I was so intrigued with what I found last week that I decided to take a tour of some of these Santa Maria homes to see just what condition they are in, where they are located, etc. I also spoke to our loan department for more information on what sort of credit and income is necessary to purchase one of these bargains.
The good news is that if you find a $200,000 home you like, you need only a $30,000 annual income and a credit score of 720 or above to qualify for conventional financing (30-year fixed-rate loan). Rates vary depending on how much of a down payment you make, your credit score, etc. FHA financing is also available, with easier quaifying requirements and a lower down payment.
Now for the homes. I cherry-picked six houses or condos in pleasant neighborhoods, that required less fix-up effort than the others. None are in move-in condition, but all can be put into good shape with interior paint, new carpet, some kitchen and/or bathroom repairs (replacing one or two appliances, painting or replacing beat-up cabinets, etc.), and minor cosmetic work. A budget of $10,000 or less would cover this work, with something left over to do some landscaping and decorative additions.
The homes I looked at ranged from $159,000 to $199,000. The least expensive is a 3 BR, 2 B condo with a two-car garage and a large family room in a complex with a pool and clubhouse; the most expensive is a1500-s.f. 3/2 home with a two-car garage and a huge back yard with shade trees, grass, and a well-built dog run.
In order to take advantage of these bargains, you must look past the very obvious and discouraging flaws to see what paint, carpet, and fairly minor repairs will accomplish. In fact, the main reason these homes remain unsold, even at incredibly low prices, is because most people are scared away by their outward apearance and can't imagine how to make them attractive once again.
A similar search for properties in Atascadero, Paso Robles, and Templeton (all in San Luis Obispo County, CA) with a higher price range (up to $300,000) yielded nicer homes, more diverse neighborhoods, equally good investment or first-time buyer opportunities.
If you're working with clients who earn at least $30,000 a year and have cash for a down payment plus fix-up expenses, you would be amazed at what is out there! I've been getting a lot of interested feedback from friends and associates when I discuss this. I'm doing more research on rental rates, property management firms, and so on. Being able to offer the whole package to clients is a Good Thing!
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