Potential Bargain Property July 6th, 2006

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I had a different one ready to go this morning, but it went into escrow this morning at $30,000 off the asking price.



General: El Cajon, 3 Bedroom 2 bath, asking price range $425,000 to $450,000.



Why you should be interested: Large 3 bedroom home close to everything - 3 minutes to I-8, 20 to Mission Valley. Walk to schools and park.



Selling Points: A little work could really fix it up.



Why I think it's a potential bargain: Once you step in the house, everything looks like it fell out of a time warp from the late 1950s or early 1970s (YUCK!). However, all of this stuff is cosmetic and easily modernized.



Obvious caveats: If there's air conditioning, I can't find it, a real necessity in East County. A buyer intending to live there should probably plan to install it.



Why it hasn't sold already: Because the entire interior is UG-LY! Once you get past that however, you see that for not very much work, it could be modernized and made very attractive. All the problems look cosmetic! Put a little work into it and you might make a tidy profit, even in this market!



IF you put zero down and if you pay full asking price (which you won't), your payments would be (Principal & Interest) would be $2957 with a fully amortized loan (Assumptions: $359,200 1st at 5.75% 30 year amortization fixed for 5 years APR 5.978, 2nd mortgage $89,800 at 8.45% 30 year fixed amortization with a 15 year balloon, on approved credit, not all borrowers will qualify).



With a 20% down payment, even if you pay full asking price, payment drops to $2241. ($359,200 1st mortgage at 5.625% rate 30 year amortization fixed for 5 years, APR 5.851, no second. On approved credit, not all borrowers will qualify)



If you keep it ten years at 5% average appreciation per year: It would be worth approximately $731,000. Your equity, using the no down payment scenario above, would be approximately $350,000.



As opposed to a $1900 per month rental and investing the difference at 10% per year, you would be approximately $160,000 ahead of the renter.



Fact you should be aware of: The reason it's a bargain is because most people will see only the ugly surface. This is an older area, so there's a limit to how much you can do without being a Misplaced Improvement, but this property can be made much more attractive than it currently is.



Call me. Action Realty 619-449-0723, ask for Dan.

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This page contains a single entry by Dan Melson published on July 6, 2006 9:11 PM.

Potential Bargain Property July 3rd, 2006 was the previous entry in this blog.

Potential Bargain Property July 8th 2006 is the next entry in this blog.

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