Category: Real Estate Market

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The Tale of Alta Lofts Unit 118: A Cautionary Tale for Home Sellers in Los Angeles

Quick Sale or Fully Marketed Sale?

Real estate is a bustling industry that can offer tremendous rewards, but it also comes with its fair share of pitfalls and cautionary tales. One such tale unfolds in the story of Alta Unit 118, a property located at 200 N San Fernando RD, Los Angeles. What makes this case particularly eye-opening is that the owner sold the property for significantly less than its market value, only to watch an ebuyer investor immediately flip it for a tidy profit.

In a booming market like Los Angeles, where sellers could typically gain an extra $50,000 to $100,000 by fully marketing their properties, the story of Alta Unit 118 serves as an essential lesson. This article delves into the details and aims to provide value to home sellers, buyers, renters, landlords, and investors alike.

Key Details of the Transaction

MLS Listing: OC21175051MR
Size: 1,220 square feet
Sale Price by Original Owner: $475,000
Immediate Resale Price: $549,990
Property Features: 1 Bedroom, 1 Bathroom, $450.81 per square foot
What Happened?

The original owner of Alta Unit 118 sold the property to an ebuyer for around $475,000. An ebuyer, or electronic buyer, usually represents an investment company that uses technology to make instant offers on homes. These offers are often less than market value and can be enticing to sellers looking for a quick sale.

After the purchase, the ebuyer immediately listed the property without making any improvements. Within a short period, the unit was resold for its full market value of $549,990.

The Financial Implication

A quick calculation reveals that the original owner lost out on approximately $74,990 (ignoring transaction fees and other potential costs). In a market where sellers usually make about $50,000 to $100,000 more when selling fully marketed properties, this discrepancy is substantial.

Why Sellers Need to Beware of Ebayers

Quick Sale, Less Profit
Ebuyers offer the allure of a fast transaction, but at a price. Because they’re aiming to make a profit as quickly as possible, they’ll offer less than the home’s true market value.

No Marketing Exposure
Selling to an ebuyer bypasses the traditional marketing process, which includes listing the property on multiple platforms, open houses, and bidding wars—all avenues that could increase the sale price.

Inflated Service Fees
While traditional real estate agents typically charge a commission of 5–6%, ebuyers often have service fees that can range from 6% to as high as 14%. Although it seems like a quicker process, the costs can add up.

Why Working with a Traditional Broker Matters

Market Expertise
A broker who is intimately familiar with the Los Angeles real estate landscape can provide invaluable insights into the best time to sell, price your home, and can even help you stage it for maximum appeal.

Marketing Resources
Traditional brokers often have a variety of resources at their disposal, from professional photographers and staging services to an extensive network of potential buyers. This helps in showcasing your property to a wider audience.

Negotiation Skills
A seasoned broker can effectively negotiate terms, conditions, and prices. In a market like Los Angeles, where prices are skyrocketing, having an advocate on your side can make a substantial difference in your sale price.

Lessons for Buyers, Renters, and Investors

Market Research
Doing your due diligence and market research could save you from paying over the odds for a property or help you snap up a bargain before others notice.

Property Valuation
Always get a property valuation or appraisal. This could be a life-saver, as it was in the case of the ebuyer who bought Alta Unit 118—they knew the unit was undervalued and acted swiftly.

Timing is Everything
If you’re an investor, the tale of Alta Unit 118 demonstrates the lucrative profits that can be made through timely purchases and sales.

Get More Money, Faster, with Less Hassle

The story of Alta Unit 118 serves as a sobering tale for sellers in Los Angeles. In a bustling real estate market, failing to fully market a property can result in significant financial losses. On the flip side, this case presents a valuable lesson for savvy buyers and investors about the gains that can be made through strategic investing.

By understanding the pitfalls and advantages in the real estate landscape, sellers, buyers, renters, landlords, and investors can all make more informed decisions. Always consider working with experienced professionals, like brokers and financial advisors, to guide you through the complexities of the real estate market. This could make the difference between a regrettable loss and a highly profitable sale.

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Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Broker DRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. Prices are approximate. All information provided is deemed reliable but is not guaranteed and should be independently verified. Text and photos created or modified by artificial intelligence. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.

