Question for investors who flip condos or townhomes.
Most Popular Reply
Lender · Miami, FL · Member since 2024 · 37 posts · 15 votes
7moI've seen quite a few investors shift toward condos and townhomes for the exact reasons you're describing — lower entry price and often shorter project timelines. From deals I've seen come across my desk, a few patterns tend to show up:
1. Condos/townhomes can flip faster in the right market.
In many urban areas they move quicker because they appeal to first-time buyers and downsizers. The biggest factor that slows them down is usually HOA fees or financing limitations rather than the property itself.
2. HOA rules can affect renovation scope more than people expect.
Interior renovations (kitchens, bathrooms, flooring, paint) are usually fine. Where investors sometimes run into issues is with windows, exterior doors, plumbing stacks, or structural changes. It's always worth reviewing the HOA docs early so there are no surprises.
3. Financing can occasionally be the biggest difference vs SFR flips.
Some condo associations are non-warrantable, which can limit conventional financing for buyers. Things like litigation, high investor concentration, or low reserves can shrink the buyer pool. When that happens, the property may sit longer or buyers need alternative financing.
4. Duplex flips can work but typically sell to a different buyer.
You're often targeting investors or house-hackers rather than pure retail buyers. They sometimes sit a little longer, but strong rental numbers can offset that because buyers evaluate them more on income potential.
5. HOA red flags I usually look for when reviewing deals:
-
Low reserve funds
-
Recent or pending special assessments
-
Litigation involving the association
-
High delinquency rates
-
High investor ownership ratios
One advantage of condos and townhomes is that renovation scope is usually simpler, since you're mostly dealing with interior work and not roofs, foundations, or exterior structures.
The $10K–$20K profit range you're targeting is actually pretty common for these smaller flips, especially when investors are prioritizing faster turn times and lower capital requirements.
Curious if anyone here has noticed HOA fees starting to impact resale demand more lately in their markets?
14 Replies
- 7moFrank PyleBusiness MemberSpecialist · USA · Member since 2024 · 279 posts · 130 votes
Condos and townhomes can flip fast but the HOA and financing side is what really decides if the deal works. In a lot of markets they move quickly because the price point pulls in first time buyers, but the spread is tighter so you have to be disciplined on basis and rehab scope if you are only targeting a 10k to 20k margin. A quick check I use is simple. After purchase price plus rehab plus holding and selling costs you still want at least 12 to 15 percent of the resale price left as margin or the deal gets thin fast. With condos especially the two things that kill deals are HOA financial health and warrantability because if buyers cannot get conventional loans your exit pool shrinks overnight. I also assume limited layout changes and focus on cosmetics like kitchen surfaces, paint, lighting, and flooring that stay inside HOA rules.
What price range and HOA dues are you seeing on the condos or townhomes you are considering
If you want I can run a quick IEC style flip model on one of the deals to see if the margin really supports a small flip after fees, HOA costs, and resale commissions.
- 7moKevin IveyPro MemberFlipper/Rehabber · Marysville, WA · Member since 2020 · 216 posts · 126 votes
The condo fees can be a huge issue when you goto sell or rent as they directly effect affordability and in DSCR loans so I assume in mortgage payment computation it gets tossed in with Insurance and property taxes and the buyer's ability to. ake the payment so directly influences what you can sell for. Along with fears concerns regarding reserve funds and potential special assessment.
The bigger the complex seems the bigger the headache and usually a large management company.
Quote from @Kevin Ivey:
The condo fees can be a huge issue when you goto sell or rent as they directly effect affordability and in DSCR loans so I assume in mortgage payment computation it gets tossed in with Insurance and property taxes and the buyer's ability to. ake the payment so directly influences what you can sell for. Along with fears concerns regarding reserve funds and potential special assessment.
The bigger the complex seems the bigger the headache and usually a large management company.
Thanks Kyle! I am still trying to figure out what my next move is going to be after my Garland property wraps. I am considering this and or dabbling in bank homes; however auctions seems like a completely different animal.
- Investor · Pacific Northwest · Member since 2026 · 538 posts · 309 votes7mo
What I’ve noticed with condos and townhomes is that they don’t really behave like a typical flip where the renovation drives the outcome. The biggest variable tends to be who can actually get financing on the property.
Once a condo becomes non-warrantable or the HOA has weak reserves, the buyer pool can shrink overnight because a lot of conventional lenders simply won’t touch it. When that happens the deal effectively moves from a “retail buyer” exit to a much smaller pool of cash buyers or portfolio lenders.
