Foreclosure Field Report

Video of street in front and your competitors in the driveway: (don’t worry about them!)

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It’s been a little slim on the 2-4 units front lately-there just hasn’t been a lot of new inventory. Besides the eight unit in PB, which is now a short sale with clean title and not a note sale (awesome), I haven’t seen anything that great in over two weeks-until this one.

This is a solid property with not a lot of deferred maintenance, in a neighborhood of mainly houses that looks like north of adams in university heights or normal heights, and not much if any highway noise. It’s in the “quiet” part of North Park-right on the border of South Park. You could get to the main part of North Park or South Park in just about the same time.

Video: of part of the front unit (battery died halfway through):

Back house:

Back house kitchen:

There are two two bedroom units in two separate houses, and tons of parking. I counted over six spaces. The units are nice and separate, and really have that house “feel” to them. The insides basically need new carpet, some appliances and a clean up, and you’re ready to go. No major renovations needed, just get it leased up and go!.

For $354,000, it’s priced low and will sell for more. When I showed up yesterday, there were three other sets of buyers looking at it, and it hit the market only hours before.

Click Here For The Numbers On Nile…

I used $700 per room or $1,400 per unit for the rents. With the newer condition, ample living space inside, and tons of parking, these rents are easily achievable. These numbers will change because the purchase price will change from the list price, but this is a great baseline to start from.

Included in the numbers is a 7% property management fee knocked off the gross rents. If you self-manage, this is of course not there.

All in all, this one is definitely worth a shot if you want a safe, stable long-term investment vehicle or want to live in a house and have half your mortgage payed for. Pretty cool.

Call and leave me a message with your thoughts on this one!:

So I took a look at this one today, a duplex with one two bedroom one bath unit and one studio unit in the back. It’s a short sale, which is (I never thought I would say this) actually better than a reo in some cases. They’re hard to close and scare off a lot of the competition which = lower price for you.

In any case, this is pretty cool property. Nice big lot set high off the street, feels like a real house, lots of extra room, little backyard and sideyards, street dead ends into Balboa Park or you can walk up to University. Cool.

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Here’s my walkthrough-a little shakey as usual, but I’m getting better:

This has been on the market for over 190 days and originally started out at $479,000. Now it’s priced at $395,000. Not bad, not bad, as the Morley Field area is a great area to own in, but I’d like to see that price lowered to reflect the studio in the back.

Like most properties I preview, this one is worth an offer if this area interests you. Thanks for taking a look!

Ted

Nine offers as of 3:30 pm today, with highest and best offer due by 4:00 pm today. This first hit the mls on Friday, and was not available to see the inside of until Saturday.

In any case whether someone saw the inside or not, it sold in four days. I’m seeing multiple offers like these across the board on most properties under $500,000.

If you don’t submit an offer on one of these in the first 3-5 days it hits the market, your chances are slim to none. We have the lowest rates in years, and prices are down to 1998 levels-put both together and it’s a “perfect storm” of cheap money and cheap property that pays you to own it.

Like I’ve said before, by the time the media picks up on this, it will be too late to make the big money profits and cashflow that other people are making right now. Take advantage of this while you still can!!!

Front two bedroom unit:

Back one bedroom unit:

Great location:

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This one just hit the market this morning, and you rarely see any deals in the Morley Field area of North Park. This is a bank-owned reo, very underpriced. It had only been on the market for hours and already groups of people were crawling all over it.

Stats:

-one two bedroom, one bath and one one bedroom, one bath

-no work needed, bank is doing the remodel for you

-tons of parking + a little garage

-list price of $321,900

-walk to Balboa Park

-I estimate gross monthly rents at $2,500-$2,750

Check out the video. I couldn’t go inside because the bank was doing some remodeling (and yes, I’ll get better at this over time):

Here’s some of the remodel progress in the back one bedroom unit;

It also has ample parking, a huge plus:

Last, but not least, make sure you take a look at the numbers, click here: 3504 Florida St-the numbers I ran them at the list price, but I figure it will shake out around $375,000 or so.

This is basically as good as it gets; if you have any interest at all make an offer as soon as you can. Don’t worry about the other buyers, you do have a shot. Trust me.

There is a building with two current condo units for sale that just popped up: a one bedroom for $64,000 and a two bedroom for $94,000. And it’s not way out east-it’s right in North Park two blocks from University Ave.