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The Tragic Downfall of Communist China’s Real Estate Market: A Cautionary Tale for Investors

REAL ESTATE NEWS (Los Angeles, CA) — For years, the unwise mainstream media asserted that Communist China’s economy was immune to recessions due to its communist control. However, recent events are painting a much grimmer picture, proving that no economy is recession-proof, especially one that is fundamentally flawed. The downfall of China’s real estate market, exemplified by the Evergrande crisis, serves as a cautionary tale that communism is, in essence, a state of recession and corruption in an environment of constant deception. China stocks are tumbling, according to CNBC.

Evergrande Crisis: The Tip of the Iceberg

Evergrande, once China’s second-largest property developer, has faced a disastrous decline. According to Bloomberg and Business Insider, the firm’s shares have plummeted by as much as 87%, becoming a penny stock. With liabilities ballooning to around $340 billion by the end of 2022, the crisis seems to be symptomatic of larger issues in the Chinese real estate sector.

Debt, Delay, and Decline
Evergrande defaulted on its debts in 2021, which led to the suspension of its shares in March 2022. The company recently delayed a crucial debt restructuring meeting and revealed that its subsidiary, Hengda Real Estate, is under investigation. This prevented them from issuing new debt, further plummeting shares by 25%. As many as 53 Chinese developers have collapsed in recent years, further emphasizing the market’s instability.

Policy Paralysis: Beijing’s Inaction

Contrary to expectations that the Communist Party would bail out the sinking industry, Beijing has held back from extending large-scale policy support. This passive stance is a risky gamble, with wide-ranging consequences not just for China but also for global investors. As the market continues to crumble, the government’s strategy to boost consumer demand in other economic sectors appears ineffectual.

The Underlying Problem: Communism’s Faulty Foundation

The narrative that a Communist-controlled economy can’t experience a recession is deeply flawed. At its core, communism fosters an environment rife with corruption and inefficiency. The lack of market forces, coupled with state-controlled planning, has led to a bubble that was always doomed to burst. This environment of constant deception, veiled in the false security of state control, makes the communist economy essentially a state of perpetual recession.

Why Should Real Estate Investors in Los Angeles Care?

For home buyers, sellers, renters, landlords, and investors in dynamic markets like Los Angeles, the China real estate crisis offers valuable lessons. It underscores the importance of governance models, regulatory environments, and market-driven economies in assessing the long-term viability of real estate investments.

Moreover, the ripple effects of China’s real estate woes are already visible in Los Angeles. A prime example is the failed OceanWide Plaza project, which sits unfinished and vacant in Downtown Los Angeles. This “ghost building,” as it has come to be known, is eerily reminiscent of the numerous abandoned properties scattered throughout Communist China. It collects weeds instead of revenue, transforming what could have been a bustling area into a deserted lot. This serves as a tangible illustration of how a poorly governed foreign investment can impact even the most robust local markets. It’s an admonition that international economic distress can and does cross oceans to influence the real estate landscape here in Los Angeles.

Learning from China’s Real Estate Meltdown

The recent downturn in Communist China’s real estate market, exemplified by the Evergrande fiasco, is a reminder that no economy is impervious to the laws of supply and demand, or the consequences of corruption and poor governance. The crumbling of this market serves as a poignant lesson for global investors to remain cautious and diligent, especially in systems that are not as transparent or free as they claim to be.

China real estate is also diminished by un-ownable land and corrupt practices that results in cheating on building materials, known as “tofu-dreg” ( 豆腐渣工程 ) shoddy construction, which often results in rapid deterioration or collapse of many structures. In May, a building collapsed, killing 54. Just two months later, a school gymnasium caved in on a girls volleyball team, killing 11. American investors have recently been abandoning mainland China, in favor of safer bets like India and Vietnam, especially for product manufacturing.

So, whether you’re a homeowner in Los Angeles looking to invest abroad or a real estate broker eyeing international properties, tread carefully. Make sure you understand the political and economic landscape before making any significant investment moves.

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Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Broker DRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Text and photos created or modified by artificial intelligence. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.