That’s why I usually think about condo flips less in terms of renovation scope and more in terms of financing eligibility and HOA health:
• warrantable vs non-warrantable status
• reserve funding levels
• pending special assessments
• rental caps
• concentration of investor ownership
If those factors are clean, condos can move very quickly because the price point attracts first-time buyers. If they’re not, the spread can disappear pretty fast regardless of how nice the renovation looks.
Duplex flips are a different dynamic entirely — they tend to sell more like small income properties than retail homes, so the buyer pool shifts toward investors rather than owner-occupants.
Curious if other flippers here check warrantability and reserve health before even looking at renovation scope.
- Lender · Miami, FL · Member since 2024 · 37 posts · 15 votes7mo
I've seen quite a few investors shift toward condos and townhomes for the exact reasons you're describing — lower entry price and often shorter project timelines. From deals I've seen come across my desk, a few patterns tend to show up:
1. Condos/townhomes can flip faster in the right market.
In many urban areas they move quicker because they appeal to first-time buyers and downsizers. The biggest factor that slows them down is usually HOA fees or financing limitations rather than the property itself.2. HOA rules can affect renovation scope more than people expect.
Interior renovations (kitchens, bathrooms, flooring, paint) are usually fine. Where investors sometimes run into issues is with windows, exterior doors, plumbing stacks, or structural changes. It's always worth reviewing the HOA docs early so there are no surprises.3. Financing can occasionally be the biggest difference vs SFR flips.
Some condo associations are non-warrantable, which can limit conventional financing for buyers. Things like litigation, high investor concentration, or low reserves can shrink the buyer pool. When that happens, the property may sit longer or buyers need alternative financing.4. Duplex flips can work but typically sell to a different buyer.
You're often targeting investors or house-hackers rather than pure retail buyers. They sometimes sit a little longer, but strong rental numbers can offset that because buyers evaluate them more on income potential.5. HOA red flags I usually look for when reviewing deals:
-
Low reserve funds
-
Recent or pending special assessments
-
Litigation involving the association
-
High delinquency rates
-
High investor ownership ratios
One advantage of condos and townhomes is that renovation scope is usually simpler, since you're mostly dealing with interior work and not roofs, foundations, or exterior structures.
The $10K–$20K profit range you're targeting is actually pretty common for these smaller flips, especially when investors are prioritizing faster turn times and lower capital requirements.
Curious if anyone here has noticed HOA fees starting to impact resale demand more lately in their markets?
Quote from @Warren Ifergane:
I've seen quite a few investors shift toward condos and townhomes for the exact reasons you're describing — lower entry price and often shorter project timelines. From deals I've seen come across my desk, a few patterns tend to show up:
1. Condos/townhomes can flip faster in the right market.
In many urban areas they move quicker because they appeal to first-time buyers and downsizers. The biggest factor that slows them down is usually HOA fees or financing limitations rather than the property itself.2. HOA rules can affect renovation scope more than people expect.
Interior renovations (kitchens, bathrooms, flooring, paint) are usually fine. Where investors sometimes run into issues is with windows, exterior doors, plumbing stacks, or structural changes. It's always worth reviewing the HOA docs early so there are no surprises.3. Financing can occasionally be the biggest difference vs SFR flips.
Some condo associations are non-warrantable, which can limit conventional financing for buyers. Things like litigation, high investor concentration, or low reserves can shrink the buyer pool. When that happens, the property may sit longer or buyers need alternative financing.4. Duplex flips can work but typically sell to a different buyer.
You're often targeting investors or house-hackers rather than pure retail buyers. They sometimes sit a little longer, but strong rental numbers can offset that because buyers evaluate them more on income potential.5. HOA red flags I usually look for when reviewing deals:
-
Low reserve funds
-
Recent or pending special assessments
-
Litigation involving the association
-
High delinquency rates
-
High investor ownership ratios
One advantage of condos and townhomes is that renovation scope is usually simpler, since you're mostly dealing with interior work and not roofs, foundations, or exterior structures.
The $10K–$20K profit range you're targeting is actually pretty common for these smaller flips, especially when investors are prioritizing faster turn times and lower capital requirements.
Curious if anyone here has noticed HOA fees starting to impact resale demand more lately in their markets?
Thanks for replying! Stepping into flipping condos/townhouses is completely different for me.
