For some, the Great Recession has been a good deal. Just look at this land speculator who in a year’s time, made over a cool half million dollars by flipping apartments in Ocean Beach.
John Douglas Dudek bought 8 units in the 4700 block of Point Loma Avenue in September 2012 for $1.85 million. He just sold those same units for $2,384,200. That’s over half a million bucks in one year. Nice going for somebody who can afford that.
Isn’t it great to watch as Establishment types roll in the dough, while the rest of us working stiffs have trouble even making our rent or mortgage payments?
The property that has now been sold twice within a year is located at 4746-4756 1/2 Point Loma Ave (assessor’s parcel 448-351-06). It’s a single-story courtyard apartment that includes 8 two-bedroom and one-bath units – which are small, each with 672 square feet. There’s also 8 garages off the alley.
The speculator, John Douglas Dudek, is the trustee of the Dudek Family Trust, located at 1003 Isabella Ave., Unit C, Coronado 92118, and also is of Western Mission Properties. The seller was represented by Joseph V. Siemienowski, of Siemienowski & Associates and, as well, it appears, by himself, JD Dudek, of Western Mission Properties.
The buyer of the apartment complex was Point Loma Properties LLC, located at 7676 Hazard Center Drive, Suite 700, San Diego 92108. Talk about degrees of separation, the manager of this outfit is something called WXYZ LLC, and the Nancy Krasnoff Separate Property Trust is the manager of WXYZ, while Nancy Krasnoff is the trustee of the property trust. Figure that out.
The buyer was represented by Allen Chitayat, of Hendricks-Berkadia.
This time the apartments sold for $2,384,200, including assumption of an August 2012 loan of $639,256 from Opus Bank. Last time – September 2012 – they sold for $1,850,000. Net for Dudek: $534,200.
Realtors think in sale prices per-unit and prices per square foot. This time it was $298,025 per unit. A year ago, it was $232,500 per unit. This time it was $338.75 per square foot. Last time it was $265 per square foot.
Did all that land really increase in value in that one year?
Does this sale represent the return of the OB Housing Bubble?
We’re not certain, but we’re keeping track of those who are flipping our neighborhood.
From The Daily Transcript (subscription)
{ 43 comments… read them below or add one }
So, no one is suppose to make money on anything? When you buy real estate it’s always a risk. I’ve owned 4 houses and only made money on one just from changes in the market. The “value” of land and houses is relative. If I ask for “x” dollars and you pay me, that was the “value” of it.
Glad you lost money. Too bad all speculators don’t lose. I have seen people like you go from owning 6 or 7 places to owning zero because they were greedy. What many wannabe real estate tycoons forget is there is always a bigger fish than you waiting to rip you off blind and deservedly so!
Housing is for living in not exploiting.
I missed the part where Katydid52 said they were speculators. Speculate on much yourself obecean?
Katydid52 defended the actions of the speculator exposed in this article making her a target too. Speculators need to be brought to light as they scurry around the community in the dark. Thanks OB Rag for shining the light on this plague in our community.
Need to find more evidence of the negative results of speculators, kriz? Look no further than the vacant building formerly known as Apple Tree!
Maybe katydid2 moved to different places in her lifetime and NEEDED to sell in order to move. Why is there such distaste for someone making money on selling something…be it a house or Hodad burger? What about the OB absentee landlords that own places but never make improvements, increase rent year after year and pay little taxes due to prop 13…greedy in their own right, exploit their renters. No matter where you look you can find good and bad in something.
Maybe Dudek worked decades to save up enough money for a down payment and was lucky enough for a market boom and a chance to sell at a profit. If you don’t play you can’t win. Dudek got lucky…..and maybe he will help somebody else.
“Maybe Dudek worked decades to save up enough money for a down payment and was lucky enough for a market boom and a chance to sell at a profit.”
Did you read the article, Debbie:
“The speculator, John Douglas Dudek, is the trustee of the Dudek Family Trust, located at 1003 Isabella Ave., Unit C, Coronado 92118, and also is of Western Mission Properties. The seller was represented by Joseph V. Siemienowski, of Siemienowski & Associates and, as well, it appears, by himself, JD Dudek, of Western Mission Properties.”
