Ronkonkoma, NY · Member since 2015 · 7 posts · 0 votes
Hi, over time I am am planning on buying a totall of 5 condo units in a building which has a total 9 condo units. I currently own 3 units and have a pending offer on the 4th.
What are there advantages and disadvantages of owning majority number of condos in a building?
Investor · Schaumburg, IL · Member since 2015 · 219 posts · 104 votes
9y
If more than 50 percent of the units are owned by investors, financing may become an issue. This can work in your favor. If others cannot finance the purchase you can acquire the unit(s), maybe even at a discount.
Once you own over 50 percent you have the majority vote if there is an HOA.
Individual units are taxed at a higher rate As oppose to owning multifamily buildings.
Lender · Nationwide Lender · Member since 2015 · 1k+ posts · 814 votes
9y
@Sandeep Arneja What you have is called a Non-Warrantable Condo. Financing these properties is very difficult. Very few lenders will do it. If you intend to keep the units for every, then it might be an advantage, as you might be able to buy additional at a discount. On the other hand, if you eventually want to sell the units, you might have to sell them at a discount, as the buyer might not be able to get financing.