Newer investor here. Do condos make good BRRRR candidates? There are some lower priced (I understand "cheap" doesn't always mean "value") condos in my area, and after running some numbers, I feel I can rehab and rent them out to cash flow in the low hundreds (after expenses, commons, etc).
Anyone have experience in this before? Would love feedback! Thank you guys!!
I lived in and invested in rental condos. No more.
There are condos in good areas where the owners and the HOA try to maintain values. When they try too hard, impose too many rules, it might be good for owner occupants, but really bad news for the condo landlords. What do you think when the HOA wanted to review my leases and approve my tenants. If they don't like my tenant, am I going to spend another two months searching for a new one? Oh, they also restrict rentals to 20% of the total. And when the rental total is at 20%, you might not get permission to rent, especially if you're doing BRRRR, unlike mine, when I bought it, stated it was for rental from the start.
On the other end of the spectrum, there are condos where it is out of control. I was looking for condos in foreclosure, and someone mentioned there are some selling for $8,000. I thought that was the down payment, but it's the price of the condo. It was pointed out there's a big drug problem, and the police is often called. I skipped it.
Nowadays, I own MR in good areas, I'm the owner, and I'm the boss. When my condo tenant complained about tenants next store playing loud music into the night, my sister, who manages the place for me had to call the condo PM, who contacted the HOA, who contacted the condo owner next door. He finally kicked out the loud tenants. But when a second floor tenant complained to me about loud music playing upstairs, I just pick up the phone, call up the offending tenant, and tell them to knock it off. A whole different ballgame.
But then again, there are those that swear by them. I did OK with mine, bought it at the bottom of the crash, sold it 10 years later at the top when prices tripled.
@Jordan Caroleo Yes they can work fine for BRRRR. However, make sure you buy them real cheap and it is a relatively good association. You could sell them after the rehab or hold for a long-term.