A condo that last sold for $237,000 is now on the market for $52,000. Now, the question is why and is it a good deal or not?
In Normal Heights, a low priced condo conversion received four offers in two days.
Marc Carpenter an R.E.O. specialist with Allison James Estates and Homes isn't surprised the unit is already in escrow.
"If you would have said two years ago there were going to be properties in San Diego at $52,000, people would have said your crazy," said Carpenter.
Carpenter adds that in San Diego County in the last year, 39 properties have sold under $50,000 and 972 properties sold for less than $100,000.
"There are some great deals in San Diego. You have to pencil out your return," said Leonard Baron a finance professor at SDSU.
Baron also specializes in real estate analysis. So, News 8 asked him to pencil out this deal for us.
Baron says investors who buy the property, then rent it out could see a 12 to 15 percent return on their money in the first year.
"Which is a great deal especially historically speaking it's an incredible deal," added Baron.
That Baron says could get even better, if the buyer lives in the condo. The return on their money in the first year could be as high as 31 percent.
"That's incredible compare it to putting money in the bank at a couple of percent or in a bond at five or six percent or in the stock market at eight percent," continued Baron.
But Baron says when buying a condo, you must make sure the home owner's association is in good financial order with plenty of reserves or you could get hit with a special assessment.
"They can be anywhere from five to 10 thousand. I've seen one in a very rare case that was over a hundred thousand dollars," noted Baron.
Also make sure the HOA is not facing any litigation.
So how long will deals like these last? It depends on who you ask. Professor Baron believes condos for $50,000 will be available in San Diego for the next couple of years.
