Rental Property Investor · Cleveland, OH · Member since 2019 · 150 posts · 47 votes
Hey BP community ,
Can somebody please inform me how buying town-homes or condo is ? Like the process , the money,what rental strategy are you doing to collect rent. Our you doing Rent By Room, our you renting the whole town-home ? I'm curious in doing some investing in once; I seen some decent ones in my area for around $70-100k.
Real Estate Broker · Miami, FL · Member since 2018 · 236 posts · 99 votes
6y
@Ondrej Brown Might need to start of by getting prequalified by a lender to see the amount that you qualify for. Most lenders require the condo association to have a certain amount of reserves in the bank and I've seen many cases where the deal falls apart because of this situation. You should check with the condo association management company if they have any reserves in the bank before you move forward with any offer. Could save you valuable time.
Real Estate Broker · Salt Lake City & Oklahoma City · Member since 2018 · 3k+ posts · 2k+ votes
6y
Hi @Ondrej Brown! There can be a little difference or a lot of difference between condo investing and SFH investing, and I'll hit on two of them here:
- Lending: sometimes it isn't possible to use institutional mortgages (specifically those intended for the secondary mortgage market) to purchase condos and townhomes. This can happen because of the ownership structure of the project you are looking at purchasing, or for other reasons.
- HOA abilities: the HOA wields a power that is unnerving at times. Even here in my market, which is known for largely productive and non-hostile HOAs, condos and townhomes have been the exception to that rule. One of my favorite condo communities in the city last year voted to ban renting-out of the units. . . they are now an "owner only complex" . . . which dropped the market value of the units about 15% over a few months.