What are my options for condo?

Question

I have a condo in Palm Springs. At the time I bought it last year it was a good deal; bo't for $199K, appraised at $245K. I wanted to fix and flip. But I bit off more than I could chew as I already in the middle of another rehab. So this condo sat, I did some rehab, but it isn't completed and my first property did not sell. I was really stupid and greedy but I though I could do  it. Lesson learned, I am moving on.

I just looked at what similar places are selling for in the area. Ironically, there is a condo selling for $199K in the same complex... but it has 1 more bedroom and is 400 sq ft larger! And it has been on the market of 96 days! Pics in the interior are nice.

I have not looked at sold comps but listings tell me I could price around $185K and watch it site on the market for months. At $150K it may still sit. I owe $179K. Making monthly mtg payments of $1050 plus $150 on HELOC. If completed it would rent for about $1100. Oh this is painful! What do I do now?

Account Closed · Answer

I was just investigating that area. Is it fee simple or on leased land? 
Did you investigate doing a "rent to own" or seller financing type of deal?

Barbara Grassey · Answer

Hi,
Lease option or seller financing may be your only option -- we are having trouble getting financing for condos in our area because there are so many foreclosures that condo associations are going belly-up.  I don't think that is happening in your area, but it may be creeping up on you.

More importantly, seller financing helps your condo stand out from the others and you may be able to squeak out a little more money by offering financing.

5k is a pretty quick rehab.  Concentrate on it and get it off your plate.  Good luck on your property.

Barbara

Account Closed · Answer

John, thank you for the advice. No, it is not completed. Still needs about $5K to get into rentable or sellable condition. Since it is in Palm Springs which has a very strong seasonal market, it is possible to rent for about $1800 a month. An option if I can get it in shape soon.

Matty, this property is on fee simple land. My other condo is on Indian leased land. About half of Palm Springs is on leased land.

Yes, i thought about seller financing or a lease option. I should probably revisit that possibility.

Jon Holdman · Answer

I'd sell it for the $150K.  After the costs, you'll net maybe $135-140K, so you'll still owe about $40K.  If thats a problem, I'd speak to one of the lenders about giving you a loan to allow you to pay that off over time.

Is it fixed up and in good shape?  If not, I'd probably do that.  If its incomplete, it will be a much harder sell, and you'll get less.

Its an awful rental, no matter how you slice it.