Modelry - A Random Walk through Internet Real Estate: My Enatai Backyard Foreclosure in Bellevue, WA

My Enatai Backyard Foreclosure in Bellevue, WA

Foreclosure in Enatai Bellevue WAEnatai is a nice neighborhood in Bellevue, WA which is one of suburbs of Seattle.  Enatai is great because it is close to Lake Washington, Seattle, downtown Bellevue, and has pretty good schools.  I affectionately refer to Enatai as the "slums of West Bellevue."  The most desirable neighborhoods in the Bellevue area tend to be Medina (home to Bill Gates), Hunts Point (home to Craig McCaw), and Clyde Hill (home to those executives who can't afford Medina or Hunts Point).  We stumbled into Bellevue 8 years ago when I literally saw a sign for a house that was being sold due to divorce.  We had never really considered Enatai or Bellevue before.  But we love it now and would not think of moving now.

The other day, our neighbor Chuck peeked through the dilapidated, old fence separating our properties telling us that his house is going under foreclosure.  

"WHAT?" I thought.  "Is there a foreclosure in my backyard?"

Chuck and Deanna moved from Texas to Seattle a couple of years ago.  They have been renting the house behind us.  Beautiful house in a great neighborhood (I am biased).  When we first moved into the house, the founder of BitTorrent Bram Cohen lived in the house (BitTorrent is a peer to peer file sharing service which is said to drive 50% of upstream Internet traffic in North America in 2011.)  Bram sold the house when he moved to the Bay Area to start a company around BitTorrent.  Since then, it has been rented two or three times.  

Chuck is a doctor working at a prestigious Seattle hospital.  He has been renting while they figured out schools and neighborhoods in Bellevue.  They pay a management company a reasonably large amount of money each month for rent.  I am guessing $2500-$3000 amonth.

In September, random people started walking around the property taking pictures.  Deanna called the management company.  They had no idea what was going on.  Then out of the blue, a notice of foreclosure was posted on their door.  

It turns out that Chuck and Deanna have been paying their $2,500-$3,000 a month in rent to the management company.  The management company would take their cut and then send the rest to the owner.  The owner HAS NOT PAID their mortgage in TWO YEARS.  Looks like the owner has been pocketing the rent and not paying the mortgage company.  FOR TWO YEARS.

Call it a strategic default.  

Looking at the county records, the house was purchased for $675,000 in 2005.  I bet the value fell to something like $500,000 in the bottom of the real estate market.  I estimate the house is probably worth $600-$650k now, so pretty close in value.  I am sure the owners/investors decided that it would be a long time before they get their equity out of the house, so it is probably better just to keep the rent and go into foreclosure.

The management company had no idea.  Supposedly.  They have tried to contact them mutliple times for the renters, but were never responsive.  As you can see, I have been trying to get this nasty fence fixed for years and have never heard back from the owners.

As for Chuck and Deanna, as soon as they got the foreclosure notice, they gave their notice to the management company that they were leaving at the end of the month.  With kids, they wanted no hassle and no risk.  They found another rental in Clyde Hill - same school district and less of a commute for Deanna.  They paid their last month and packed up and left all within a week.  

It was nice almost getting to know you Chuck and Deanna.

Now the house sits empty and dark with the dialpidated fence falling apart in the rain.  This will be interesting.  I think the auction is scheduled for January 2013. 

Nikesh Parekh

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Comment balloon 9 commentsNikesh Parekh • October 28 2012 11:36AM

Comments

Niki- isn't it a shame what this market brought out, and look at how it affects everyone. Your neighbor has to move, you have to hope the house will be kept up I until it is sold; but the default owner just walks away!
Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) about 5 years ago

sad to say this is happening all the time..... its a sad sign of our times....great enough about the neighborhood

Posted by Gloria Commiso, Hermosa Beach (Keller Williams) about 5 years ago

Let's hope the house won't sit empty too long. It is shamful some of the things that are happening.

Posted by Carl Winters about 5 years ago

Niki...hopefully as you get the word out about what a great neighborhood this is, a buyer will snap it up from the foreclosure.  I'm sure there's someone here in the Rain who could find you a great new neighbor......

Posted by Christine Smith, Exclusive Buyer Agent & Attorney, Canton, MA (Buyers Brokers Only LLC - www.BuyersBrokersOnly.com) about 5 years ago

Nikesh...

This brings up so many questions, but the one thing that stands out is why someone would pay so much for a house that would rent for so little. The value of real estate should be directly related to the relative rent the property would brink. Even at $500k the property should rent for $4500-$5000.

Posted by Richard Weisser, Richard Weisser Retired Real Estate Professional (Richard Weisser Realty) about 5 years ago

Niki, hopefully the buyer at the auction will move into the property and turn out to be a good neighbor.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA about 5 years ago

Richard - not sure why the rent is the way it is.  The rents in the neighborhood are generally in that area for that amount of space.  Right now, rentals in the neighborhood are priced slightly higher than the comparable mortgage would be.

Everyone, thanks for the comments on the blog.  Been interesting to see the depth of the foreclosure & short sale market.....

Posted by Nikesh Parekh, Technology Entrepreneur, Executive, & Investor (Trulia) about 5 years ago

Nikesh - This all sounds very sleazy, on the part of the investor/owner and the management company.  Yes, it will be a while before you'll be able to get that fence dealt with!  You hear a lot about foreclosures, but you never expect them to be in your own back yard!

Posted by Sally Weatherley, Vancouver Home Staging, Home Stager Vancouver, B.C (EXIT STAGE RIGHT) about 5 years ago

Sally - I know, I know!

Posted by Nikesh Parekh, Technology Entrepreneur, Executive, & Investor (Trulia) about 5 years ago

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