Would I know when putting a deal together that condo/townhouse isn't warrantable? It sounds like more to learn in how SFH flipping is different from the above. Even with the HOAs, would this be upfront information that wholesalers are wiling to share?
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- Lender · Miami, FL · Member since 2024 · 37 posts · 15 votes7mo
Quote from @Kay Sam:
Quote from @Warren Ifergane:
I've seen quite a few investors shift toward condos and townhomes for the exact reasons you're describing — lower entry price and often shorter project timelines. From deals I've seen come across my desk, a few patterns tend to show up:
1. Condos/townhomes can flip faster in the right market.
In many urban areas they move quicker because they appeal to first-time buyers and downsizers. The biggest factor that slows them down is usually HOA fees or financing limitations rather than the property itself.2. HOA rules can affect renovation scope more than people expect.
Interior renovations (kitchens, bathrooms, flooring, paint) are usually fine. Where investors sometimes run into issues is with windows, exterior doors, plumbing stacks, or structural changes. It's always worth reviewing the HOA docs early so there are no surprises.3. Financing can occasionally be the biggest difference vs SFR flips.
Some condo associations are non-warrantable, which can limit conventional financing for buyers. Things like litigation, high investor concentration, or low reserves can shrink the buyer pool. When that happens, the property may sit longer or buyers need alternative financing.4. Duplex flips can work but typically sell to a different buyer.
You're often targeting investors or house-hackers rather than pure retail buyers. They sometimes sit a little longer, but strong rental numbers can offset that because buyers evaluate them more on income potential.5. HOA red flags I usually look for when reviewing deals:
-
Low reserve funds
-
Recent or pending special assessments
-
Litigation involving the association
-
High delinquency rates
-
High investor ownership ratios
One advantage of condos and townhomes is that renovation scope is usually simpler, since you're mostly dealing with interior work and not roofs, foundations, or exterior structures.
The $10K–$20K profit range you're targeting is actually pretty common for these smaller flips, especially when investors are prioritizing faster turn times and lower capital requirements.
Curious if anyone here has noticed HOA fees starting to impact resale demand more lately in their markets?
Thanks for replying! Stepping into flipping condos/townhouses is completely different for me.
Would I know when putting a deal together that condo/townhouse isn't warrantable? It sounds like more to learn in how SFH flipping is different from the above. Even with the HOAs, would this be upfront information that wholesalers are wiling to share?
You're right that condos/townhomes can be a bit different than SFR flips. A lot of the questions you're thinking about (HOA health, litigation, owner-occupancy, reserves, rental restrictions, etc.) are typically covered in the FNMA condo questionnaire that lenders request during underwriting.
That questionnaire usually gives a pretty good snapshot of the project — things like percentage of investor ownership, whether there’s any pending litigation, how the insurance is structured, reserve funding, and if there are any restrictions that could affect financing. So a lot of those answers end up coming out during that process.
From an investor standpoint, the main thing is just being aware that some condo projects are warrantable and some aren’t, which can affect the pool of buyers on the exit. But most of the key info tends to surface once the questionnaire and HOA docs are reviewed.
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Quote from @Warren Ifergane:
Quote from @Kay Sam:
Quote from @Warren Ifergane:
I've seen quite a few investors shift toward condos and townhomes for the exact reasons you're describing — lower entry price and often shorter project timelines. From deals I've seen come across my desk, a few patterns tend to show up:
1. Condos/townhomes can flip faster in the right market.
In many urban areas they move quicker because they appeal to first-time buyers and downsizers. The biggest factor that slows them down is usually HOA fees or financing limitations rather than the property itself.2. HOA rules can affect renovation scope more than people expect.
Interior renovations (kitchens, bathrooms, flooring, paint) are usually fine. Where investors sometimes run into issues is with windows, exterior doors, plumbing stacks, or structural changes. It's always worth reviewing the HOA docs early so there are no surprises.3. Financing can occasionally be the biggest difference vs SFR flips.
Some condo associations are non-warrantable, which can limit conventional financing for buyers. Things like litigation, high investor concentration, or low reserves can shrink the buyer pool. When that happens, the property may sit longer or buyers need alternative financing.4. Duplex flips can work but typically sell to a different buyer.
You're often targeting investors or house-hackers rather than pure retail buyers. They sometimes sit a little longer, but strong rental numbers can offset that because buyers evaluate them more on income potential.5. HOA red flags I usually look for when reviewing deals:
-
Low reserve funds
-
Recent or pending special assessments
-
Litigation involving the association
-
High delinquency rates
-
High investor ownership ratios
One advantage of condos and townhomes is that renovation scope is usually simpler, since you're mostly dealing with interior work and not roofs, foundations, or exterior structures.
