Looks like Oleander knot.

Overwatered probably. That soil looks pretty soupy.

I water it 2 times a week. Its really hot over here and the sun is really "scorching" the pot.
The soil (at least 1-2 inches or so) is dry before I water it again.

I also looked at some pictures of Oleander knot and it does not seem to be it. I will try to water it once a week and see if it improves.

Thx.

This post was edited by Xan84 on Sun, Aug 3, 14 at 6:00

I don't know what it is but if it were mine I'd cut that stem back into healthy tissue and jettison the manky looking part. Oleanders can stand hard pruning.

Where do you live? Very few if any potted plants can take 100+ degree afternoon sun...not even cacti or drought tolerants like oleanders UNLESS you do the double pot method.

I would move it out of afternoon sun entirely.

Be aware that the top inch or two can be dry but the rest can still be soaked depending on your soil mix. I would move it to afternoon shade and give it a good drenching (until water comes out the bottom) 1x per week. If that gets it healthy, you can give it a little fertilizer to keep it going.