The guy is a real estate agent.
Whatever……………just as long as “you are getting a deal”, right?
If my landlord is getting away with not fixin’ shit, I better be getting a deal– damn straight Skip!
You know what they say… Haters gonna hate….
Hmmm…. Just standing up for the little guy looks like, bro. If that’s hate in your book i’d say you are the one with dim outlook on humanity.
Speculators are a scourge and lead the race to the bottom.Flipping properties is their soup d’jour.
That’s a terribly myopic and ignorant post. Try having a bit more class as well. Are people not allowed to make money and move to a larger home as their needs/family grows? People don’t always speculate when purchasing more property.
Did the Kumeyaay speculate in SoCal?
Myopic? Not me. You, yes.
Ok so you are just full of hyperbole. I’ll move on.
Please do. Real estate speculators and profiteers are a scourge to communities. Yes, I cheer when they sink.
I call them real estate vampires. People who invest in property, raise rents on the hard working people who live there in order to drive them out, and contribute nothing to the local community. Then they call it ‘gentrification’ to make it seem like they are doing something benevolent. I was lucky my last few years in OB. I had a great landlord who took really good care of our building (which was solar powered so we paid a flat rate for utilities included in our rent) and told me he planned never to sell. He lived right up the hill in Point Loma and grew up in OB. The property on Bacon Street was his ‘baby’ and he never raised the rent the four years I lived there. I loved that apartment!
Indeed you had a good landlord. I never understood why people become property owners if they don’t want to hold up their end of the bargain such as making repairs and improvements and by not raising rents repeatedly on good tenets.
I have had a mixed bag when it comes to landlords in OB. Most just want their rent money and not want to be bothered with much which is fine if I feel I’m getting a deal. But when they raise rents and don’t make necessary repairs then we have a problem and that has been the case in my experiences too. I would bet that Dudek is the latter type, he was after a fast buck and couldn’t give a shit about the state of repair/disrepair of the property and tenants from which he profited. Real estate speculators do not make good landlords. Like contractors, landlords should be required to have licenses that can be revoked if they abuse their privilege. Tenants rights are few and far between as it currently stands.
And tenants have no protection from speculators at all— properties sell and evictions handed out.
I owned 4 houses in the last 30 years. I lived in each one of them. I only made money on one of them. What do you think would happen to real estate if no one ever made any money on it – ever?
If you can only buy a house to live in it who would anyone rent from?
Hi Frank, thanks for sharing this blog. Thanks for sharing information regarding apartments. Awaiting for more blogs like this.
I watched those units go from an eye sore to very attractive additions to the neighborhood. A big renovation job. Does the author of this unthinking hit piece think that work was done free of charge? Do you think people weren’t hired to perform that work?
“Hit piece” on a hit job? Lol.
Doug, while I applaud the mistrust of gentrification in OB, I have to agree with you here. There are a bunch of costs associated with “flipping” a house beyond just subtracting the initial price of buying from the cost of what it sold for, even for a real estate agent who can defray a lot of the closing costs on both transactions. Paying for renovations, property taxes, etc…
A guy like this can make money using his professional skills and knowledge (imagine that), but not without a healthy amount of risk. If the housing market goes back down, or they encounter major unexpected costs in renovation or permitting, they can take a bath in a big way. I would guess that the guy probably had great timing with regard to the market here, and that he made $100-200k on this? And the last 7 years or so speak to it not always being like this in that industry.
The whole process can be good or bad for a community. It’s easy to have this notion that everything in OB was built by hand by working-class small homeowners, but it’s closer to the truth to say that it was guys like Dudek.
When my mother passed away last year back East, my sister had it in her head that she would be able to buy everyone else out on a 1920 house that needed about $100k in renovations above and beyond what the sale price would have been. We ended up selling to a flipper, who is renovating it and selling it as two units.But what was the alternative? Letting it rot and fall down? Selling to someone who would have done a complete tear-down and McMansion rebuild?
