Situation: Condo is paid off, but there is $7K in condo association fees outstanding. Condo association is trying to foreclose. Condo needs about $10K of refreshing/updates. ARV estimated at $105K. Monthly condo fees are $320. Area rents are b/w $900-1200. This is a Western Massachusetts condo.
- What would you do/offer?
- Can they not sell the condo on MLS or FSBO if the condo association is filing for foreclosure?
Except for the fact that the clock is ticking, and the owner should be motivated, it's like any other purchase. The association fees get paid out of the closing. Be aware though the amount will continue to grow, with the interest and and additional monthly fees and attorney fees.
This looks like an opportunity... big one. Ton's of equity, merely 7k in association fees and you say the condo is trying to foreclose but hasn't gone through the process? This spells MOTIVATED to me. Obviously the seller doesn't want to go to foreclosure and lose out on any liquid assets you would be willing to provide/equity. I think I need to resort to others on the forum on the question on the MLS or FSBO.
To me, if they are filing but the owner is still the legal owner you have all the leverage in the world and the condo association will just care about getting their 7k. Here is where you come in, offer 65cents on the dollar for the condo and offer to pay the 7k in closing costs. Get someone in there on a lease option or heck, just keep it for yourself and buy and hold. The numbers work, if you get 1000 a month, at 65k with no 20% down or anything you still can cash flow in excess of $300.00/month on a condo with limited maintenance.
I'd make calls, do some research, and plug away at this one.
you should check the total amount due from the HOA, make sure it includes ALL the costs to cure- taxes, attorney fees, etc, not just the back amount owed.
they may be able to sell it or get a loan if there is equity. follow the foreclosure laws in your state if it is owner occupied.
To be clear, the foreclosure does not affect the owner's ability to sell it, or list it on the MLS. It's just a lien to be paid. And just like any other straight up sale, get title insurance.
How's the overall condo community? If it's strong and desirable I'd try to hold it. If it's so-so, something like this I'd offer $45K to seller, buyer pays the closing costs. They'll have comfort in knowing $45K is going in their pocket. I wouldn't offer say $60K and let the costs come out of that. I feel people wouldn't understand what amount they'll actually get. If they know they're getting $45K, they'll understand. Close, put it right on the market as-is for $90K, and hope to walk away with at least $20K in less than 45 days.
Are these condo fee liens like tax liens where you can buy them and get paid interest when the owner sells or it is foreclosed on?
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