Condo investing for beginners

[Diane Heidke]

Hey everyone, I’m a newbie investor looking to do my first deal within the next 6 months. I originally wanted to invest in multi family properties, but they seem to be few and far between in my area, and the properties are overvalued based on what I could get in rent. I found a condo (one unit) where the numbers seemed to work based on my personal goals, in an appreciating market (Raleigh N.C.) I’ve read about 15 real estate books in the past year, and not a single one talked about condo investments, so I’m curious if anyone has done a deal, good or bad, id love to hear your experience. Of course HOAs can eat into your cash flow, but could HOAs also be a positive for a first deal, since now I don’t have to worry about lawn, landscaping, snow removal, and big expenses like roofs that could wipe out all my cash flow for the property? Curious to hear your experiences. Thanks! :-)

[Mitch Miller]

@Diane Heidke welcome to the community. As far as investing in condos, it can work. Some of the positive is that like you said outside maintenance is not your responsibility, just the inside. The only thing I would make sure you do is look at the HOA Finacial statements. You will be paying a higher HOA because the exterior and common areas are covered for budgeted maintenance. The item most people run into is that HOAs don't always run perfectly. Most HOAs are underfunded for big repairs like roofs, windows and other big repairs. So then those happen you will be given a assessment and charged for your share of the bill on top of the monthly HOA Fee sometimes upward of 10s of thousands of dollars. Also make sure the HOA allows for rentals. Some have bylaws not allowing for rental activity.