I see a lot of people talking about buying and holding condos and all the issues with it but I don't believe I have seen anything about flipping a condo? I have recently found one in foreclosure and all other units of same size have sold for significantly high compared to the lowest bid. Seems worthwhile...
condos canbe good deals but be careful not to "over improve " yours all of your comps will most likely be mirror images of yours in the same building or complex. Also check on your lenders for your potential buyers some institutions will not lend on condos if they are not a "prime" area.
But anything at the right price you can make money on or hold it and generate cash flow.
Keep in mind there are often additional in and out transaction costs with most condos, like move-in and out fees, alteration fees (if you're renovating, etc, which can add up. You also need to take into account the common charges or HOA fees that will add up while you're holding the condo. But like Joshua said, if you can buy it at the right price, the numbers could work out.
212‑688‑1000 | http://rutenbergnyc.com | NY Agent # 10401216147, NJ Agent # 1643469
Hi Will. Condos as a category can be a perfectly viable flip opportunity. Like all potential investments, do the best you can crunching the numbers to see if it makes sense. From the prospective of a Real Estate Broker and an Investor, there are a few cautionary points I want to bring up.
Condo Flips - things to consider:
1. The HOA is critical to the success of a flip. You'll need to check with the Home Owners Association and see if there are issues and/or expenses with short-term ownership. Some HOA's will have move-in/move-out fees that can run into the hundreds (at least) and possibly thousands of dollars. That needs to be factored into your calculations.
2. Once you come up with the home improvement/repair list for the unit, check with the HOA to determine: a) which ones need their approval. b) which ones need neighbor's approval. c) what the timeline is for applying for approvals.
3. Get the Resale Certificate, and check HOA meeting minutes, where they compared to plan for their Reserve Study, and any possible projects in the short term. Read, reread, and ask questions about possible assessments for the complex. Even if there's no assessment TODAY, look through the recent minutes and ask people about projects coming down the line. Property managers may only be required to disclose documented assessments today, and not disclose what everyone at the complex knows will be coming in a couple months. If there is one, it's not necessarily a deal breaker, but needs to be factored in to your decision-making.
4. Does the HOA require owner occupancy? That may be a deal breaker for you, unless you can be creative. Or, sometimes an HOA may require owner occupancy for a fixed period of time (like 1 year) before it can be sold or rented. There are all kinds of weirdness that can be found in HOA rules, so you need to be aware and through when you check them out.
Hope this helps. Good luck!
You must be a BiggerPockets member to post on the forums
Join the world's largest, most open Real Estate Investing Community online, 100% free forever!