What would make this property work for you?

Question

Hi guys,

I was looking around redfin today and I saw this property that has not very much info, but it's been on the market for 5 months and had a price reduction already so I'm gonna assume it's not a great deal. But there's not a lot of info on the description so I started thinking, if I went to see the property and talked to the owner, is there anything I could possibly discover that would make this place a good buy?

I'm curious what you guys would say? I mean sure 13,000 in rent and a bunch of cash stuffed in the walls would be a start, but hypothetically what would you look for? Another hypothetical, if you were the one who inherited it, what would you do with it?

https://www.redfin.com/CA/San-Diego/4383-Montalvo-St-92107/home/5351890

Ryan Phillips · Answer

@Cody L.  @Elliot Blanford  I saw this online a month ago.  Totally agree with Cody, you are buying dirt with a lot of debri on top.  I haven't seen the inside, but who would sell a $1M property without a single interior photo (This screams it probably couldn't pass any safety codes).  It's the location that gives it any value, and I think you would have to set your sights on a big project to make it a profitable move.  Never hurts to arrange a walk through though, unless of course the roof collapses.

Ben Biggs · Answer

Ok, so first off this is a probate sale. Any number of factors could lead to it being on the market for 155 days, which you would have to talk with the agent about, leading me to my second point, you cannot just "contact the owner". The owner has a listing agreement with an agent, and the agent has probably been through hell and back going through multiple and various kinds of situations with this property and probably knows everything that has happened. He would be the best resource to start with. I would *NOT* just flat out approach the agent like you're a buyer without representation because he will do everything in his power to get you to buy it directly from him (double end it), meaning you will have no representation and possibly less than favorable terms. I would approach it casually and just ask:

1. How much activity the property has had

2. If there are any offers and how strong he feels they are (you shouldn't ask directly but if he's not happy with the general direction of the negotiations a GOOD agent will more or less let you know)

3. Write up your LOI from there and have your proof of funds/pre - approval ready and just go from there. It doesn't matter if you think the property is overpriced it matters how much interest it has had and the offers on the table. The market time for properties over $1M goes up significantly from the lower prices homes.

At the end of the day, find a good agent who is battle tested who you can trust. Or don't, and see how it goes!

Hope that helps,

Ben

Elliot Blanford · Answer

Oh ya I was just kidding the current rent is probably around 5k.

@Ben Biggs do you have any insight into how people are pricing 2-4 unit properties in san diego? Cap rates are all over the place, it seems like they are going off sqft and comps.

Dan H. · Answer

In San Diego that close to 1% would be very good.  I would buy most San Diego duplex to quad at 1% rent to price ratio.  I know it seems strange to most other locales that 1% is such a value but that is the state of San Diego RE.

What would make this property work for you?

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