbles became the standard, allowed (if not encouraged) to expand to massive proportions. Hell, even Greenspan earlier this year bemoaned that the sub-prime meltdown wouldn't be occcurring IF house prices only rose another 10%! Alan fanned the flames, arguably more than someone like Crisp.
As a result, even fools without a job like Casey Serin could buy 8 houses in a few months last year, and call themselves "investors".
Run that trend around the entire country, and what will THAT do to supply and demand, and hence prices? That's right: there's your recipe for a speculative bubble, with prices being set primarily by a lenders' willingness to hand out money to anyone who asks for a loan! Price wasn't the concern: getting a piece of the pie AT ANY PRICE was. Hence we had illegal immigrant field workers borrowing $750k to buy a home, being told by a real estate agent that they need to buy NOW before getting priced out forever! What nonsense.
The reality is that once you take that greedy speculative component out from the price of a home (i.e. the promise that the house will double in value every 2-3 years), people SHOULD realize that housing prices are still WAY OVER-VALUED.
Remember, the price run-up actually made SOME sense at the time, based on the fact you'd be getting an amazing ROI by buying and selling.
But now that such appreciation run-ups are guaranteed NOT to occur, and the home is 100% guaranteed TO depreciate now, how exactly do people justify the 2005 asking prices?
FWIW, the professional investor looking to acquire rental properties knows owning and maintaining rental properties is a drag, a lot of work! It's a costly proposition, unless you bought the property at a realisitic price a decade ago; the reality is the margins on buying almost any rental property in CA have made NO sense since 2002, and many property managers used the price run-up as a good time to exit the business! Bubbles come around every decade or two, and they know when to the goings good! Idiots lining up to buy, even outbidding each other (using OPM) is the time to have bailed!
In 2007, I defy ANYONE to show me any SFR in CA that 'pencils out' for positive cash flow, after the price run-up!
Reality is the failed flippers (and accidental landlords) are going to take a bath, for the most part.
As one example, I looked at a 3/2 SFR rental in Feb 2007 in the SW where the rental price was $1,050.
I went by the property the other day and saw a "for sale" sign on the yard now. Obviously the owner couldn't find a tenant, and just wants to get out, at this point.
So yet another of many failed wanna-be flippers who paid too much for the house, based on flip profit potential, but instead got trapped in a tough market, so tried to become an "accidental landlord" to help cover the monthly mortgage "nut". They failed finding a tenant (there's TONS of rentals out there, these days), so now they're trying to bail on the property by selling at a loss, before it bleeds even more of their "fake" equity run-up.
Anyone who buys now at anything close to 2006 peak prices is still doing the seller a MAJOR favor, assuming their headache and blood loss. Better be getting significant deep discounts...
People forgot that what goes up MUST come down, and people like Crisp are left holding some major baggage. Some are greedy, convinced the market WILL turn, so will ride the market to the bottom (if they don't get foreclosed on first).
Adam - fascinating reading. Hope you keep posting these insights. I just re-read a 3/29/07 story by Jenny Shearer at the Californian. For one thing, it says a 3rd tower might be added. It also says it may cost $400 million. (The projection in the proposal was $470 million). The architect is David Milazzo with assistance from Ed Vance of Las Vegas. I liked this quote: "The project is precedent-setting, Cole said, but he added project components may change. "Anything we're telling you today could change tomorrow," he said." And I had forgotten this part: "The Hilton Garden Inn has given Cole a letter of intent to plan and develop the hotel and 1,000-seat conference center.
A hotel representative did not return a call for comment Wednesday.
The eight-story hotel would be its own facility rather than situated on top of condos, Milazzo said. It's near a proposed campus baseball stadium." Hmmmm, I wonder if TBC has been able to reach anyone at Hilton for comment yet.
Anyway, if you look at CSUB's annual report 2005-2006, you see Crisp & Cole listed as contributing to the "Dean's Strategic Development Fund" whatever that is.
And finally, check out these board members: 2006-2007 Roadrunner Club Board of Directors
Courtesy: CSU Bakersfield Sports Information
Release: 11/13/2006
Executive Committee
Scott Hair - President
Robert Reed - Vice President
an Wade - Vice President
Don Crabtree - Vice President
Larry Baker - Vice President
Tony Tarango - Immediate Past President
Roger Fessler - Executive Committee Liason
Board of Directors
Ken Beurmann
Ted Blockley
Don Bynum
Bob Christolear
David Crisp
Jess Deegan
Bob Denning
Perry Eggleston
Steve Elmore
Randi Fessler
Dan Gianoutsos
Diana Gordon
Tom Gordon
Victor Green
Brandon Kennedy
Tim La Kose
Rusty Lewis
Brandon Martin
Mike Mazzei
Pat Rice
Patrick Wade
I guess it is all in who ya know.
XS10Shell wrote:
Adam - fascinating reading. Hope you keep posting these insights.
Thanks for the complement!
You might enjoy reading the opinions of some "investors" down in Dan Diego, where the greedy ones who jumped in without knowing trends are now losing their shirts (there's a guy named Jeff who ran into trouble after optimistically buying a lot of properties last year at the peak).
Funny that many are looking to "export" the boom to other cities, and that's exactly what's occuring in places like Portland/Seattle, as well as some places in the Midwest.
XS10Shell said:
I guess it is all in who ya know.
Indeed.
As Paris Hilton's lengthy jail stint (3 days?) showed, it's good to have friends and lawyers in high places who can make life a living hell for anyone who dares question their behavior, I guess! ;)
Realestate Agent Burnout in Bakersfield whats the count ?
Californian article about new construction....
http://www.bakersfield.com/hourly_news/story/161197.html
"We try to target that. I don't try to over-deliver to the market, because then that lowers my price," Petrini said.
Seems from the prices that were quoted in the article, he's doesn't follow his own formula, considering how many houses are already on the market right now....
I saw that article today. Then there was one about how people are leaving the r.e. market to go back into stocks. And the r.e. section in today's paper is so thick with so many big ads. I find the continuing building quite baffling but then I used to drive around looking at all the really huge new houses being built in Bakersfield and wondering who were these buyers and how could they afford them. Thanks to information like this blogsite, I've been enlightened quite a bit about real estate, construction and development. BTW, one time when I came on this site, there was a Google ad for McAllister Ranch. I clicked on it and the concept and marketing were extremely appealing.
Yea, everything looks awesome on paper, but I'm a little skeptical about how it will turn out. If you ever get a chance, drive by the area on Panama Lane....miles and miles of dirt moving that's been going on for some time now. With the market slowdown and builders admittance on slowing build rate to keep the price up, I think it will take a very long time to get to the utopian level of the marketing site. But if it does, great!
I know it's all hype. Pro designed golf courses are the marketing trend of the moment & I have no doubt they are only lending (selling) their names. Greg Norman & his wife are going through an ugly divorce right now. Maybe there will be some interesting revelations about how it all works.
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