Time to walk away?

5 Replies

I am looking at acquiring one bedroom condos.  I have a suspicion that these may not be easy to rent out.   I checked the Section 8 Listings, and found three neighboring units that  - One that was listed in Jan/14 and two in April/14.    Craigslist shows three units that were listed in June, July, and August.

Hey William

Do this:

Contact 3 property management companies in the area and 3 superstar real estate agents in the area to see exactly what is going on.   

Also see if the association is having issues in terms of people not paying their associaton dues/fees.    

Condos/Townhomes can be a tricky thing. HOA's jack up the monthly association fees to offset fees that are not being paid by other condo owners.

Now, on the flip side of that it could be a good thing for you.   You can always take it out on getting a lower price.  

Try contacting a local title company as well so that they can run title on the units and find some info about that association.   

Sometimes:  A problem is only a solution in disguise

Good Luck to you

@William A.  You got some great advice from @Gerald Harris  . I actually prefer condos to SFRs despite the HOAs, but you have to buy into the right association. I'd also advise against owning more than two units in any one complex.  One $2K special assessment will mean $2K times the number of units you own.  Can get costly real quick!

Call the HOA management and find out what is going on. The last complex I was interested in had no master insurance policy because they were broke. So I could buy all of the insurance in the world, but if a strong wind blew over the building, it would be impossible for me to rebuild my 3rd floor unit.

Good luck to you!

How does master insurance work @Ursula B.  ?   Does it cover the building, and then you are still responsible for buying liability insurance? How much do you pay for insurance on top of master insurance per unit?

Yes, the master covers the structure and your policy covers what's within your four walls. My last condo purchase was in March, and the insurance is about $190 a year. I paid cash but was sure to get a copy of the master insurance policy because I planned to refi it. Sure enough, the bank asked for a copy of the master policy when I refinanced.

If there's a master I see no need to overinsure the unit, but if there's no master, an owner is practically stuck if there's a structural disaster.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here