Rentals: condominium out-of-state

14 Replies

greetings!

As a SoCal resident, I can say that purchasing and renting condominiums is no problem. As a matter of fact, arguably, it's less of a headache maintaining it.

So with that said, I was wondering how feasible purchasing rentals would be in Milwaukee, Indiana, Chicago, etc. for 25 - 40k and renting them out with the intent of positive cash-flow.  

Look forward to the responses 

It’s definitely possible here in Packerland.

My suggestions would be determine your market 

and assembly a team to assist with your investing opportunities.

Condo: Strictly cashflow opportunities

SFR: Cash flow with the hope of strong future resell value.

Jenkins Ramon, JMWPS Ventures, LLC | [email protected]

I have a client with over 100 condos on the North, West side of Milwaukee with great cash flow. He paid $15,000.00 or less for the condos and this is why they cash flow. 

Some condominiums associations have budgeting problems which leads to deferred maintenance issue. Many of the nicer condos the numbers do not work because of condo fees and many times the Owner is out of pocket.  

Medium duplexfacebookbannerMichael Henry, Vera Residential Real Estate | [email protected] | (414) 617‑1740 | http://www.verarre.com | WI Agent # 56929-90

I am from the Cleveland area, and here the condo market isn't strong for cashflow currently. SFR are much more appealing when looking at cashflow numbers, as well as 2-4 units. Condo's here don't move quickly, and the price points with the condo association fees just don't' make sense in spreadsheets.

Originally posted by @Jenkins Ramon :

Ohio market condo versus SFR : @Engelo Rumora 

Indiana for suggestions : @Sharad M.

Thanks Jenkins,

I don't know too much about condo's in Ohio except that most are selling in Columbus for 20% lower than in the peak.

SFH are lower entry prices also.

Condo's tend to be more expensive.

Thanks

Medium list n sell logo designEngelo Rumora, List'n Sell Realty | [email protected] | 419 740 6999 | https://agentscomefirst.com/ | Podcast Guest on Show #89

Thanks @Jenkins Ramon , condos are expensive in good parts of Chicago. Can one invest $40K to buy a condo? Sure - but you have to combine that with financing.

Now of course, you can always buy a condo in not so good areas of Chicago for $40K or below. But, will the headache be worth it for you? Only you can answer that.

I doubt low end codos are going to have the appeal of any San Diego condo association.

Hi David, 

For that type of investment you might find very few properties in the North Side of 
Chicago, however you could get some units in the South Shore, or other neighborhoods in the South Side of Chicago and some South and West Suburbs.

Regardless of where you buy the units, you have to make sure there are no cap rates on rentals in the buildings, that there are HOAs present and some owner occupants in the buildings, so the property is well taken care of. You also have to make sure you are aware of all Board Meetings and the issues coming in the building, so cap rates are not instated without the existing investors being grandfathered in.

Lastly, you need a Realtor that will provide you good comps for purchase and rentals, a possible management company and Real Estate attorney, as in IL we use RE attorneys for all transactions versus California.

Good luck to you!

Lumi Ispas, Century 21 SGR | [email protected] | 773‑392‑2906 | IL Agent # 475.113981

Thanks for all the input guys. 

It seems like any investment, whether it be SFR, condos, or MFP there are pros and cons. Although the dynamics might change, at the core of it, the issues are relatively similar.

I'll definitely take things into consideration.

@Jenkins Ramon  Thanks for the mention.

@David G  $25-$40k price point condos will be poorly run associations for the most part, at least that's what my experience has been. The property won't be managed well. The money won't be properly set aside for long term capital expenses.

My fav kind of property to invest in is SFHs.

Medium logoSharad M., REsimpli | [email protected] | 619‑786‑3482 | http://reSimpli.com | Podcast Guest on Show #155

Hello Sharad,

I would love to chat with you about SFHs properties here in the Dayton, Ohio area.  Please private message me when you have some free time to chat.

Thanks 

Sondra

@Dawn Anastasi  recently picked up a condo for the low and is having some great returns on it in the Northside of Milwaukee

I'm probably late to this forum but I'll put in my 2 cents.  I use to manage a condo association as part of a management company a few years ago.  @ the price point you're talking about, $40K or less, there's a high possibility that many of the condo's are in foreclosure.  So while you may have great opportunities for cash flow you may also run in to weak HOAs, troubled reserves and poor maintenance of common areas.  You may also run in to HOAs that are considering changing the board rules/regulations to disallow rentals in the property.  I've seen this happen before.  

Bottom line:  Before you purchase- Do your Due Diligence on the management of the condominium.  Review minutes from the board, understand the foreclosure rate in the building, association rules & regulations, special assessments, reserve accounts & condominium fee.   

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