A troubled home is sold on the North Side

  • Article by: Maya Rao , Star Tribune
  • Updated: January 27, 2014 - 2:21 PM

After a decade of rentals, fire and foreclosures, 1611 Hillside Avenue is sold again.

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swmnguyJan. 26, 14 6:49 AM

Everybody should be familiar with the Minneapolis City Property Information page, "Search By Address." I use it all the time.

My first thought in this story was, "Somebody paid $290,000 for this thing in 2005?" So I went to the city website, and the story is even worse.

This house was sold 5 times between 1997 and 2005. Here are the dates and prices: Nov 25, 1997, $50,000. Apr 20, 2001, $66,000. Aug 23, 2001, $185,000. Aug 25, 2003, $229,250. May 04, 2005, $290,000. For the past 7-1/2 years, the house has ping-ponged between various banks, while the City of Minneapolis has done what maintenance has been done, to judge by the Special Assessments levied on that property.

Not one of the listed buyers or sellers of this property has lived there. The addresses of the applicants for rental licenses have been all over the metro. This is a textbook example of what happened in the home finance bubble.

Some of those prices? Gotta wonder what happened to that house between 4/20/01 and 8/23/01. Looks like they re-did a bathroom and a kitchen, replaced the furnace and water heaters, and upgraded the electrical panel. I'd say about $35,000 worth of work, if they went top-shelf and also did some un-permitted work, like paint everything, etc. Big assumptions. But to net a $119,000 gain? I'd like to see the August buyer's appraisal.

The worst part is, we still have people repeating the lie that the bubble wasn't caused by Finance running amok; rather by forcing lenders to give mortgages to poor people. And we're re-flating the bubble; last month over 60% of house sales in Florida were all-cash. It's happening again. I just hope the new California owner of this house is not a con-man, scamming the finance system which is in term looting the bond market by dumping worthless mortgage-backed securities onto the taxpayer via the Federal Reserve.

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elle2008Jan. 26, 14 7:34 AM

swmnguy. I it is happening again. My sister is buying a house in Florida next month with cash.

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swmnguyJan. 26, 14 8:22 AM

"elle2008": The houses 2 doors up and 2 doors down from me just sold, in a pretty nice but affordable S. Mpls. neighborhood.

The one 2 doors up languished at $229,000 for months, went back off the market and had some cosmetic work done, and sold for $280,000.

The one 2 doors down was absolutely trashed by squatters, bought by a flipper for $85,000 cash, completely remodeled and sold for $285,000.

All pricing is relative of course, but the key is, can a buyer make the monthly payment? Or are they relying on the value appreciating fast enough so they can keep re-financing? That's the difference between a hot market and a bubble. If it's the houses that are the object of the buying and selling, it's a hot market. If it's the financing that's the object of the buying and selling, it's a bubble.

Overall, real estate is back in a bubble in the US. Neighborhood-to-neighborhood, it varies. In my neighborhood, the new buyers had sold their starter homes bought pre-bubble at bubble prices, used the profit to put down large down-payments to offset the bubbly price of the new house, and in effect skipped the whole bubble. I was lucky enough to do that. But these investors putting down leveraged cash...that's a recipe for trouble.

I hope your sister got a good deal and the house is sound. More important, I hope there's no title fraud in the history of the house she bought. The vast majority of Florida titles have fraud in their history. That's going to be a story for decades. Anything that ever touched "MERS" is tainted. The Mpls. city website shows a lot of gaps too; houses sold where the seller isn't the previous listed buyer, so obviously the title changed hands a couple times without being properly registered and fees not paid. Many people only think they own their homes. Ugly.

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geektopiaJan. 26, 14 9:50 AM

“My goal is to be able to help improve the neighborhood so that my property values go up, and my neighbors’ values are going to go up. … When 1611 Hillside is going to be done, it’ll be the nicest duplex” You know where I've heard that? From the LAST "investor" who owned the property. And the one before that.

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rlwr51Jan. 26, 1410:38 AM

It's a crime that that house was ever valued at $290,000.

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braxozJan. 26, 1411:48 AM

rlwr51 Jan. 26, 14 10:38 AM It's a crime that that house was ever valued at $290,000. ___________ Value and sale price are often two entirely different things - especially in real-estate.

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misterwittJan. 26, 14 1:43 PM

A duplex or any other multi-family dwelling, by nature, is an investment property. Whether or not it's "owner occupied" isn't the problem. The problem is these out of state investors ( or local, for that matter) who don't take the time to properly screen rental applicants and end up with crumby tenants who destroy the property and add blight to the neighborhood. Also, the City of Minneapolis should be tearing down these houses that have had fires and leaving the lots vacant.

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supervon2Jan. 26, 14 3:33 PM

There is one sure way to avoid a Detroit. Close these places up, bulldoze and sell the lot and sell it for rebuilding. Do it fast before anybody has a chance to put up roadblocks. Presto. Instant saved neighborhood.

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infoninjaJan. 26, 14 4:22 PM

290,000 in 2005. This place should have never gone above 50,000. No wonder the real-estate market crashed. Now the property flipping rats are turning to rental scams.

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fdrebinJan. 27, 14 3:55 PM

Every comment here blames the market value, the sale price the bubble, the banks, the mortgage company, the investor, the city, and maybe the Great Pumpkin for this "house's troubled past". How about the people that have lived in it? last time I checked, drugs don't sell themselves, and homes can't trash themselves. maybe the "renters" need to share the blame?

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