Hello wholesalers, I'm surrounded by condos. Would anyone be kind enough to give me a couple of pros and cons on wholesaling condos?
I'd say probably the main difference is that condos are usually cheaper than houses. Resulting in a lower fee for you. Also, typically they don't sell as fast. Of course, those are simply general statements and can vary depending on your market.
Otherwise, the process is the same and at times easier because it's easier to get comps on condos.
Thanks Roland, I wasn't sure if I'd run into issues with the associations or if the amount of equity would be lower overall. I'm in Chicago where the average condo is 350 to 400k and there's a lot of them! I also know the market well from regular broker deals.
@Michael Tootelian with any wholesale deal as long as the numbers work it will sale fast!! Condos on the Northside, especially without rental caps, will sale fast.
Not at $350k tho.. more so under $150k
If there are rental caps and/or home occupy requirements that will definitely delay a sale.
Throwing in my 2 Cents -
From a lending perspective, it's important to understand if the condos are warrantable or non-warrantable. It is much harder to lend against non-warrantable condos, which means that there is a much smaller potential buyer pool for them.
So, I'd think that it would follow then from a wholesaling perspective, one would be much more wary of non-warrantable condos as it will be more challenging to find potential buyers (in theory). Obviously, there is a lot more to think about than just this, but it is a factor to consider.
Here's a link to an article discussing this issue:
Hi @DeWitt Gibson , I've just started to learn about wholesaling and stumbled across this thread re: condos. Quick question...if @Michael Tootelian is planning to assign the unit to a cash buyer who doesn't require a mortgage, does that circumvent any issues related to warrantable vs. non-warrantable condos?
Hmm if the buyer pays cash and intends to rent the condo, it seems like warrantable vs. non-warrantable becomes irrelevant; however, if the buyer intends to fix/flip the condo, I could see where it may become problematic because the next buyer may have difficulties getting a mortgage. Is that what you're saying? Do I understand correctly?
Thank you, sir!