Potential Bargain Home July 10th, 2006
General: El Cajon, 3 Bedroom 2 bath, asking price range $425,000 to $450,000.
Why you should be interested: If you like the idea of a house but don't like yard work, this is it. Small PUD and most yard maintenance services are more per month than the PUD fees. No shared walls, and an outside fenced area that's unique to this property. Two right turns to freeway, 15 minutes to Mission Valley, and back is just as easy.
Selling Points: Appears to be well taken care of. Master bath is nice, with separate tub and shower and two sinks. Kitchen is nicely tiled with new or almost new appliances.
Why I think it's a potential bargain: Almost four months on the market, and it's been vacant. The owners have got to be feeling the pinch from feeding the alligator, plus the fact that it looks like a wrongly listed condo in MLS.
Obvious caveats: Outside, I could hear the freeway. Inside, I couldn't. Unlike most of what I post here, there's not a lot you can do to enhance value. This is a nicely kept place.
Why it hasn't sold already: Because it looks like a wrongly listed condo in MLS. Also looks like it might be manufactured, but it's not. Asking price is also a bit too high, scaring potential buyers away.
IF put zero down and if you pay full asking price (which you won't), your payments would be (Principal & Interest) would be $2781 with a fully amortized loan (Assumptions: $355,200 1st at 5.875% 30 year amortization fixed for 5 years APR 6.093, 2nd mortgage $88,800 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 $2094. ($355,200 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 $723,000. Your equity, using the zero down payment scenario described above, would be approximately $350,000. As opposed to a $1700 per month current rental and investing the difference at 10% per year tax free, you would be approximately $109,000 ahead of the renter after the expenses of selling.
Fact you should be aware of: The reason it's a bargain is it looks like a condo or manufactured home the way it sits in MLS, and as a result of that plus the fact that the asking price is too high, it has sat on the market. Owners look to be feeling the pinch from a couple of things I saw, giving the potential for a bargain.
Call me. Action Realty 619-449-0723, ask for Dan.
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