There are plenty of statistics, reports and graphs dealing with the presence of foreclosures in current real estate market in Los Angeles. However, sometimes studying one individual case can present a clearer picture than all the combined data.
This bank owned duplex in Highland Park is located in the hills overlooking York Valley. City records indicate appoximately 2,000 square feet, built in 1960. The listing remarks indicate a 3-bedroom, 1-bath unit upstairs, and a 2-bedroom, 1-bath unit downstairs. It is currently offered for sale at $339,000.
It originally sold 1976, for $82,500.
The next sale, over 30 years later, in December, 2005, was for $630,000, with a mortgage loan of $504,000.
The Notice of Default was filed February, 2008.
The Notice of Sale was filed May, 2008.
The Trustee Sale took place June, 2008.
The property is tenant occupied. The listing remarks indicate gross rental income of approximately $2,000.
Consider this: With a loan of $504,000, the previous owner's monthly mortgage payment would have been approximately $2,800. The previous owner's annual property taxes would have been $7,875 per year (or approximately $650 per month). Add in water, gardening, and a little for repairs and maintenance, and it appears the previous owner would have been running a negative of over $1,500 every single month.
Compare with this: The payment on a loan of $271,000 (80% of the current asking price) would be about $1,500. Annual property taxes on a sale price of $339,000 would be approximately $4,200.00.
Someone buying this bank-owned property at the current asking price of $339,000, actually has a good chance of breaking even each month.
This article is not intended as an advertisement of any property listed by another brokerage firm. It is intended only as a report of current real estate market conditions.
However, if you are interested in purchasing a property in today's market, we have a staff of highly qualified agents ready to assist you.
Bob Taylor Properties, Inc. – 323-257-1080 — bobtaylorprop@gmail.com — 5526 North Figueroa Street, Highland Park, CA 90042
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since when is breaking even investing in real estate good practice?