What Do Experienced Investors Look for When Reviewing Condo Docs

Question

Hey BP community,

I’m currently in escrow on a condo in Honolulu, and I just received the condo docs package.

I understand that these documents can make or break the deal, especially for investors, but I want to make sure I’m reviewing them with the right investor lens, not just as a buyer.

So I’m curious:

What do you (as experienced investors) focus on when reviewing condo docs? Or How do you handle them once you receive them?

• What are your top red flags that have made you walk away?
• What are acceptable “normal” issues that don’t bother you?
• Do you have any systems or checklists for reviewing them efficiently?
• How do you handle it if you find underfunded reserves or possible future assessments after your inspection period?

For context:

• I’m purchasing this as a fix & flip.
• It’s a trust sale, older building (1970s era Waikiki), and I’m financing with a hard money lender.
• We already completed our GC walkthrough — it’s a typical condo fixer, around $35–45K in renovations.

I’d really appreciate any insights from investors who have navigated similar deals — especially in older condo buildings or markets like Honolulu where AOAO health can significantly impact returns.

Thanks in advance!

Peter Mckernan · Answer

After awhile you get the hang at looking at them, but I also suggest you upload them to chatgpt or Claude Ai to review them and prompt them questions. That helps too!

Kwok Wong · Answer

@Peter Mckernan, @Greg Scott, thank you very much for you response, now, my question is if you have a condo under contract, do you review the condo docs yourself or go to an attorney or whoever understand the docs?

Peter Mckernan · Answer

The fix and flipping model in condos can be good and can be bad. As Greg said most do not do it since it is a harder with HOAs looking over your shoulder, or people within the HOA doing that and calling the HOA about your remodel.

Couple things:

1. See what the polices are on flipping, some are that you have to get approval from neighbors and HOA to do anything on the inside and out.

2. Is there litigation, if there is this is easy on going in and buying cash or HML. This hinders you on the sale even with conventional buyers due to their UW and lender

3. Lately a lot of condos have been unwarrantable due to a lot of different things which means again easy on the buy and hard on the sale because most people need to do a Non-Qm purchase 20% down, not all can do that.4. Non VA or FHA approved HOAs, this is another issue, the condo might be only able to get a conventional loan, and again limits the buyers coming in to less buyer options.5. Amount of rentals in the HOA, Fannie and Freddie requirement is 20% or less condos in the community can be owned by one single entity or person. Or need more money down, limits the buyer. 6. Another one is 50% of the condos need to be primary resident owners. If there are more then we are back into limiting the buyer pool.

7. Many more things to look out for, budget issues, assessments coming up, and HOA increasing dues

Many different things you need to be asking and reviewing!

Greg Scott · Answer

I'm not trying to burst your bubble.  Most experience investors do not buy condos.  The main reason is that the HOA controls a big chunk of how the deal will perform.  Experienced investors like to control as much of the deal as possible to eliminate unexpected problems.

That said, here are some issues I've hears other investor have had:

- Special assessments - Ask for the HOA financials to see whether or not they are funded appropriately

- Lawsuits - search for lawsuits against the HOA. These could make your eventual sale impossible.  Some lenders avoid lending to condo buyers if the HOA has a significant lawsuit

- Marketing restrictions - How can you advertise your property is for sale? When my wife sold her condo, no signage of any kind was allowed.  Everything was on-line only.

What Do Experienced Investors Look for When Reviewing Condo Docs

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