The $10K–$20K profit range you're targeting is actually pretty common for these smaller flips, especially when investors are prioritizing faster turn times and lower capital requirements.
Curious if anyone here has noticed HOA fees starting to impact resale demand more lately in their markets?
Thanks for replying! Stepping into flipping condos/townhouses is completely different for me.
Would I know when putting a deal together that condo/townhouse isn't warrantable? It sounds like more to learn in how SFH flipping is different from the above. Even with the HOAs, would this be upfront information that wholesalers are wiling to share?
You're right that condos/townhomes can be a bit different than SFR flips. A lot of the questions you're thinking about (HOA health, litigation, owner-occupancy, reserves, rental restrictions, etc.) are typically covered in the FNMA condo questionnaire that lenders request during underwriting.
That questionnaire usually gives a pretty good snapshot of the project — things like percentage of investor ownership, whether there’s any pending litigation, how the insurance is structured, reserve funding, and if there are any restrictions that could affect financing. So a lot of those answers end up coming out during that process.
From an investor standpoint, the main thing is just being aware that some condo projects are warrantable and some aren’t, which can affect the pool of buyers on the exit. But most of the key info tends to surface once the questionnaire and HOA docs are reviewed.
@Warren Ifergane That's really helpful! I will surely be looking out for the FNMA condo questionnaire then. I had not idea where to start looking.
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- Lender · Miami, FL · Member since 2024 · 37 posts · 15 votes7mo
Quote from @Kay Sam:
Quote from @Warren Ifergane:
Quote from @Kay Sam:
Quote from @Warren Ifergane:
I've seen quite a few investors shift toward condos and townhomes for the exact reasons you're describing — lower entry price and often shorter project timelines. From deals I've seen come across my desk, a few patterns tend to show up:
1. Condos/townhomes can flip faster in the right market.
In many urban areas they move quicker because they appeal to first-time buyers and downsizers. The biggest factor that slows them down is usually HOA fees or financing limitations rather than the property itself.2. HOA rules can affect renovation scope more than people expect.
Interior renovations (kitchens, bathrooms, flooring, paint) are usually fine. Where investors sometimes run into issues is with windows, exterior doors, plumbing stacks, or structural changes. It's always worth reviewing the HOA docs early so there are no surprises.3. Financing can occasionally be the biggest difference vs SFR flips.
Some condo associations are non-warrantable, which can limit conventional financing for buyers. Things like litigation, high investor concentration, or low reserves can shrink the buyer pool. When that happens, the property may sit longer or buyers need alternative financing.4. Duplex flips can work but typically sell to a different buyer.
You're often targeting investors or house-hackers rather than pure retail buyers. They sometimes sit a little longer, but strong rental numbers can offset that because buyers evaluate them more on income potential.5. HOA red flags I usually look for when reviewing deals:
-
Low reserve funds
-
Recent or pending special assessments
-
Litigation involving the association
-
High delinquency rates
-
High investor ownership ratios
One advantage of condos and townhomes is that renovation scope is usually simpler, since you're mostly dealing with interior work and not roofs, foundations, or exterior structures.
The $10K–$20K profit range you're targeting is actually pretty common for these smaller flips, especially when investors are prioritizing faster turn times and lower capital requirements.
Curious if anyone here has noticed HOA fees starting to impact resale demand more lately in their markets?
Thanks for replying! Stepping into flipping condos/townhouses is completely different for me.
Would I know when putting a deal together that condo/townhouse isn't warrantable? It sounds like more to learn in how SFH flipping is different from the above. Even with the HOAs, would this be upfront information that wholesalers are wiling to share?
You're right that condos/townhomes can be a bit different than SFR flips. A lot of the questions you're thinking about (HOA health, litigation, owner-occupancy, reserves, rental restrictions, etc.) are typically covered in the FNMA condo questionnaire that lenders request during underwriting.
That questionnaire usually gives a pretty good snapshot of the project — things like percentage of investor ownership, whether there’s any pending litigation, how the insurance is structured, reserve funding, and if there are any restrictions that could affect financing. So a lot of those answers end up coming out during that process.
From an investor standpoint, the main thing is just being aware that some condo projects are warrantable and some aren’t, which can affect the pool of buyers on the exit. But most of the key info tends to surface once the questionnaire and HOA docs are reviewed.
