Real estate investors, like baseball players, are inclined to try for the home run. Yet hitting singles and doubles can be more effective – ask Tony Gwynn.
Yesterday we wrapped up a 12-month-long escrow!
It was a short sale of a one-bedroom condo in La Mesa for $60,000:
This is his fourth recent condo purchase in the area. The lack of financing available has caused the prices to plummet, and cash buyers are able to get a decent return on investment. But the potential for appreciation looks promising too, based on past results.
He has been down this road before, literally – he owned the 1br across the hall in the same condo complex:
His purchase price in 1994 was $50,000, and he sold it for $215,000 in 2006.
In 1995 he paid $45,500 for unit #101, and sold it for $219,800 in 2006:
LGS has no illusions about appreciation being in the distant future, but we agreed that one day the government is likely to flip the switch and make condo financing available again. In the meantime he’s getting 10% annual returns.
For those who are looking to build a real estate portfolio, you may want to consider this type of property as a good place to start. Occupants of one-bedroom units tend to be single people who stick around – in the past he had tenants stay for years. Combine that stability with the low maintenace of condos and you have a relatively painless investment!