Potential Bargain Property July 6th, 2006
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.
Buy My Science Fiction Novels!
Dan Melson Author Page
The Man From Empire
A Guardian From Earth
Empire and Earth
Working The Trenches
Preparing The Ground
The Book on Mortgages Everyone Should Have!
What Consumers Need To Know About Mortgages
The Book on Buying Real Estate Everyone Should Have
What Consumers Need To Know About Buying Real Estate
Want San Diego MLS?
Add to Technorati Favorites