There are different schools of thought on investing in condos so I’d love perspectives on this deal that looks amazing on its surface… until I found the "gotcha"

Background: I'm looking for my second investment property. My first was building an airbnb in our basement, so I haven't yet had the experience of analyzing and actually purchasing a secondary property. I've been obsessively practicing using the BRRRR calculator and finally came upon this deal that seemed like my golden "first deal" ticket.

The property: It's a bank-owned 3br/2.5 ba condo in an upscale suburb of Portland, OR. It needs cosmetic work to the point where it shows terribly (busted counters, decrepit fixtures, terrible flooring and paint, etc.). But, the schools are all 10's! The HOA has an onsite pool and access to an exclusive neighborhood rec center with legit gym, free fitness classes, childcare, kids pool, lap pool, party space, etc.

The deal: It's listed for $170k. The same floor plan is selling for around $230-$240k in the same complex. HOA dues listed as $509 (seemed high, but numbers still checked out). Rent comps for 3br condos/apartments in the area range from $2100 (slightly lower rated schools and no access to exclusive rec center) to $3000. My plan was to make a cash offer of $160k, put $10k into cosmetic updates, rent for ~$2300 (conservative estimate, more if possible), and refi hopefully at an ARV of ~$225k. The numbers on that plan look pretty attractive and I'd pull out more than I put in!

My agent called the listing agent and that's where things got dicey. He mentioned that the HOA dues just went up and recent buyers were obviously upset, some trying to offload their recent purchases. But he said it used to be $226 and $509 was the new amount. He said they were having consistent showings but no interest because it looks terrible and most of the folks coming through were FHA and turned off by the amount of work needed. He said he would happily entertain any offer.

I was so enamored with the numbers that I had planned to go see it in person this week and then make my offer. However I've always hated the idea of HOAs and feeling like I'm essentially renting my property, so I started digging into all the HOA docs (as of course any investor should), and fell down the rabbit hole of the HOA website. Turns out the listing agent was wrong and the HOA just issued a special assessment, which will raise the dues in 2020 from $509 to… $785!! It's to cover a 20-yr bank loan needed to complete a $8.5M dollar project to replace all siding (there's been a water problem), stairs, decks and sliding doors on all 125 units. Further, the original bids for the project were coming in at around $15M, but eventually they got one contractor down to $8.5M, which is the estimate the special assessment increase is based on. A recent letter to owners from the HOA said $785 is just an estimate and couldn't legally be relied on for sales/purchases of the condos. And we all know how likely it is that the project doesn't (gasp) go over budget!

So my questions are:

• 1. Is this a great example of why you shouldn’t buy condos? The potential for special assessments can ruin your investment.
• 2. Even with the high HOA dues, it has the potential to cashflow at least $111/mo, and maybe more if I can charge higher rent based on comps. Does that mean I should still consider it? If I can refi at an ARV of even just $213,500, I'll still have pulled all my own cash back out.
• 3. Should I be scared of an ongoing project of that scope being done around my rental?
• 4. How big a hit is an HOA fee of $785 on resale value?
• 5. How much do you love or hate condos as investments?

Thanks for any and all feedback/insights.