Hot Bargain Condo July 24th, 2006

General: El Cajon 3 Bedroom 1.75 Bath Asking Price Range $250,000 to $275,000



Why you should be interested: THREE bedroom condo, that you can be an owner for about the same monthly cost as the closest comparable rental. How long has it been since you've seen something like that? This property is vacant and very close to the freeway. Downtown is about 20 minutes, Mission Valley a little less, and Sorrento Valley less than downtown. On market five months, and it has everything that's a push away. Nasty outdated furnishings, but cosmetic and easy to update.



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. It looks like most of the unit is above the garage.



Why I think it's a potential bargain: Vacant and been on the market over five months. It has zero curb appeal right now, in fact it was a real effort for me not to turn around and leave. The complex is okay but certainly not upscale. The inside of the unit looks like a time warp to the 1970s, but the things causing this perception are cosmetic and shouldn't be expensive to upgrade.



Obvious caveats: The air conditioning is there, but I didn't turn it on.



Why it hasn't sold already: 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 $1622 with a fully amortized loan (Assumptions: 209,600 1st at 6.00% 30 year amortization fixed for 10 years APR 6.238, 2nd mortgage $52,400 at 8.35% Home Equity Line of Credit APR 8.511, on approved credit, not all borrowers will qualify.) Interest only loans are also available to lower the payment further.



With a 20% down payment, even if you pay full asking price, payment drops to $1223. ($209,6000 1st mortgage at 5.75% rate 30 year amortization fixed for 10 years, APR 5.983, no second. on approved credit, not all borrowers will qualify.) Interest only loans are also available to lower the payment further.



If you keep it ten years and it averages only 5% annual average appreciation per year: It would be worth approximately $425,000. Your equity, using the zero down payment scenario described above, would be approximately $205,000. As opposed to a $1750 per month most comparable current rental and investing the difference at 10% per year tax free, you would be approximately $175,000 ahead of the renter, after the expenses of selling.



Fact you should be aware of: Subject to a short sale, and sounds like the bank is being difficult.



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.