Hot Bargain Property July 17th, 2006
General: La Mesa, 3 Bedroom 1.75 bath, asking price range in range of $450,000 to $475,000.
Why you should be interested: This property is vacant and going into foreclosure but the owners still have equity they want to salvage. A real chance to pick up a bargain. Suburban street, less than half a mile to freeway. Downtown is less than 15 minutes, Mission Valley about twenty, and Sorrento Valley not much more.
Selling Points: Corner lot. Place has an enclosed yard, with nice grass and patio area. Hardwood floors except for kitchen and bathrooms. Kitchen is tiled, and appears to have been redone not too long ago. Bathrooms also tiled, and look redone in approximately the same time frame. Two of the three bedrooms should be sheltered from street noise. Detached garage and gated driveway opens on cross street.
Why I think it's a potential bargain: Over three months on the market, entering foreclosure, and the owners want to salvage any equity they can. Not only is it priced to move, but the owners have no choice. It could really use new paint on the inside, installing air conditioning should be a priority for you, and replacing the heater as well as just mowing the front yard.
Obvious caveats: Cross street gets significant traffic. I saw a lot of water in the front yard - whether it's from overwatering or a sprinkler leak, I don't know (building inspector needed, but then you always want a building inspector).
Why it hasn't sold already: The lawn and the condition of the internal paint just leap out at you, killing easy visual appeal. Mow the lawn and spend a weekend painting inside and this will go away.
IF put zero down and if you pay full asking price (which you won't), your payments (Principal & Interest) would be $2913 with a fully amortized loan (Assumptions: $376,000 1st at 5.75% 30 year amortization fixed for 5 years APR 5.976, 2nd mortgage $94,000 at 8.45% 30 year fixed amortization with a 15 year balloon APR 8.473, on approved credit, not all borrowers will qualify).
With a 20% down payment, even if you pay full asking price, payment drops to $2194. ($376,000 1st mortgage at 5.75% rate 30 year amortization fixed for 5 years, APR 5.976, no second. 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 $765,000. Your equity, using the zero down payment scenario described above, would be approximately $365,000. As opposed to a $1950 per month comparable current rental and investing the difference at 10% per year tax free, you would be approximately $165,000 ahead of the renter, after the expenses of selling.
Fact you should be aware of: Older home built about sixty years ago.
Call me. Action Realty 619-449-0723, ask for Dan.
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