Deal of the Week: Investor Special in Adams Morgan?

January 25, 2010
5 Comments

by Mark Wellborn

Deal of the Week: Investor Special in Adams Morgan?: Figure 1

2305 18th Street NW

We are admittedly a little unsure about this week’s Deal of the Week, however it is not often that you see a one-bedroom unit in Adams Morgan for $250,000. Here are our concerns: 1) It is a foreclosure; 2) It is tenant-occupied until 2011; and 3) There are no photos. Despite these issues, an investor might see this as a steal. A thirty percent down payment would mean that your monthly payments (with taxes and fees) would be around $1,300, and the monthly rent in this section of DC is likely higher than that. While you periodically would have to deal with repairs and calls from the tenant, it seems like it could be a good investment in the long-term. For the full listing, click here.

2305 18th Street NW, #301 (map)

Price: $249,000

Bedrooms: One

Bathrooms: One

Year Built: 1911

Here are some monthly payment calculations based on a 30 percent down payment and a 30-year fixed rate mortgage at 5.4 percent.

Loan Amount: $174,300

Principal and Interest: $979

Taxes and Fees: $329

Total Monthly Payments: $1,308

This article originally published at https://dc.urbanturf.com/articles/blog/deal_of_the_week_investor_special_in_adams_morgan/1713

5 Comments

jg said at 7:48 am on Tuesday January 26, 2010:
is that as close as you can forecast on the rent? Doesnt sound like an investment property, sounds like bailing out the lender/current owner. Investing in RE is not for amateurs--too easy to get one's butt kicked with unexpected expenses, tenant issues etc. An investor would expect to buy at 70% of market value to make it worth the effort, most folks dont want to do what is necessary to find that kind of opportunity. presenting it as an investor opportunity really is not in the average potential buyers best interest, unless you provide them with a lot more details on market value and Profit and loss etc. jg

Mark said at 2:14 pm on Tuesday January 26, 2010:
Thanks, jg for the insight. The rents in other comparably sized units in the building currently range from $1,300 to $1,500. Given that the unit is tenant occupied until 2011, we couldn't really see anyone other than an investor buying it.

Rock said at 2:59 pm on Tuesday January 26, 2010:
It appears to be a coop building, so it would really have to be an investor paying all cash with no loan. There's no way you can get a bank to finance a coop investor purchase these days. If I were going to sink that much cash into a property, I'd expect a much bigger discount to fair market value.

Jeanne said at 5:25 pm on Tuesday January 26, 2010:
It is an interesting situation, though. I agree with Mark in that I can't really see anyone other than an investor buying it given the tenant situation. However, the return on investment may be a long ways away.

Bernard said at 4:04 am on Sunday January 31, 2010:
This is an interesting proposition. I would go in and try and buy out these so-called tenants (probably the owner posing as a tenant). I read the description and the realtor claims that the tenants pay on time. Well, show me the paperwork! I want my OWN tenants if I'm going in as an investor, not someone who's a potential squatter. I've seen this with bank-owned properties where the owners pretend to have a tenant in there, but they're actually living with the so-called tenants. Pay them off and then submit a low-ball offer and see where it goes. I wouldn't touch this above $220k.