Cirios Opportunities: Betting on San Bruno
This post first appeared in the March edition of: Cirios Trends: In Search of Real Estate Opportunities.
Opportunity Overview:2730 Sherwood Dr., San Bruno, CA 94066
For many people familiar with the Bay Area, the Peninsula is a place where only the wealthy can afford to live. And while this holds true for most areas, there remain some desirable areas that still afford first-time buyers a place to call home. One of these towns is San Bruno. Known more for its poor weather than affordable homes, San Bruno often gets a bad rap: There are plenty of neighborhoods that aren’t buried within the fog belt. San Francisco International airport is close (although in some cases too close), and job centers are a short drive North or South. Homes frequently sell for less than $600,000 which, on the Peninsula, is downright cheap.
Property Details
Bedrooms: 3
Bathrooms: 2
Living Area: 1,140 square feet
Lot Size: 5,432 square feet
List Price: $549,000
Sale Price: IN ESCROW (8 days on market)
List Date: 2/12/2010
This property was purchased at Trustee Sale on January 4, 2010 for $444,000. In just over 30 days, the buyer was able to relist the property for more than $100,000 above acquisition cost. The quick turnaround indicates that improvements were more than likely cosmetic in nature. Given the lack of equivalent homes on the market, it ‘s safe to assume this property will sell at or above its asking price.
Here is one potential scenario of how an investor would make out:
(Note that the cost figures below are estimates)
$444,000: Purchase price
$30,000: Repairs and remodel
$1,520: Taxes
$3,500: Insurance
$5,000: Escrow costs
$484,020 Total Investment
Although a $30,000 budget is not especially large, given the small size of the home, many high quality improvements could have been made. The final numbers in our scenario look like this:
$570,000: Sale price (estimated)
$28,500: Less Real Estate Commissions
$484,020: Less Total Investment
$57,480: Profit
11.9% ROI
A return of 11.9% is not as high as other deals we have seen come across the steps, but escrow is scheduled to close on March 11th, so the deal took just under 70 days from purchase to eventual resale. The annualized return on this deal was meaningful, indeed.
Tags: 2730 sherwood dr san bruno, foreclosure auctions, san bruno real estate investment opportunities, trustee sales