Fractured Condo Purchase

[Anthony Jentsch]

Hi BP, I'm looking at an out of state fractured condo deal. The deal is to purchase 13 units (already owned by an investor for 8 years) out of 84. Only 7 other units are owned by another investor and are rentals. The remaining 64 are individual owners.  The broker states the owner of these 13 would give you majority seats on the condo *** board. I have researched these types of deals a bit and see quite  bit of "stay away" "too complicated" etc. I have 2 major questions/concerns from anyone who has invested in this type of deal. What does having majority on the Condo ***. board actually give me. Can I prohibit say unnecessary expenditures? The other issue is my exit. This would be owner financed on purchase but, Is it difficult to get debt on it at some point down the road.

Thanks
Anthony

[Chris Seveney]

Quote from @Anthony Jentsch:

Hi BP, I'm looking at an out of state fractured condo deal. The deal is to purchase 13 units (already owned by an investor for 8 years) out of 84. Only 7 other units are owned by another investor and are rentals. The remaining 64 are individual owners.  The broker states the owner of these 13 would give you majority seats on the condo *** board. I have researched these types of deals a bit and see quite  bit of "stay away" "too complicated" etc. I have 2 major questions/concerns from anyone who has invested in this type of deal. What does having majority on the Condo ***. board actually give me. Can I prohibit say unnecessary expenditures? The other issue is my exit. This would be owner financed on purchase but, Is it difficult to get debt on it at some point down the road.

Thanks
Anthony

 If there are 84 units and you buy 13 how do you have a majority. Typically its one vote per unit? 

Regarding someone having that many units, it has its pros and cons. It scares off people when one person has too much control. Depending on the HOA docs, some things go to vote and some are board discretion so you would really need to read the bylaws.