Can’t speak to this specific property, but it seems perfectly reasonable to me and an improvement to the existing housing stock. There is a house on my block in OB that went for a lot less in the end after being flipped, but it troubles me a lot more. The unit was in complete and utter disrepair, and after two weeks of crews doing nothing more than throwing on a new coat of paint and some modern looking facade and probably some stainless steel appliances inside, it went right back on the market for a much higher price than they had just bought it for like a month before. Close to zero chance that they did any renovations related to the electrical, pipes, windows or termites that are probably eating that place from the inside out as I type this. Probably an American Dream for some lucky buyer, but just a lot more predatory than what the guy in this article probably did.
I’d like to know what kind of improvements beyond the merely cosmetic could have been made within the 1 year time frame of this flip job. You mention plumbing, electrical, windows and, how about roof?— I’d bet none of that was included in this quick change of ownership by a real estate swindler and all improvements were solely about “curb appeal.”
I’d like to know were the tenants compensated for their inconvenience in any form during said construction ? I’d bet not also. I have first hand experience to that here in OB by greedy landlords
Again, thanks to the OBRag for shining the light on what scurries in the night.
I happen to know history on those units. The roof was replaced less than 10 years ago by the previous owners. Also new double pane windows were replaced in each unit by the previous owner. Whenever a long term renter moved out ,the units kitchen , bathrooms and hardwood floors were always redone., as well as an entire paint job. I agree this new owner made a major improvement with the curb appeal but I have personal knowledge that the previous owners took pride in those units and always made timely repairs and improvements, including plumbing. The new guy did what he needed to do to make $, I assume that is what he does for a living. You can’t fault him for that that he didn’t buy the units to run a rental business for the rest of his career.
So investing in real estate , risking every dime you have and working your ass off to make ends meet in hopes that someday you may make a profit is a bad thing ?
Wake up ! The minute you move out there are 20 more renters ready to take your place and pay higher rent.
We purchased our first home at age 21, with no help from anybody, we saved 10k for a down payment working full time plus side jobs. After ten years of barely making the payments ( double what the rent would have been ) we sold it and made more than 150k profit , isn’t that the American dream ? how did we hinder someone else from doing the same thing ?
Do you think landlords and property owners owe RENTERS something ? your a number, a figure in a log book every month, it doesn’t matter what you think, pay your rent, be quiet and don’t thrash the place.
This article is about a real estate speculator making a quick buck which has a ripple effect on the community. Nobody is challenging anybody’s right to own property, or to profit by it, obracer.
By the way, renters do have rights here in California to protect us against the slumlords. Too bad landlords aren’t required to be licensed like contractors.
Many folks cannot afford to buy property (who can these days, especially around here?) and thus are often at the mercy of landlords. Telling those hard working folks in essence, ” to just put up, shut up and fork it over ” is quite presumptuous of you. Are you in a different class than renters now that you “own property” ? In quotes as I’m guessing the bank actually still owns your dream home.
That’s what the article is trying to say, but not buying. Frank knows I am with him on the fight against gentrification, but this not a great example of that. What appears to have happened here is 8 affordable rental units getting renovated. 632 sqft 2BR/1BA units don’t exactly lend itself to high rents or condofication. Preserving this stock of small-scale affordable units is *exactly* what renter advocates should want to happen.
That property is in a community commercial zone with a 2.0 allowable floor-area ratio and minimal setback requirements. An owner could do a tear-down there and pretty much build a two-story whatever-the-hell-they-want, removing 8 affordable rental units from the market in favor of a McMansion, boutique shopping center, luxury condos, a Mercedes repair shop, etc…
That’s gentrification, not this.
I guess anybody that invests in real estate instead of renting is a speculator then.
Nobody is guaranteed a profit.
” Does this sale represent the return of the OB Housing Bubble?
We’re not certain, but we’re keeping track of those who are flipping our neighborhood. ”
That comment makes this article about more than a speculator making a ” cool half mil ” is it wrong to make a half mil in a short time ?
