Dana Point REO almost 1/4 off

Here is another REO in a nice South OC area. This time, we're focusing on Dana Point, specifically the part close to the St. Regis and Monarch Beach golf course.

24301 Armada Dr, 92629
Asking price: $565,000
Asking price/ sq ft: $329
Bank purchase price: $565,000
Purchase date: 2/20/09
Size: 4 beds, 2 baths, 1,718 sq ft (built in 1974)
MLS: S565758 (1 day on Redfin)
Zillow Zestimate: $653,000
Type: Single Family Residence
Style: Ranch
Stories: 1
Lot size: 7,150 Sq. Ft.
From listing: Fabulous single level home only a few miles from the beach and Dana Point Harbor. Great floor plan with laminate floors through out. Kitchen opens to family room with cozy fireplace. Corion counters and stainless steel sink! Large private yard with mainly block wall surrounding. This is a great property with tons of potential. Two car attached garage with roll up door. Quiet interior track location. No association, no Mello ROOS, Walk to near by community park.


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We can confidently say the first thing we would do if we purchased this property is re-do the color scheme in the kitchen...yikes. Next on the list would be the backyard, particularly getting rid of the tree stump.

Homes on this street were selling well in upwards of $700,000 in 2006. Now, not so much. This property went up for sale for $735,000 in June 2008, but it came off the market not too long after. Apparently the right offer did not come.

This property probably could rent for somewhere around $2,600 per month, which would translate into a target value for an owner-occupant of about $416,000, based on a desired GRM of 160. At its current price, the home appears to be overpriced by a decent amount - at least by that metric.

The previous owner purchased the house in 2005 for $730,000. Redfin says the house had sold for $640,000 almost a year before to the day in 2004. That means the owner before that saw one-year appreciation of 14.2%. The 2005 owner used 94% financing from Provident Savings Bank. He did not pull any cash out, so the problem could have been that he simply took on too much house.

A notice of default was filed in November 2007, and the home went back to the bank this February. Assuming it sells for the full asking price, it would be $165,000 (23%) below the 2005 price and $75,000 (12%) below the 2004 price.