Finally introducing myself ......and what would you do?
Hello All,
My name is Alicia Holsey and I'm a brand new investor in the Philadelphia area. I am looking to mostly buy and hold with the occasional flip and I'm currently searching for my first deal. Before I get into the meat and potatoes of my post, I want to thank everyone here for their advice on all the forums, I've spent the greater deal of the last few months soaking up all that BP has to offer and it has been amazing!
I am currently performing my due diligence on a 3/1 condo that I found on an auction site in Norristown. I've visited the property and repairs are minimal, only including new appliances, fresh paint, and carpeting. I plan to use the BRRR strategy. Here are the numbers:
All in (Purchase Price + Repairs): $55k
ARV: $75k
Estimated Monthly Rent: $1450/month
HOA Fee: $225/month
Taxes: $2500 annually
CapEx: $145/month
Property Management: $145/month
Vacancy (5%): $75/month
Insurance: $100/month
Estimated Monthly Cashflow After Refi: $250/month
NOI: $9040/yr
Cap Rate: 12%
The problem that I'm having with the property is that I am unable to speak directly with the property management company and HOA to confirm that the unit can be rented. I've left several messages and emails with the management company with no response. I've also tried getting in contact with the HOA directly, however the information I received is incorrect. Mysteriously, the auction house has somehow been able to get into contact with the HOA and property management company on several occasions and has confirmed that the unit can be rented. While I think this condo would be a great deal, I think it's strange that the listing agent is able to contact the HOA and property management company with no problem and I can't even get a simple call back. As a last resort, I asked the auction house for a copy of the HOA bylaws and she told me that there's a $275 fee for a copy which I think is a bit ridiculous.
I'm concerned that if I go forward in purchasing the property, it would be difficult to reach management to get things done that are covered by the HOA fee or worse not be able to rent the unit on day 1.
Would you trust the auction house and move forward in this deal or would you run as far away as you can?
Thanks for your advice and sorry for the long post.