Hot Bargain Property August 24th, 2006
General: Urban East County, 4 bedroom 2 bath asking price between $450,000 and $475,000. They're fooling themselves. I'd start around $350,000 net, and wouldn't go much above that.
Why you should be interested: I couldn't enter the property due to uncooperative tenants but the outside is a mess. The yard hasn't been taken care of at all, and it appears as if a tree fell on the roof. The agent said it was a month ago, and the mess hasn't even been swept off the roof. One corner has been destroyed, and I'll bet at least half the roof needs replacing.
Selling Points: This is a real world example of what happens when you have bad tenants. This place is a mess, and is going to need many thousands of dollars in work in landscaping and roof repair. The bright side is that most of which looks doable by a person of average handiness.
Why I think it's a potential bargain: Do that work, and the property will be worth somewhere close to $500,000. If the current owners or their tenants were going to do it, the outside wouldn't be in the shape it's in.
Obvious caveats: I could not enter the premises. The inside could be as even more of a disaster area than the outside, in which case I would offer even less.
Why it hasn't sold already: The are asking too much for the property. Even before the tree fell, it obviously had no curb appeal. It's expired off MLS at least twice. If I were this owner's agent, I'd see what I could do about the landscaping.
If you keep it ten years and it averages only 5% annual average appreciation per year: Based upon a purchase price of $350,000, it would be worth approximately $570,000. If you held it those ten years before selling, you would net about $270,000 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 $220,000 ahead of the renter, after the expenses of selling. Using a post repairs value of $480,000, this numbers would be much higher.
Fact you should be aware of: The inside could be even worse than I think it probably is.
Obvious way to enhance value or appeal of property: Roof. Landscaping. I'm sure there is stuff inside that needs work.
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. Ask me to find a bargain that fits you!
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