Have a question that I wanted to see if I could get some input on. I am looking at 3 condos in a complex that has a total of 32 condos. The condos are typically priced about 65k-75k/each. Have an opportunity to purchase two of these condos below the typical price. These two have long term tenants in place. The 3rd condo is a foreclosure, needs work and is priced accordingly.
Here is my question: The HOA dues are $150/mth and it looks like an accounting firm handles this process. The outside of the complex is in need of major painting and other cosmetic work. Does anyone know what the process is to initiate a conversation about outside maintenance to the firms that handle the HOA dues? Before I purchase any of these units, i would like to at least know that these issues are being looked at or handled.
You should talk to the management company that's managing the condo complex. Let them know you're looking at one of the units, and ask them as many questions as you can. Make sure you get a copy of the HOA documents. Find out if they have any planned maintenance or assessments, and also how much the HOA has in reserve. They may not give you this info until you actually have a property under contract.
Be careful with condos and HOAs. Make sure that the rest of your budget works as normal, then make sure you add in the HOA fees and also plan for possible assessments. If there's a lot of obvious deferred maintenance, and there hasn't been an assessment lately, you could get hit with a large assessment as soon as you buy the properties.
Also find out as much as you can about the HOA itself and how it is run. If the property doesn't look like it's run well, it could be the property management company's fault, but most of the time it's the HOA board's fault. A bad HOA can make owning a condo a nightmare and reduce the value of your investment. On the other hand, a well-run HOA is awesome. Talk to neighbors and realtors and get a sense for what's going on in the area.
@Chad Benedict is correct about talking to the management company. You can put an HOA document date and contingency in your contract if you want.
That is, you give the seller XX days to get you the documents and then you can break the contract if there is something upsetting in the HOA.
I went under contract for a condo and ran screaming when I got the HOA disclosures. The HOA had been ticketed by the city for vast and many property safety issues. The County Housing Authority had also put all owners of Section 8 properties in the complex on notice that the HOA had 2 years to fix all of the problems or they would be revoking all contracts at next renewal.
The list of tickets, lawsuits and other issues was about a page and a half long. The concept that the county was giving them 2 years to fix the problems should indicate the length and breadth of the violations.
Thanks for the replies. I appreciate you all taking the time. I will find out who the property management company is and go from there. Will let you know what happens. Thanks Again! Ryan
Wanted to give you an update on what I have found out so far. There are 20 units in this condo complex. They are owned by investors and tenant owners. There are two for sale that I am interested in. The couple selling these two are also head of the HOA. I was told by the realtor that this couple would want to give up this role since they will no longer be involved. Question: What is the benefit of being over the HOA's at the complex? Is there a monetary value? The realtor mentioned that I could probably take over.
There is also a 3rd unit in this complex that I am considering. It is a foreclosure and is in need of work.
No monetary value. You could however help implement Proper dues and spending...budgeting for future capex, but not throwing money away on stupid stuff.
Not to hijack the thread but this is something i was looking into as well so I'd appreciate if I can add a few questions to yours:
Who determines who heads the board? is that an elections thing? If you buy the 2 units and there is an investor that owns/buy 20 of the 32 can they take over the board?
I owned a condo before. Usually the tenants vote for the HOA. Most tenants have no interests in being in the HOA. So if you self nominate, you may be the only one running for the position. From what it sounds, the investor didn't have interest in running for it, otherwise, he/she would've taken over long time ago. It's an opportunity to get some experience in PM. Some HOA's have rules on the % of units can be rented. Doesn't sound like you have that problem here. But getting involved in the HOA can prevent rules made against investors. So even if there's no compensation for being on the HOA, it's still worth considering.
Sorry, I meant the owners voted for HOA. Some HOA's may have different rules. My HOA communicated directly to the owners, not the tenants.
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