Hot Bargain Property Aug 23rd, 2006
Gorgeous Five Bedroom in a Working Class Neighborhood
General: Urban East County, 5 bedroom 2.5 bath asking price about $500,000. I'd start around $440,000 net, and force them to argue me up while arguing them down.
Why you should be interested: This is a beautifully updated home in a working class neighborhood. Unfortunately for the owner, there's nothing in this class nearby, which means you can get a much nicer property for the same price you might pay elsewhere. It's also in the attendance area for an excellent middle school and one of the best high schools in the county.
Selling Points: This property is newly furnished with all the upgrades. Travertine floors, except in bedrooms. New energy windows. According to the neighbor, just installed a sprinkler system. One kitchen counter still had the UPC on it. The kitchen is gorgeous, as are the bathrooms. Good sized front yard for the kids to play in!
Why I think it's a potential bargain: This is what is known as a "misplaced improvement." It's too much better than everything around it. It's not a good investment property, but it would be a great place to live for a family planning to stay.
Obvious caveats: As I said, its market position is not consistent with buying for investment. This is a place you live in. I also thought the new stucco could have been better done.
Why it hasn't sold already: This is a misplaced improvement. Put it in another neighborhood, and it might be worth every penny. Here, it's overpriced.
If you keep it ten years and it averages only 5% annual average appreciation per year: Based upon a purchase price of $440,000, it would be worth approximately $710,000. If you held it those ten years before selling, you would net about $340,000 in your pocket, assuming zero down payment. As opposed to renting the $2000 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: This is not something for flippers.
Obvious way to enhance value or appeal of property: Landscaping, although with a new sprinkler system I'd expect the yard to come back.
I'm a buyer's Realtor®. I find places like this that can be gotten at bargain prices. I save you money while getting paid out of the listing agent's commission, not costing you a penny. Nor are these the only ones I find. In order to protect everyone's best interests, I require a Non-Exclusive Buyer's Agent Agreement. This is a standard California Association of Realtors form that leaves you are free to work with other agents, but if I find the property you want, I'm the agent you'll use. That's fair.
Contact me: Action Realty 619-449-0723, ask for Dan or email danmelson (at) danmelson (dot) com.
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