Hot Bargain Property May 7th, 2008
Nice Place to Live
General: La Mesa, 3 Bedroom 1.75 Bathroom 1 Optional room
What's Wrong With It: The kitchen cabinets were left untouched in a recent remodel. Hardwood floors need resealing. I'm pretty certain the upstairs room was done without permits.
Why It Hasn't Sold: They're trying to sell it as something it's not.
Who it's Not Appropriate For: Someone not willing to take the risk of unpermitted additions.
Selling Points: Decent sized back yard, split into two terraces, either one of which could fit a small pool. Living room an kitchen have great light, and the kitchen floor and counters are new. Hardwood floors through most of the ground level, with travertine in kitchen. Very quiet neighborhood, but still walking distance to shopping. Great Schools.
Who Should be Interested: If you're looking to house a large family in a great neighborhood for a reasonable price, this is it! Alternatively, it'd be a good prospect for a college rental.
Why it's a Bargain: There really isn't much that really needs doing, and the property appears to be in good shape. Assuming the addition is unpermitted, I think it would be fairly easy to bring it to code and get it permitted.
What I think I can get it for: $360,000.
Monthly Payment examples: I've currently got a thirty year fixed rate loan available for qualified buyers at 5.75% with one point, or 100% VA financing at 5.75% for the same cost.
With no down payment: VA 30 year fixed rate loan at 5.75% (FHA 97% financing) payment $2101, (APR 5.889)
With 20% down: Fully amortized payment of $1681 (APR 5.901).
Other financing options are available, potentially lowering the payments, but I'm quoting real loans that real people can get, that will stay exactly the same until you pay it off.
Investment potential: If you keep it ten years and it averages only 5% annual average appreciation per year: Based upon a purchase price of $360,000 the property would be worth approximately $590,000. If you held it those ten years before selling, you would net about $290,000 in your pocket (not including increased value from updates!), assuming zero down payment. As opposed to renting the $2000 per month most comparable currently available rental and investing the difference at 10% per year tax free, you would be approximately $250,000 ahead of the renter, after the expenses of selling.
To learn more: Agree that you'll use me as a buyer's agent if you buy it. If you don't like it or don't buy it, no obligation is incurred. If you're not working with someone who will go out and find properties like this, maybe you should consider working with me instead!
Dan Melson, Buyer's Agent
Action Realty Inc
9143 Mission Gorge Road, Suite A
Santee, CA 92071
619-449-0723 X 116
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