Obecean, I’m proud to be a working class person.
It took 25 years of hard work to own my properties free and clear,
is that also wrong ? should Frank also keep track of all those that invested in tech stocks 20 years ago and flipped their stock ? or what about those horrible people that purchased gold at $ 330 an ounce ten years ago and sold at $ 1850 an ounce ?
Back to the property, any change that creates off street parking and the ability to provide retail services along with housing is a plus for the community.
Call it gentrification or call it capitalism , but for now call it SOLD ! to the highest bidder. The ripples are coming regardless of who is ” keeping track ”
” Buy real estate, their not making it anymore” my fathers advice when I was 18 and in the U.S. Army. It’s still good advice today.
“Do you think landlords and property owners owe RENTERS something ? your a number, a figure in a log book every month, it doesn’t matter what you think, pay your rent, be quiet and don’t thrash the place.”
Nice guy.
That’s reality obecean, deal with it.
I’m a shrewd business man, and some would say I’m a VERY nice guy.
I tell ever tenant to buy as soon as possible, some have, some continue to pay another landlords mortgage, their choice not mine.
I know a person that worked as a room service attendant for 30 years, he owns 7 seven houses in Imperial Beach, his wife never worked outside the home. Minimum wage plus tips. You have to be willing to do the hard work, and take the risk. Do you think he cares if his tenants think he is a nice guy ?
Does he owe his tenants something ? of course not, he earned what he has.
I’m 46 years old, In 20 years I’ll sell and put millions in the bank, regardless if someone thinks I’m a nice guy or not.
One standard for rentability is 1% per month. At $2,384,200. that is $23,842 per month. With 8 units, that is $2,980 per unit monthly rental. This is for a 2 BR with garage in OB. How does this compare with other OB rentals? Not sure what the averages are.
Hard to use a metric like that in OB, by any rent multiplier investment grade real estate down here is grossly overpriced. Not knowing the units directly, 627 square feet probably isn’t worth more than $1400-1600, even if it’s in good condition.
How bizarre is it that it’s an actual debate here about a property being listed for sale, someone purchasing said property, and then selling it for a profit. So, is it a diatribe against capitalism as a whole, or profits more generally? What’s the difference between picking up real estate for a hopeful profit vs a kid trying to sell a baseball card for a couple bucks. After all, it came in a pack of 5 with a hard stick of gum for $.50. Perhaps some people would prefer to allow for property to only be exchanged amongst family members, but then, wasn’t there a complaint around here a couple weeks ago for just that reason since property taxes wouldn’t go up?
Bizarre. I guess those of us who own a place should be wary about trying to sell it for more than our purchase price, lest we turn into evil speculators for having the temerity to purchase a property at the beach in the hope that it’s value would increase, we can reap some profit, and turn it into a bigger place at the beach.
I think the argument here is that, according to comments from others, major rehab work had been done by the previous owner, and it appears the flipper only did some minor cosmetics (which can be done much cheaper than non-industry folks would assume). If this is the case, and I’m certainly not saying it is, it appears we have a pretty high markup for what (if any) value was added.
As Seth says above (though he doesn’t believe this to be the case here), a lot of flips are complete hack jobs done by unscrupulous hucksters who’ll paint or plaster over any problems and unload a dozen nightmares waiting to happen onto some unsuspecting schmuck. These are the people I have a problem with, and I’ve got to say having been in the industry for over 13 years and what will soon be a third boom-and-bust cycle, they constitute 90 percent of the flippers out there. These people drive up prices artificially, not by creating value, but they effectively also drive increasing prices and rents throughout a community. That’s where the problem lies.
Regardless of whether their work is considered a hack job or not, if they can make a half million in a year and someone bought it, they had the acumen to spot an undervalued commodity that was for sale, and offer it to someone else who was willing to pay a lot more than they did.
