Big Bear Bummers

Address: 42727 Moonridge Rd, Big Bear Lake, CA 92315

Link: https://www.redfin.com/CA/Big-Bear-Lake/42727-Moonridge-Rd-92315/home/4116792

Beds/Baths: 6 beds, 3 baths, 2,080 squares

Purchase Price (11/2021): $695,000

Asking Price: $890,000

Difference: +$195,000

Commission (5%): -$44,500

Total Gain/Loss: +$150,500

In November 2021 this numbskull paid $695,000 for this triplex, and a year and a half later tried to get a jaw-dropping $1,100,000. 

Amazingly, they actually found a realtor willing to enter that stupid, greed-soaked asking price into the MLS with a straight face.

Predictably, they didn’t find any takers. 

So in November 2023 they generously cut the price to just a million bucks. Guaranteed to fire up a bidding war!

Nope.

After deafening silence from the buying public, in January 2024 they knocked the price down to $890,000 and have defiantly refused to budge ever since. And despite an absolutely insane 400+ days on the market, he has yet to change his plan of attack.

FOUR.

HUNDRED.

DAYS.

What a dunce.

The days on market can also be a reflection of the fact that the prospective buyers are limited only to those who eagerly want to be landlords. That’s a tough business and a very specific subset of buyers. And although the new owner has the option of living in one unit and renting out the other two, the people willing to do that are an even smaller sliver of the potential buyer pool.

And I’m no marketing expert but shouldn’t there be a little more effort when you’re asking someone to part with nearly $900,000?

These photos are…not great.

I particularly love the aerial shot of all the crap in that dude’s truck:

Since there aren’t many worthwhile photos, let’s see if the listing description is helpful:

“SITUATED IN CLOSE PROXIMITY TO THE SKI SLOPES, GOLF COURSE, AND ZOO, AS WELL AS RESTAURANTS, SHOPS AND OTHER AMENIITES [sic], THIS TRIPLEX PRESENTS A COMPELLING INVESTMENT PROSPECT FOR THOSE LOOKING FOR A MULTI-FAMILY INVESTMENT IN A PRIME LOCATION”

“Two of the units have undergone impressive interior updates, boasting new flooring and interior paint that breathe new life into the living spaces”

Yet there are no interior photos.

Really, you didn’t take a single photo of the “impressive interior updates” once they were completed? You can’t even scrounge up photos from when you listed the units for rent?

Foolish and lazy. A winning combination.

“Don’t miss the chance to make this triplex your next investment venture.”

At more than 400 days on market, I don’t think anyone’s in danger of missing their chance.

I know I sound like a broken record, but if this was such a great “investment venture” then why is the seller bailing out so soon? Shouldn’t they continue doing the backstroke on their piles of rental cash rather than wasting everyone’s time with a ridiculous Wishing Price?

Speaking of piles of cash, let’s crunch some numbers for the new owner:

Purchase price: $890,000

Down Payment (20%): $178,000

Monthly Payment: $6,094/mo (@7.4%)

Yowza, that’s a big monthly obligation. But those monster carrying costs will be covered by rental income, right? The seller helpfully provides us with his monthly income:

Unit #1: $1,500

Unit #2: $1,500

Unit #3: $1,100

Total: $4,100

Um, I’m no mathematician but doesn’t $4,100 fall quite a bit short of the new owner’s $6,100 monthly nut?

Annualizing things really puts it into perspective. Although the carrying costs would be $73,200 a year, the new owner will only collect $49,200 in gross income. That means eating $24,000 per year for the pleasure of being a landlord and dealing with your tenants’ problems.

Call me crazy, but aren’t investments supposed to make you money?

And those losses assume you never have a vacancy, never have any repairs, your tenants never miss a payment and your insurance never goes up. I feel like I’m taking crazy pills.

More perspective: the only way for the rental income to come close to covering the monthly PITI (Principal, Interest, Taxes and Insurance) would be if the asking price was $600,000. That’s right: this only makes sense as a rental property (one that only breaks even and makes zero profit, mind you) if the seller lowers the price by $290,000.

Keep in mind our seller paid $695,000 and he couldn’t make it work as a rental. Yet he expects you to believe you can make all your investing dreams come true by paying $890,000 – nearly 30 percent more than he paid.

The math ain’t mathin’. And now we know why it’s been rotting on the market for more than a year.