Bargains I've Found: May 2008 Archives

Cheap Lender Owned Remodeler's Project in Great Neighborhood!

General: La Mesa, 3 Bedroom 1.75 Bathroom

Con:

What's Wrong With It: Yards are down to bare soil - need sod. Pool in backyard needs refinishing. Kitchen has been torn apart, and is not currently usable. Everything in the property is thirty years old, at least.

Why It Hasn't Sold: Currently unsightly, to say the least. Also, it may be an issue getting a conventional residential loan before the kitchen is fixed.

Who it's Not Appropriate For: Anyone who wants a turnkey place to live in. If you live in it, you're going to have to "rough it" for a while.

Pro:

Selling Points: Good light, seems basically solid structurally.

Who Should be Interested: People willing to but some sweat into the property that will be repaid when it's finished.

Why it's a Bargain: Lender owned, and most people can't see that the property is in a state you'd have to take it to in order to remodel.

Financial:

What I think I can get it for: $270,000.

Monthly Payment examples: I'm going to leave those off, this time, because we might not be able to get a residential loan at first.

Investment potential: If you keep it ten years and it averages only 5% annual average appreciation per year: Based upon a purchase price of $270,000 the property would be worth approximately $440,000.

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!

Contact Information:

Dan Melson, Buyer's Agent
Action Realty Inc
9143 Mission Gorge Road, Suite A
Santee, CA 92071
619-449-0723 X 116

Lender Owned Beautiful Comfortable Family Home Close to Everything!

General: La Mesa, 3 Bedroom 1.75 Bathroom

Con:

What's Wrong With It: Gets some traffic noise, and the garage was converted to the 3rd bedroom.

Why It Hasn't Sold: People aren't looking for this kind of property in this area.

Who it's Not Appropriate For: Someone looking for a quick profit. This is not a flipper house.

Pro:

Selling Points: Hardwood floors in the main part of the house, tile in the newer part. Kitchen is recently remodeled. Living room is original mid-century, but family room with lots of open light is a more recent addition. Back yard is lush and green.

Who Should be Interested: People looking for a good place to live at a reasonable price. This is a neighborhood that's starting to come up.

Why it's a Bargain: Lender owned, and the work has been done.

Financial:

What I think I can get it for: $370,000.

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 $2159, (APR 5.935)

With 20% down: Fully amortized payment of $1727 (APR 5.900).

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 $370,000 the property would be worth approximately $600,000. 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 $1700 per month most comparable currently available rental and investing the difference at 10% per year tax free, you would be approximately $170,000 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!

Contact Information:

Dan Melson, Buyer's Agent
Action Realty Inc
9143 Mission Gorge Road, Suite A
Santee, CA 92071
619-449-0723 X 116

Great Entertainment Property - Partial Fixer in Highly Desired Area!

General: Unincorporated area (La Mesa Zip), 2 Bedroom 1.75 Bathroom 1 extra room

Con:

What's Wrong With It: Outside needs paint. One door needs replacing, as does carpet in both bedrooms. Some tile needs repair. One bathroom is straight out of 1965.

Why It Hasn't Sold: Most people can't see past what it needs to what it's got.

Who it's Not Appropriate For: It is going to take some work for most folks to be happy here.

Pro:

Selling Points: Combination living room family room with great light and great visibility. Kitchen is freshly redone, and the front bathroom is in attractive as well. Outside has sparkling pool and nice brick courtyard for outdoor gatherings, and a large lot with plenty of room left to do whatever you like. Lots of parking in front of the house, and everything you see around it is more expensive, some of it much more expensive.

Who Should be Interested: This is what opportunity looks like, whether for a fix up profit or for a place to live for ever and ever.

Why it's a Bargain: Worst house in the best neighborhood is the classic recipe for bargains and it's not that bad.

Financial:

What I think I can get it for: $375,000.

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 $2188, (APR 5.935)

With 20% down: Fully amortized payment of $1751 (APR 5.899).