Unless you can uncover some nefarious scheme behind the scenes to manipulate value in the market (ala “Trading Places” with citrus crop weather forecast leaks) I’m sorry but the only thing going on here was capitalist investment by someone who knows it takes money to make money and the negativity here amounts to sour grapes by a lot of folks who wish they could play too. (as I wish I could)
The very reason those houses exist was because several generations ago someone had a small fortune to invest and put it into a commodity they thought they could turn for a profit- for chrissakes that’s the reason OCEAN BEACH and all its properties exist today.
Why don’t some of you stop and realize that if you spent less time treating investors with contempt and scorn and more time welcoming them as business partners in a capitalist society they would be far more likely to share their assets with you, to invest in the community and even live in it and be your neighbor- rather then step on you like proletariat vermin they’d rather not associate with or feel compassion for?
I’m not rich in fact I’m at the bottom of the economic totem pole- however I can easily see why the 1% could develop an attitude where they’d watch the rest starve and not give a damn about it.
I have a hard time imagining Mr. Dudek ever considering writing a check for advertising space in this blog or ever sitting down at a restaurant in OB he knew was owned or frequented by some of the more critical OBecians here. Why make it so easy to laugh their way to the bank?
As all this talk about “Gentrification” goes on I still live in the rental at the fourth property on W. Pt. Loma under plans to build, at this point due to the patience and selfless nature of the owner John Douma who was portrayed as some bourgeois stiff by many who oppose his permit. His parents bought this house when it was built in 1955!
Even more revealing is what happened for several months as Jim Burks, the owner at 5170, waited for his demolition date:
For almost 3 months, he allowed a former employee who has been homeless, camp out in the empty structure next to me, along with a couple who had been living in a van, and at least several other homeless locals camped out in the backyard at the same time.
One could imagine he could have gotten in trouble with his homeowner’s insurer, but the former employee kept everything in check and there were no incidents of note. That’s the kind of guy Jim Burks is.
During this time while I was speaking with my landlord’s wife on the street a neighbor from down the block walked by and commented to us about the “a$$****s” who wanted to build. I was both speechless and embarrassed she had to hear that.
In 40 years we can be quite sure whoever’s living in her house will complain about all the rich jerks who want to buy it or tear it down.
They’re people. Sometimes very nice and generous if you just give them a chance.
I think it is about rents becoming even more un-affordable than they are now in OB. Because – the new owner expects to make money, and there is one way to do it in the long run. Eventually, the rents are the income.
Here’s what would make it less affordable in the long-term: a decrease in the available rental housing stock. That would happen if the building was torn down and replaced with a McMansion, condos or some commercial use. These units being renovated should help to preserve them as rental units for a longer period of time.
Renter advocates should not be in the business of helping to force it other way, plain and simple.
So, what are the rents on these units? Does anyone know? Is the new owner losing money because he/she loves the community and wants to keep it the way it is? Could the people who comment afford to live there?
I don’t think they are loosing money. More than likely this property will also be flipped very soon. An investment of 1 mil towards the loan , brings the monthly rental income in line with a mortgage for now. Rents perhaps at $ 1,400 mo. ?
Develop the property with three story retail & residential then sell it , also known as ” flip “. You will triple the 1 mil investment.
*losing
According to this link http://www.placebee.com/ca/sandiego/ocean-beach/1333893, the ad lists unit in January 2013for $1,550.
“4746 Point Loma Ave
Beautiful 2bdrm/1ba – nice, spacious unit w/wood floors, crown molding, gated entrance, bike rack in back and exterior totally remodeled. 1/2 block from beach, great location for beach lovers, walkers, runners, bikers, hikers, etc. 1 block to Sunset Park – Almost ocean-front. Must see. $1550.00 Lease, Security Deposit $1550.00. Available Feb 1st. Contact Ora @ 619-787-8168.”
Last I checked , high home prices in OB made the mortgage payments a lot higher than prevailing rent, assuming 20% down.
Sorry to say that obracer is right. This block is destined for”mixed-use” (Translation: three stories high). The new owner is gambling on the OB Community Plan Update & EIR Released for Public Review; Community Meeting Scheduled for Nov 13. You can see for yourself next time you go up Washington Blvd, La Jolla Blvd, we are next.