Resurrecting an HOA

4 Replies

Over the last year I've been busy with a townhouse community, the place was picked apart by investors years ago, then slummed out. Fast forward to today, and I've been buying batches of units, while all along knowing there was an dormant HOA lurking out there. I've tracked down the attorney who formed it so I can get copies of paperwork, plus legal advice, and I've talked to a few home owners that expressed interest in restarting the HOA. 


I think it's a good thing, as I know some investors are so far under water, or just to hard headed to know their properties is not worth what they think it is, so they wont stop slumming till someone forces their hand or they go under. I'm thinking it would be in the best interest for the community, and my investment.

The kicker is that I have 60% control of all properties in the HOA, thus I have a 60% voting right which I think means everything is my way or the highway type deal. I'm not looking to do anything to crazy, just enforce the removal of broken down cars, landscaping, trash pickup, and condition of homes on the outside. 

From what a few owners have told me, all the "landlords" refused to pay the HOA dues years ago, so things fell apart. I'm thinking we restart the HOA, update rules, enforce them, fine those who do not comply, then foreclose on those who refuse to comply, and continue to slum the area. I know that's a little aggressive in that context, but there needs to be leverage, especially when the property values could be double if not almost triple if everyone got their act together.


What are your thoughts on all this, or issues I should think about when moving forward with kickstarting the HOA again? 

@Levi T. I am da professional manager of an HOA. I would start by getting as much buy-in as possible from other owners. Then carefully read the original docs. Odds are they are outdated. Define what you as owners want from the HOA (enforcement, repairs, etc.). This kind of thing can wear out volunteers pretty quickly, so if you can afford to hire out some of the work do so. Then, transparency! Connect with all property owners as best you can and lay it out - and keep up the communication. They bought an HOA when they bought their units - so that argument doesn't fly - but you'll face resistance and need to have "positive" comebacks.

Originally posted by @Levi T. :

Over the last year I've been busy with a townhouse community, the place was picked apart by investors years ago, then slummed out. Fast forward to today, and I've been buying batches of units, while all along knowing there was an dormant HOA lurking out there. I've tracked down the attorney who formed it so I can get copies of paperwork, plus legal advice, and I've talked to a few home owners that expressed interest in restarting the HOA. 


I think it's a good thing, as I know some investors are so far under water, or just to hard headed to know their properties is not worth what they think it is, so they wont stop slumming till someone forces their hand or they go under. I'm thinking it would be in the best interest for the community, and my investment.

The kicker is that I have 60% control of all properties in the HOA, thus I have a 60% voting right which I think means everything is my way or the highway type deal. I'm not looking to do anything to crazy, just enforce the removal of broken down cars, landscaping, trash pickup, and condition of homes on the outside. 

From what a few owners have told me, all the "landlords" refused to pay the HOA dues years ago, so things fell apart. I'm thinking we restart the HOA, update rules, enforce them, fine those who do not comply, then foreclose on those who refuse to comply, and continue to slum the area. I know that's a little aggressive in that context, but there needs to be leverage, especially when the property values could be double if not almost triple if everyone got their act together.


What are your thoughts on all this, or issues I should think about when moving forward with kickstarting the HOA again? 

@Eric D or @Eric D. (no nonsense landlord ) did something similar to cleanup the couple HOA's he owned in... (https://www.biggerpockets.com/users/edrenckh )

@Dumitru Anton go for it. We have helped HOA's as professional management to get them cleaned up. Get as many other owners on board to start. At the end of the day the other owners will buy into the plans of the majority or they will sell or you can even for close on them. After these happen, the assessments should be paid through escrow.

Hire a good manager to help you. If you want to do it yourself there is lots of good info online to help as well as local associations. Here are two:

https://how2hoa.com/how-2-self-manage-your-hoa-a-helpful-guide-%EF%BB%BF/

Https://caionline.org

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