Just put my first offer in San Diego!

[Jordan Mantel]

Hi guys! Just put my first offer in- super exiting to even say that haha. Property is 280K market value (3B/2B) condo in Lakeside, California. Sellers description says that owner "wants it gone" and they lowered the price to $250K. I threw in a lowball offer at 200K to see if they would bite. It's a heavy HOA fee of $432 monthly, so I think that's a large reason why it hasn't sold yet. Even so, it still cashflows between $50-150 and this seems pretty rare for San Diego. I'd instantly be buying myself into equity with 80K so I feel as confident as a newbie can feel about this deal! What do you guys think? Thanks!

[Nick Foster]

@Jordan Mantel, congrats on submitting your first offer. Since you are a first time investor proceed with caution. Here are some check-list items:

* Do the CCRs allow for rentals?

* Are the majority of condos rentals? If so, you will be unable to qualify for conventional financing.

* Review and scrutinize the operating statements of the HOA. Those dues are on the higher end. Why? Does the HOA have enough reserves to cover future maintenance? If not they will ask for a contribution from owners. One $1K contribution request and your cash flow is wiped out for the year.

* are there any items/appliances in the condo that need to be replaced? If so, your cash flow can be wiped out for a year.

*did you take into account paying property taxes on $250K and paying insurance? Many newbies overlook this in underwriting.

I know it is exciting submitting an offer, however, this deal looks slim with no margin of error, which I personally would pass on. I hope the above items help you and good luck. If this doesn’t work out, no worries, the best deals often take a lot of patience and time to find.