Hello BP Family!
I've been educating myself on investing in a distressed condo community in an Atlanta suburb called Lithonia. Lithonia, GA 30038. Is there a good way to create a solid comp by setting the standard for what is possible in this community? There haven't been any retail sales for a long time in this neighborhood. I'm looking to fix and flip!
The HOA is working hard to bring all the residents current with dues, but it's still early in the process. There's a 33% non compliance within this association (ie. owners in arrears for several thousand, absentee owners, actual residents not paying dues). The HOA has been revitalized with a new property management team as well as a law firm starting to garnish, levy and set up payment plans for people.
My plan is to go in and buy these distressed condos & town homes for what seems like a good price and convert them into a retail sale. Most larger lenders and especially FHA won't touch loans in communities like this which sucks because this is a prime area for FHA lending!
I guess my biggest questions are: How can I raise the ARV and how can I best attract a lender that will lend for my retail flips within this community? These will be under $100K properties, but very nice when finished
It's much harder to increase the ARV on a condo than a SFR. You can't build out to increase square footage or reconfigure the floor plan to add a bedroom. There's nothing you can do to "attract" lenders. The vast majority of your retail buyers will use Fannie Mae financing which you have no influence on. They also have guidelines specific to condo's. For instance, 51% must be owner occupied. Another problem that I see is that lenders will require a condo cert which will ask how many units are delinquent on the dues and what reserves the HOA has. The 33% non compliance could be a major financing issue.
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