Dearborn, MI · Member since 2016 · 12 posts · 2 votes
Hi everyone,
I’m exploring a potential investment and would love any insights from those with experience in similar properties. I’m considering purchasing five units in an eight-unit light industrial property structured as a condominium. Each unit is individually owned, with some owners holding multiple units.
A few things I’m trying to understand better:
Pros and Cons: What are the main benefits and challenges of owning multiple units in a property like this with a condo setup?
HOA Dynamics: How has your experience been with condo associations in this type of asset? Any issues with fees, management, or decision-making?
Exit Strategy: How easy/difficult has it been to sell units in similar properties? Did you encounter any unexpected hurdles in the resale market?
I’m weighing this as a potential long-term hold, but want to be mindful of any unique risks that come with this structure. Any stories, tips, or advice would be hugely helpful as I decide whether to move forward or reconsider this purchase. Thanks in advance for sharing your experiences!
Investor · Sacramento · Member since 2018 · 40 posts · 10 votes
1y
I would advise to buy all of them because it will make it alot easier for you to put capex money into exteriors, landscaping, fixing parking lot , fencing , lighting , etc because sometimes the hoa might not be collaborative in my experience. I currently own 4 units in 8 unit complex and i had to pay from my own pocket for cutting down trees because hoa has no money and the other units members dont' want to pitch and could care less also they dont' maintain there budlings which makes the complex look bit down. If you own majority and are able to control hoa which comes with its own headache and not totally passive that can help .
Developer · Rochester, NY · Member since 2016 · 406 posts · 339 votes
1y
@Ibrahim Mawri my main concern is on exit strategy. Commercial properties owned in an HOA tend to have issues with financing. You'll want to make sure multiple banks look at the deal to see general appetite for financing.
What happened to us is we took over a string of condos from a non bank lender that foreclosed on the properties. It was very difficult for us to find a bank to refinance the deal and also difficult for us to procure a buyer for the condos we didn't want.
The cap rates typically traded higher than a simple ownership interest. The only thing that saved us is that we bought them cheap but our exit price was not nearly in line with what we thought we would get.