Cash Flow Investment

Cash Flow Investment - 20% Down

June 27th, 2008 categories: Deals

Here’s what my typical investor says to me – “Denny, I want a deal. Find me something that the owner paid twice as much as he’s trying to sell it for and something that I can cash flow with only 20% down.” Well, here’s what I have to say to you – It doesn’t happen.

Unless of course, you get lucky and you read my blog and act quickly when I tell you to.

Unit 317 at the Gaslamp City Square is what you’ve all been waiting for, but can’t ever seem to find. It’s kind of like the really good looking, intelligent, self-confident-but-not-conceited, athletic, beer drinking, fun woman, who isn’t crazy AND who actually likes you…if you ever come across something like this, it’s either too good to be true, or you better jump on it(no pun intended) before anyone else does.

What makes this property such a great deal? Simple…this is the single property that I’ve come across in 4 years that is both a great unit and can be rented out without putting you in the red, with only 20% down. At a list price of $399,000, this 2 bedroom, 2 bath, 1,113 square foot condo is a steal.

The poor owner purchased this 3^rd floor corner unit, for $700,500 back in December of 2006. Now this is a short sale and while the bank has not yet approved this price, a similar, much less desirable unit just went into escrow at $399,000 in the same building (this is a foreclosure – yes I realize I said there aren’t that many Downtown, but I never said they didn’t exist).

Here are the numbers:

Purchase Price – $399,000
Loan Amount – $319,200(80%LTV)
Monthly Mortgage – $1,596(based on a 6% Interest Only loan)
Monthly Property Taxes – $416(based on 1.25%)
Monthly HOA Fees – $340
Total Monthly Payment – $2,352/month

This unit can rent for $2300–3000/month, depending on whether or not it’s furnished, as well as the lease length. Another advantage to owning in the Gaslamp City Square is that they only require a 1 month lease length – other buildings require 3, 6 or 12 month leases.

Aside from that, the Gaslamp City Square is in the heart of Downtown San Diego. This corner unit over looks 5^th Ave and Island Ave. The rental market Downtown is very strong and with an estimated 10,000 more residents within the next 2 years, I can’t see this changing(especially as the real estate market begins to turn and prices rise…yes this will take a while).

Aside from that, I think this unit has a great floor plan and shows very well. And that’s that. If you have any questions, like, “When can I meet with you to write up an offer,” just give me a call.

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Denny Oh 858.243.2092 dennyoh@prusd.com