Buying at the right price is critical
Hello BP Nation,
I bought a package deal last month and there was no agent involved in the deal as the properties were purchased directly from the bank. Of all the properties, one is a townhouse with HOA. I didn't look into the HOA rules and assumed that the townhouse will have no rental restriction. My assumption was based on the fact that I did a townhouse deal very close to this one and that complex didn't have any rental restriction. That was an oversight on my part.
So my guys fix up the rental and my leasing guy shows up to the property and sees a sign saying "No Renters Allowed". I called the HOA President and she confirmed that this complex is owner occupants only. I didn't freak out about it or anything because I bought it a really great price that I can list it on the market and make a decent profit by selling it, but I am looking into doing seller financing to learn that side of business also.
I don't usually look at townhouses or condos because of the HOA issues, but the price of this one was so good that I knew I would be able to make money one way or the other. I had budgeted to spend $5k on the rehab, but only ended up spending $2,500 because we didn't run into any issues, so that added another $2,500 to my initial equity
Buying a property is the easiest, but at the same time the most important part of the process. You really do make your money when you buy a property. If I had overpaid for this property, I would have been upset, but because I have equity in this property, I am just figuring out my options to best capture that equity.
I thought I share my experience.
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#2 All Forums Contributor
- Real Estate Broker
- Lake Oswego OR Summerlin, NV
I have seen those restrictions in higher end developments in the Deep South.
And of course NY.
glad you had plan B :)
Yeah, HOAs can be a pain to deal with. I own a condo in downtown Chicago that my wife and I used to live in and we are currently renting it. Fortunately, that building has one of the best HOAs in the area.
Looking back on the townhouse purchase, even if I had known about the rental restriction, I would have still purchased it because of the price. I would have gone back and negotiated the price with the seller, but would have purchased at the agreed upon price also.
how did buy directly from the bank?
The deal was brought to my attention through a common contact. The bank had acquired another local bank and were looking to liquidate the other banks' REO and wanted to get rid of them by June 30. I was able to buy them all cash and was able to get it done.
amazing! Good work. .
Buying a property in right price, sometime it’s difficult, But with the help of bank. You can easily buy a property in right price.