@Warren Ifergane That's really helpful! I will surely be looking out for the FNMA condo questionnaire then. I had not idea where to start looking.
Yeah, that should cover you. It's the strictest of questionnaires lenders ask for to see if a condo is warrantable. Most lenders should accept it. I know we do.
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I haven't started looking yet & running deals for condos or townhomes. Wrapping up the sfh right now & still inspection period so🤞🏽.
This whole arena would be new to me just as sfh flipping has been. Have you seen a particular area that is moving townhomes & condos right now? Have you personally noticed that HOA fees are affecting resale?
Kay, condos and townhomes have different exit curves than SFRs, and that changes your whole acquisition strategy. The good news: they often move faster in the right submarkets. The bad news: HOA restrictions and financing can kill your timeline fast.
On timing -- yes, condos flip faster in urban/suburban markets where first-time buyers cluster. But that speed premium only works if the HOA isn't a disaster. Any association with high investor concentration, litigation, or low reserves suddenly becomes harder to finance for your buyer. You end up with a property that would've moved in 90 days sitting at 150+. That turns a 5k profit into 0k after carrying costs.
Duplexes are a different animal entirely. You're not selling to owner-occupants -- you're selling to investors or house-hackers evaluating on cash flow and numbers. They'll wait longer if the deal pencils, but they also won't overpay. That 0-20k profit target on a duplex requires buying really clean on price. If you're paying 75% ARV on a duplex flip, you're leaving money on the table.
HOA red flags: focus on special assessment history, not just current reserves. One big assessment can tank the value. Also check how many units are owner-occupied vs investor-owned. Above 50% investor ownership and your buyer pool shrinks.
Are you currently underwriting duplexes and townhomes at the same spread as your SFR flips, or do you adjust for the longer exit timeline and smaller buyer pool?
Quote from @Bo Smith:
Kay, condos and townhomes have different exit curves than SFRs, and that changes your whole acquisition strategy. The good news: they often move faster in the right submarkets. The bad news: HOA restrictions and financing can kill your timeline fast.
On timing -- yes, condos flip faster in urban/suburban markets where first-time buyers cluster. But that speed premium only works if the HOA isn't a disaster. Any association with high investor concentration, litigation, or low reserves suddenly becomes harder to finance for your buyer. You end up with a property that would've moved in 90 days sitting at 150+. That turns a 5k profit into 0k after carrying costs.
Duplexes are a different animal entirely. You're not selling to owner-occupants -- you're selling to investors or house-hackers evaluating on cash flow and numbers. They'll wait longer if the deal pencils, but they also won't overpay. That 0-20k profit target on a duplex requires buying really clean on price. If you're paying 75% ARV on a duplex flip, you're leaving money on the table.
HOA red flags: focus on special assessment history, not just current reserves. One big assessment can tank the value. Also check how many units are owner-occupied vs investor-owned. Above 50% investor ownership and your buyer pool shrinks.
Are you currently underwriting duplexes and townhomes at the same spread as your SFR flips, or do you adjust for the longer exit timeline and smaller buyer pool?
I haven't yet started evaluating deals for condos/townhouses because I haven't found any deals yet. I'm also exiting my Garland SFH deal right now; hoping it wraps by 4/6. I'd like to view real numbers in the meantime in order to see how to structure the condo deals.
I am also trying to figure out what market to target. I've been told to focus on 1 market at a time. Therefore, trying to see if it's best that I stay focused in DFW, Tampa or circle back to Chicago. I'm leaning towards DFW.
There's a lot to consider as I recalibrate.
- Investor · Nashville · Member since 2026 · 37 posts · 11 votes7mo
Good questions. I've noticed condos and townhomes can move quickly when priced right, but the HOA side definitely adds more variables to look at. Things like reserves, special assessments, and rental caps seem to play a bigger role than many people expect. I'd also be curious how often financing issues come up with certain condo associations.
The FNMA questionnaire is helpful but it comes up during underwriting. By then you're already under contract. For condos specifically, worth requesting these before you make an offer:
1. Reserve study: check percent funded. Under 30% is a red flag for most lenders. Under 10% and an assessment is likely already coming. Takes 10 minutes to find in the document.
2. Investor ownership ratio: the property management company usually knows the current number.
3. CC&Rs: rental caps and owner-occupancy requirements are in here. Tells you if your buyer pool is already constrained before you own the property.
None of this requires waiting for a lender. You could ask for it before your offer so you can price the risk in, or walk, before you're committed.
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