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 $375,000 the property would be worth approximately $610,000. If you held it those ten years before selling, you would net about $300,000 in your pocket (not including increased value from updates!), assuming zero down payment. As opposed to renting the $2100 per month most comparable currently available rental and investing the difference at 10% per year tax free, you would be approximately $260,000 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!

Contact Information:

Dan Melson, Buyer's Agent
Action Realty Inc
9143 Mission Gorge Road, Suite A
Santee, CA 92071
619-449-0723 X 116

Nicely Maintained Property on Quiet Street!

General: La Mesa, 4 Bedroom 1.75 Bathroom 1 extra room

Con:

What's Wrong With It: Living room is on the small side, and kitchen layout is a little unusual.

Why It Hasn't Sold: It was placed on the market over-priced. Now that they've cut the price, people aren't interested because it's been on the market too long.

Who it's Not Appropriate For: That's a good question. I can't think of anyone who couldn't be happy here.

Pro:

Selling Points: Wrap around side to back yard that's pretty much all usable, with a decent view. Nice light throughout. Extra room would be a good office, and might even be a legal fifth bedroom. Everything is clean and well-maintained.

Who Should be Interested: Nice house at a reasonable price on a quiet street in a desirable neighborhood with above average public schools. What's not to like?.

Why it's a Bargain: As I said, the owners basically shot themselves in the foot by over-pricing it initially. Once buyers have decided they're not interested, it's hard to get them back.

Financial:

What I think I can get it for: $410,000.

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 $2393, (APR 5.931)

With 20% down: Fully amortized payment of $1914 (APR 5.894).

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 $410,000 the property would be worth approximately $660,000. If you held it those ten years before selling, you would net about $320,000 in your pocket (not including increased value from updates!), assuming zero down payment. As opposed to renting the $2100 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!

Contact Information:

Dan Melson, Buyer's Agent
Action Realty Inc
9143 Mission Gorge Road, Suite A
Santee, CA 92071
619-449-0723 X 116

Cheap Fixer with WOW! Potential!

General: La Mesa, 2 Bedroom 1.75 Bathroom 3 Optional rooms

Con:

What's Wrong With It: Floor plan all Chopped up to allow two families to live here. Pretty much all the fixtures are 1970s vintage. Original hallway walled off. Addition was probably unpermitted.

Why It Hasn't Sold: Very uncomfortable to live in either half - but restore the original hallway and it would become a spacious house for a large family!

Who it's Not Appropriate For: Someone not willing to take the risk of unpermitted additions. Someone who needs a "turnkey" property.

Pro:

Selling Points: Large back yard with decent sized pool. Fenced are could be separate dog run. Restore the hallway, and you've got a very comfortable home for a larger than average family, and it's extremely close to very desirable schools. It would be relatively easy to make the extra rooms legal bedrooms, if desired. Kitchen has good light and plenty of room to cook. Back yard has place to park RV if desired, and garage has direct access to kitchen

Who Should be Interested: If you're looking to house a large family in a great neighborhood for a reasonable price, this is it!

Why it's a Bargain: It looks a lot worse than it really is. Re-connecting the two halves would be as simple as removing one non-structural wall, and everything else is cosmetic. I don't see major issues with getting the addition a retroactive permit.

Financial:

What I think I can get it for: $300,000.

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 $1750, (APR 5.946)

With 20% down: Fully amortized payment of $1401 (APR 5.913).

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 $300,000 the property would be worth approximately $490,000. If you held it those ten years before selling, you would net about $240,000 in your pocket (not including increased value from updates!), assuming zero down payment. As opposed to renting the $1700 per month most comparable currently available rental and investing the difference at 10% per year tax free, you would be approximately $200,000 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!

Contact Information:

Dan Melson, Buyer's Agent
Action Realty Inc
9143 Mission Gorge Road, Suite A
Santee, CA 92071
619-449-0723 X 116

Nice Place to Live

General: La Mesa, 3 Bedroom 1.75 Bathroom 1 Optional room

Con:

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.

Pro:

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.

Financial:

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!

Contact Information:

Dan Melson, Buyer's Agent
Action Realty Inc
9143 Mission Gorge Road, Suite A
Santee, CA 92071
619-449-0723 X 116