Investor · Tampa, FL · Member since 2021 · 33 posts · 17 votes
Hi ALL,
I feel pretty sufficient analyzing the purchase of an apartment from going through the financials and physical aspects of due diligence. However, I’ve never bought a condominium apartment that’s being sold in pieces (IE. 40 out of 220 units).
It is my understanding that the HOA must be carefully analyzed. This has help me back and I feel like I may be missing opportunities by not getting myself well versed in this area.
Where could I get myself educated in this area? I would like to overcome this obstacle.
Again, if we're taking about a non condo multifamily purchase, I have no issues. The HOA analysis is what has me a bit scared from moving forward.
This is a tough one, would definitely recommend to consult an attorney. As for HOA's in general, the risks are you don't have controlling vote with 40 out of 220. Special assessments are always a risk especially with owning a large number of units. My experience with HOA's is that most of them are largely inefficient in controlling expenses and managing capex.
I would only touch condos if you were getting an absolute screamer of a deal - versus buying an entire multifamily building.
That's exactly my thoughts. I rather stay away unless, there is an opportunity that makes sense and there is controlling opportunities with the HOA. Thanks.
We try to get a copy of their latest budget and reserve study. This gives a good clue about the financial management of the project and whether there will be special assessments due to underfunded reserves. Have your Realtor inquire with the seller's to see if they have these documents prior to making an offer. Otherwise you can get them post offer acceptance but usually have to pay for them. Also want to make sure you can operate your intended types of rental there. No caps on rentals, minimum rental length, etc.