Big Bear Bummers

Address: 42618 Peregrine Ave, Big Bear Lake, CA 92315

Realtor.com: https://www.realtor.com/realestateandhomes-detail/42618-Peregrine-Ave_Big-Bear-Lake_CA_92315_M27195-28579

Beds/Baths: 3 bed, 1 bath, 700 squares

Purchase Price (4/2023): $435,000

Asking Price: $499,000

Difference: +$64,000

Commission (5%): -$24,950

Total Gain/Loss: +$39,050

That’s not a typo – they somehow, beyond all comprehension, were able to shoehorn three bedrooms and a bathroom into just 700 square feet. Wow.

We rented a similar cabin right down the street a few years back. This is a great little Moonridge neighborhood walking distance to Dank Donuts.

Shout out to the best DD in the game!

The good news is the paltry 700 squares are really clean with nice updates including a refreshed kitchen and bathroom. 

Overall this place looks very tidy and ready for short-term rentals.

I wish I could give the seller credit for all this work, but other than this killer live-edge counter on the deck and other small details this place looks nearly identical to when they bought in April 2023.

That’s right, they purchased a little over a year ago and are already bailing out. Luckily for them, their current asking price of $499,000 just so happens to cover sales commissions and ensures they will walk away with a little gravy (like $40K) for all of their hard work.

And why shouldn’t they? That’s exactly what the two previous owners did. 

The listing history shows how easily during the frenzy you could make cash just by holding Big Bear real estate for a short time.

In March 2022 Seller A listed for $339,000 and Buyer B gladly paid $41,000 over ask ($380,000). 

Six months later in October 2022, Buyer B put it back on the market asking $475,000 so he could also waltz away with a nice, fat profit. The market told Buyer B in no uncertain terms that he is a moron, so he did tiny, meaningless cuts all winter until he got stuck at $439,000 in February 2023.

In April 2023 Buyer C (our current seller) bailed out Buyer B with a bid of $435,000, which allowed Buyer B to walk away with a profit of $37,000. Not too shabby.

Then in May of this year Buyer C tried to get his mitts on some of that easy money and listed for a ridiculous Wishing Price of $539,900 as if rates were still in the threes. To Buyer C’s credit he started cutting the price pretty quickly and has now entered a contingent sale at $499,000.

Assuming this deal goes through at full asking price, how do the numbers look for the new buyer?

Purchase price: $499,000

Down Payment: $100,000

Approx. Payment: $3,417/mo (@7.3%)

Hey, that payment’s not bad for a 700-square foot cabin.  

IT’S FREAKING TERRIBLE!

That’s an astounding $714 per square foot. Last I checked this isn’t lakefront property.

The real price per square foot is even higher because public records show this is actually a two-bedroom house and only 660 square feet. To distract from the diminutive size, the seller tried to get creative in the listing description:

“Don’t let the size fool you. Single level with 3 bedrooms and almost [emphasis mine] 700 sq ft, supplemented by a 336 square foot tranquil & private rear yard deck and a 100 square foot play house; to create over 1100 square feet of space to relax and enjoy!“

Citing an outdoor deck and converted storage shed to come up with “over 1100 square feet of space to relax and enjoy” is hilarious.

The play house is very cute though.

Although this property seems pretty dialed in, I think the new buyer is catching a falling knife by purchasing at $499,000. Because if they, like so many recent buyers, find that AirBnB isn’t as profitable as they hoped or insurance costs are higher than they assumed, they are going to have a tough time finding another sucker to bail them out a year from now.

However, the buyer is an adult and we have to hope they did their due diligence.

But I want to focus on the seller — they deserve credit for admitting their initial asking price was ridiculous and for being willing to chase the market down to find a buyer. That is uncommon these days and should be applauded.

And if this property sells for full asking price, our seller will be one of the rare 2023 buyers to avoid a substantial loss. Stay tuned.