Sub 2 townhome for long term hold

2 Replies

We’ve put a 3/2 townhome under contract Sub 2. Assumed payments and rehab costs will comprise about 1/2 of what we’ll cash flow, which was the attraction.

Since this our first townhome rental, what do we need to be aware of please? We're having our attorney review the HOA / CCRs.

Originally posted by @Tom Murphy :

We’ve put a 3/2 townhome under contract Sub 2. Assumed payments and rehab costs will comprise about 1/2 of what we’ll cash flow, which was the attraction.

Since this our first townhome rental, what do we need to be aware of please? We're having our attorney review the HOA / CCRs.

Congratulations! Put aside two or three months of mortgage payments and other expenses for an emergency. That underlying loan has to be paid whether you have a tenant or not. Be aware that HOA's can have a "special levy" for roof or parking or other things that happen and they haven't been properly planned for. Some HOA's limit the amount of non-owner units in the community so make sure you are within those limits. Anything a renter does that costs money or problems to the HOA goes against your unit not against the tenant. Get your Homeowner's Insurance straight with the insurance company. They should know how to write the policy so that you are correctly insured. Be aware that there is a Due on Sale clause on the loan that you took over that you have violated and the lender can call the loan due if they learn of the transfer of ownership. Have a plan to payoff the loan if the loan is called. Now, go out and do another before you lose momentum.