Hot Bargain Condo July 21st, 2006
General: East County 2 Bedroom 1.5 Bath Asking Price Range $250,000 to $275,000
Why you should be interested: This property is vacant and very close to the freeway. Downtown is about 20 minutes, Mission Valley a little less, and Sorrento Valley not much more. On market over six months, and it has everything that's a push away for buyers. If you have small children, there's a grass courtyard as well as a pool right in front of the unit.
Selling Points: You will almost certainly be the only one making an offer. Vacant and subject to a short sale, the owners know they're in trouble. No upstairs or downstairs neighbors.
Why I think it's a potential bargain: Vacant and been on the market over six months. It has zero curb appeal right now. The complex is not attractive and the unit has not been taken care of. You can't do anything about the complex, but the stuff with the unit is cosmetic and shouldn't be expensive to upgrade. Right now, the place feels like an apartment. That would change with the right updates.
Obvious caveats: The air conditioning is there, but a real Mickey Mouse arrangement.
Why it hasn't sold already: The complex is not attractive and this unit is UG-LY and needs work.
IF put zero downpayment and if you pay full asking price (which you won't), your payments (Principal & Interest) would be $1640 with a fully amortized loan (Assumptions: 212,000 1st at 5.875% 30 year amortization fixed for 10 years APR 6.122, 2nd mortgage $98,400 at 8.35% Home Equity Line of Credit APR 8.509, on approved credit, not all borrowers will qualify.)
With a 20% down payment, even if you pay full asking price, payment drops to $1254. ($212,000 1st mortgage at 5.875% rate 30 year amortization fixed for 10 years, APR 6.104, no second. Also available: thirty year fixed rate loan at 6.125% APR 6.357 payment $1288. On approved credit, not all borrowers will qualify)
If you keep it ten years and it averages only 5% annual average appreciation per year: It would be worth approximately $430,000. Your equity, using the zero down payment scenario described above, would be approximately $200,000. As opposed to a $1400 per month comparable current rental and investing the difference at 10% per year tax free, you would be approximately $98,000 ahead of the renter, after the expenses of selling.
Fact you should be aware of: Traffic Noise. I didn't hear it inside, but I did outside.
I'm a buyer's agent. I find places like this that can be gotten at bargain prices. I save you money without costing you a penny.
Contact me: Action Realty 619-449-0723, ask for Dan or email danmelson (at) danmelson (dot) com.
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