Older condos in the area (Annandale, McLean: for sale, foreclosure, rent)

[rubytue]

I'm currently in the market for a condo to use when I spend the week working in Bethesda (I live way north of Baltimore). I'm in the cheapest bracket to even consider this around here, but I am finding options in. Before you think I am totally crazy, I lived in NoVA for 6 years before moving, plan to move back to NoVA eventually, and really, its 25 minutes from Pimmit Hills to downtown Bethesda (35 mins pm). I've been living there for 6 months, but my sweet deal is coming to an end shortly. I'm trying to go into this with an "investment" mindset (long term, more as income property, not flip). Yes, I know the pitfalls of condos as investments - first to fall, last to rise, fall the hardest, etc. Also see this as a good reason to be looking at them now.

So anyway, I'm weighing these options, does anyone know anything about any of these complexes?

(1) The area of "McLean" between Pimmit Hills and the beltway, off Magarity. McLean Hills and McLean Chase are two options. From what I have read online, these places are a but run down and noisy. But the location is very near the new silver line station (years off).

(2) Vienna. My favorite complex is Mosbys Landing.

(3) Annandale near Fairfax Hospital. Woodburn Village is one example.

(4) Annandale/Falls Church - Yorktown Square. Cheapest option, which makes me wonder why.

[pcity]

One problem with older condos is that the condo fees tend to be very high to cover necessary repairs. That's one reason some places sell cheaper than they seemingly should. Just watch out for that.

On the positive side, utilities are often included in the condo fees in older condos.

[flrnova]

I know McLean Chase. Built in the 1960s. Went condo in late 1980s during another bubble. There is no way that you can get a good yield off that place at current pricing. I was looking at the economics of buying a short sale or foreclosure there. With a ~$350 condo fee you would need to put 30-40% down at the current asking price to be cash flow neutral (vs. rent) at current asking prices.

I would only buy there if you get a top floor unit (esp. if you plan to live there for a while) because the construction quality is essentially garbage. But that's true of most construction in the USA in general, so no surprise.

McLean Hills looks lower end.

You could be in downtown Bethesda in less than 15 min outside rush hour.

Other places include the Colonies and Gates of McLean. The latter must be quite noisy, squeezed between 495 and the toll road. Not very appealing. It was a housing bubble mecca with dozens of for sale signs as the market hit the wall.

Colonies is even cheaper I think but I think condo fees are north of $400.

Another place to consider is low end THs called the Westerlies up near the Safeway. Not sure how low they have dropped in price. They command slightly higher rent, typically $1600.

Then you have those towers, Regency and something else on Old Meadow Rd.

[rubytue]

The townhomes near safeway are north of $275k for the basement units, haven't even seen a two level. And yes, the Colonies fee really scares me especially since fees do not hold steady (and they are in the mid-200s, too). I'm wondering what I am missing in the cash flow calculation though, as I'm getting PITI+conf fee about $100 less than rent (McLean Chase). Vacancy estimates? Is that where I am losing it? I grew up watching my father do this, but he went commerical 30+ years ago, and he isn't so good at explaining thing lol (nor is his market even comparable - $200k buys waterfront there) Eh, maybe my budget is just too tiny to even consider this.

Yes, the plan is to live in it for at least one year. Or really, live in it part time for at least a year. Maybe longer depending on how things go with our SFH.

[flrnova]

How much are you figuring on renting the McLean Chase for? I wouldn't count on more than $1300.

$275k for those dumps? Uggh. I guess Uncle Ben's quantitative easing and the $8000 subsidy is having an effect.

The downside risk is too large at this point. You are going to see interest rates go up and then they can't keep up with the tax credits for ever. The market will self-correct.

[flrnova]

Ok let's assume condo fee plus tax is $550 per month.

At 5% interest rate for 30 years then you would need need to pay 750 per month to break even at $1300. That means a loan of 110-120k. I think some sold for around 180k (short or foreclosure) at the trough. Mind you the peak price in 2005 here was 385k!

Moderator cut: Please send MLS sites that are not generic sites via DM, thanks. will give you past sales including subsidies.

Also, I would get a 15 year mortgage for an investment property. You are paying too much interest over thirty years to make it good business.

The conclusion is that you are better off renting, and you won't face a risk of capital loss, which I perceive as quite high given the woeful economic policies of this country. I would say 180k then you can start thinking about it but for 200k, no way.

[rubytue]

Yeah, those are the numbers I was working with +-$50. But thinking more in the $160-170k range. Break even cash flow before tax but after taxes it should be better, no? AGI is low enough to deduct losses. After may 1, I'm thinking what hasn't sold will take a hit. So maybe things will fall lower?

I go back and forth with if this is a good idea or not. Maybe I'm pushing to hard to make it be a good idea. On the plus more, I drove around this evening and ruled out McLean hills and yorktowne square. Woodburn looked decent on the outside, and I would think the proximity to fairfax hospital would keep demand steady. Only prob there is outrageous condo fees! I need to find me a crappy foreclosure that I can spit and polish to cash flow. Repairs and upgrades are very easy for us.

Thanks I know I sound naive, and I probably am. But I need to get smart on it. I don't want all my money in the stock market, and I don't want to wait for my father to die to get his properties. OTOH, I wish I lived where he does and I could better afford to dive in. He keeps telling me I should go for vacation property down near him. Not sure if he thinks it's a great idea or just wants his daughter to visit more

[qwertman]

rented a basement unit in westerlies for a year and a half or so. It's a nice neighborhood but price still seems kinda high for a 40 year old development. The place is really convenient, especially with the metro coming in a few years, i'd think it might be a decent investment.

[adolpho]

poor soundproofing at Woodburn Village. You may want to check on sirens, also. I remember when they were converted; about 1987.

Since you are an investor; you may want to look in areas with better deals/ratios. Last year, I paid 35K for a 560 sf one bedroom in Summerlin, NV. There was a weight room, public transit, pool, security gate, etc.....the hoa was 121.92 and the taxes 50. Rents for 650, but sold in 5 days for 55K. This is an A, A- neighborhood. Price in Fairfax County would be 200K, HOA 300, and taxes 200. It wouldn't rent for more than 1200, and would be a terrible investment.

[rubytue]

Originally Posted by adolpho

Since you are an investor; you may want to look in areas with better deals/ratios. Last year, I paid 35K for a 560 sf one bedroom in Summerlin, NV. There was a weight room, public transit, pool, security gate, etc.....the hoa was 121.92 and the taxes 50. Rents for 650, but sold in 5 days for 55K. This is an A, A- neighborhood. Price in Fairfax County would be 200K, HOA 300, and taxes 200. It wouldn't rent for more than 1200, and would be a terrible investment.

Yeah, I'm thinking that may bet a better idea investment wise. My thinking was that I would live there for one year, then turn it into investment. But I'm starting to think its just not going to work in NoVA. Prices are better in MD, but the taxes. Ug! The taxes. $300/month in taxes kills the cash flow there.