Hot Bargain Property June 4, 2008
Solid Lender Owned Property in Great Neighborhood!
General: La Mesa, 3 Bedroom 1.75 Bathroom
What's Wrong With It: The color of the kitchen cabinets has to be seen to be believed. The cooking equipment is basically original 1960. Neither bathroom has been updated since at least 1975, and the floors need to be polished and sealed.
Why It Hasn't Sold: Those kitchen cabinets are the unforgivable sin for most.
Who it's Not Appropriate For: Somebody who has to have it beautiful immediately.
Selling Points: All of the rooms have really good light, the living room especially. Everything is solid and even the stuff that needs to be updated is very livable as it sits. The back yard has plenty of room and an excellent view. The neighborhood is solid and desirable. The schools are excellent.
Who Should be Interested: Mostly, people willing to deal with surface cosmetic issues - the kitchen cabinets would be the hardest.
Why it's a Bargain: Priced aggressively to sell, $30000-$40000 below less desirable properties in the same neighborhood.
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 5.875% with one point, or 100% Thirty year fixed VA financing at 5.875% for the same cost.
With no down payment: VA 30 year fixed rate loan at 5.875% (FHA 97% financing) payment $2129, (APR 6.015)
With 20% down: Fully amortized payment of $1703 (APR 6.027).
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 $580,000. If you held it those ten years before selling, you would net about $280,000 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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