Doesn’t seem to be much of a deal here. If you want to buy it to hold for a long time, then go ahead, but if you think you will make any money on this property, you will not.
You say that others are selling in the low forties… well, that’s pretty much what you’re buying it for, after closing costs and all that. Now if he was willing to sell it for the low thirties, you may have yourself a little room to play with here.
Basically, you seem to be paying low retail price for this property, not wholesale.
Posted by Dave (Ma) on January 04, 1999 at 14:32:28:
Still trying to get that first one here it is.
a one bd/condo for $39.900 The broker says the owner is a
Lawyer he bought it 10 years ago for his secretary who
recently passed away now he just wants to get it off the
books.she also said he will have to bring $$ to the close-
ing.condo fee-$234.00 a mth Tax-$65.00 a mth. other 1bd/
condos in same complex selling in low forties.it will rent
for $700.a mth.place is 75% rentals he is definatly a dont
wanna.any ideas? would a mortgage co finance the whole deal?
then L/O sell/price 41k with 2k non refundable option consid.& 800/mth rent w/200 towards downpayment any ideas
on how to structure the purches? Thanks in advance Dave
Dave,
Rather than simply tell you that this is not a deal, I will attempt to explain why. I currently hold 12 Condos for rentals so this is from my experience.
Given the info you provided here are the problems:
The fact that the complex is 70% rentals is bad. This will not meet Fannie Freddie Guidelines therefore any financing will be non-conforming. This will require 30% down and probalbly 9.5% on the rate. That being the case your payment would be 235/month. 30 yrs
The condo fee is extremely high but there could be a temporary assessment in place or there could be underlying problems not being disclosed. Have you thoroughly checked the associations CC&R and financials?
the taxes seem in line with my units.
Not knowing your location rents for 1 BR here are only 500-600. but i’ll assume you are right
Here’s how I see your deal:
purchase price: 39900
down payment: 12000
closing costs: 2000
your investment; 14000
but the following also needs to be covered:
unit maintenace: I would Budget 1200/yr
insurance: 150/yr
Tenant finders fee: 700/year
10% vacancy factor: 840
as you can see these items will consume that 1980 potential profit quickly. Condos three to four years ago were a good deal but current pricing and market rents are now making these deals non-starters. you need to make your money going in. unless there is a significantly lower purchase price i would not consider this a deal. Leave this one to be owner occupied if the price can not be negotiated further down. If you would like more info email me i’m more than glad to help anyone. good luck
Well, I hate to be negative, but there’s absolutely nothing good about this deal. Here are the negatives"
It’s a condo. These are difficult to sell.
It’s a 1 bedroom. These are impossibleto sell.
Association fees and taxes are very high.
Purchase price doesn’t sound like a deal at all.
Condos selling in low 40s and renting for $700? I
doubt it, but if so, what’s the net return with that
outrageous condo fee? Can’t be much.
Stick to 2-3 bedroom SFRs Dave. You’ll come out a lot better in the end.
Posted by Soapymac on January 04, 1999 at 18:17:36:
I’m in MA as a real estate agent.
Depending on what town that condo is in, that fee could be about right, OR…
It could be a condo association that is in some deep doo-doo. I say that because there is a new condo development in my area that protects broker sales. It’s a reasonably exclusive site…and the condo fees are $268/month.
The taxes on yours are $780/year…and that seems a little high also.
Have you done any comparables to find out where the price SHOULD be?