Hot Bargain Property September 28th 2006
Major Project in Million Dollar Neighborhood!
General: Urban East County, 3 bedroom 2 bath. Asking price between $425,000 and $450,000. I'd start around $350,000
Why you should be interested: This building is basically an uninhabitable shell and major work would have to be done to make it habitable, but the payoff would be extremely lucrative. There are million dollar homes all around, and the last actual sale was a 2 bedroom 1 bath lower down the hill for nearly $600,000.
Selling Points: Lush mature trees and greenery, and 180 degree panoramic views of east county! Lot is sloped, but gorgeous!
Why I think it's a potential bargain: Worst house in one of the more upscale neighborhoods in the county!
Obvious caveats: This thing is a shell. It is missing windows and doors, there is no heat, you're going to have to do major renovations, and regulated lenders will not loan money on this property until there is an inhabitable residence on the lot. Only hard money will touch it, and you're going to have to spend a lot of cash to fix it up.
Why it hasn't sold already: Most buyers can not purchase properties with these constraints.
If you keep it ten years and it averages only 5% annual average appreciation per year: Based upon a purchase price of $390,000, and you spending $150,000 to build an $800,000 home, the property would be worth approximately $1.3 Million. If you held it those ten years before selling, you would net about $840,000 in your pocket, assuming zero down payment. As opposed to renting the $2600 per month most comparable current rental and investing the difference at 10% per year tax free, you would be approximately $750,000 ahead of the renter, after the expenses of fixing and selling.
Fact you should be aware of: Traditional financing is not available from any regulated lender on this property until the home is certified habitable.
Obvious way to enhance value or appeal of property: House needs major 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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