Their Loss Is Your Gain

The whole building is a failed condo conversion. A small group of investors bought the apartment building late in the game, did a condo conversion, parceled the units out and remodeled most of them. Well, they were never able to sell more than just a few of them in the high $200,000’s and low $300,000’s.

All Of The “Comps” Are Now Trashed

100% of the building is now in some stage of foreclosure either short sale, bank-owned or about to be. I got involved in this building last year, but the banks at the time would not pull their heads out of the sand and sell the units for what they’re selling for now. They kept sticking to their high prices even as the inventory kept piling up.

Cashflow Is King

Now, they’ve finally slashed the prices and are just unloading the inventory around a 70% discount. If you ever wanted cashflow at an easy to get into price, check out the numbers below. One other thing: two of the one bedrooms sold for $51,900 and $59,000 and two of the two bedrooms sold for $79,000 and $89,000, but I’ll use the higher current list prices for a “quick and dirty” ESTIMATED cash flow…o.k., two other things: because of current lending rules, you have to pay cash here, and then put a loan on it after the fact (there are private money lenders that will lend you money to buy one of these, but it’s not cheap-call me if you have questions). But I will do it with an assumed loan with 20% down.

1 Bedroom

One bedroom, purchase price of $64,000 with 20% down loan at 5%. Your payment on principal and interest is $275. Wow. Tax, $59 bucks a month. HOA, $214 per month. Total: $548 per month. This would rent out for about $950, so you’re cashflowing $402 bucks a month. Heck, with no loan you’re getting $677 dollars back every month while you wait to put a mortgage on it.

2 bedroom

Let’s say you pick up the two bedroom for $95,000. 20% down, loan at 5%. Principal and interest payment is $408 dollars a month. $87 bucks a month tax, $214 per month HOA. Total is $709 fungolas per month to own this thing. This would rent for about $1,400 gross. So you’re cashflowing it $691 per month with a loan or $1099 with no loan.

Some people’s numbers would go up or down from here depending if they self-managed, how they rent it out for, etc. These are just baseline estimates to work off of and get your investment juices flowing.

These are so low priced, the market could go down another 20%, and you would still be fine. For this building, this is the bottom.

What other investment could you get into that would begin paying you right away on a monthly basis, and also give you a huge appreciation bump in the years to come?

Pretty cool.

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This four unit property with eight bedrooms went from $349,000 to $339,000. This would be one heck of a project, the bold only need apply.

This one was pretty brutal. I saw the price of $349,900 and that it was a fourplex with a good unit mix (one 3 bed, two 2 bed and one 1 bed units) and went over right away. Besides the close proximity to El Cajon Blvd, this place is in really rough shape.

Makes you wonder what happened here before the tenants were evicted. The price isn’t too attractive anymore when the building needs basically a studs-out remodel, new roof, etc.

There’s really something to be said for buying a property where the work has already been done for you, and then the previous owner ran out of money, like 4745-4747 Mansfield. You don’t need to spend large sums of cash up front, and more importantly, time getting these properties leased up. You just close the escrow and hit the ground running.

Map:

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For a ten unit building, I like the looks of this one. Asking price is $1,150,000 or $115,000 per unit. Unit makeup: four 2/1’s at 650 square feet with average rents at $940 as per loopnet and six 1/1’s with average rents at $813.

Gross income is $109,380, net is $64,503. Cap is 5.60%, gross rent multiplier 10.5.

According to the city tax record, this property was last purchased in 1991, price undisclosed. Other than that, it’s been bounced around between family members is trusts and the like. They took a loan out in 2004 for $250,000 so they have plenty of equity. I also noticed that the listing broker has the same last name as one of the owners, so this would be a case of dealing directly with the seller.

Offer status unknown at the time of this writing, I have left a message for the broker. UPDATE, just got a call back: This was under contract as of last Friday. Buyer was a cash buyer, discounted slightly from list price, not a lot. Buyer did a walk-through and was disappointed at the age of the building, wanted seller to do new electrical, plumbing, etc. Broker thinks it will fall out of escrow today or tomorrow and has listed the property back active.

The outside of the property has been spruced up with new paint and what looks to be new landscaping. Generally with these buildings they don’t do anything to get it ready for sale, so between this and the price I think they’re pretty motivated.

Location is pretty good, walkable to all the action on University Ave.

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front of 4055 utah.

looking down the north side towards utah

back of the building from alley four garages. looks like someone may have just moved with all the trash

View looking south towards University Ave from front of building