All Forum Posts by: Steve Racicot

How is this a good deal?  Yes the numbers work but the neighborhood and location is not.  What is your plan to clean up this drug house?  Can you even insure the buildings with that activity going on? 

I can understand why the bank has said no. 

It would be a hard sell to the underwriters and bank to "convince" them that your current home is turning into a "rental" and this new home will be your primary residence.  

How would you be able to prove it? 

I would like to hear a successful story of someone actually taking cash from the credit lines.   This is the piece that seems to be missing for me...

Bring on another partner.  How much are each of you contributing to the deal?   

Sounds like they are trying to sell you something....

@Haresh Patel Get a copy of the budget, and 2 years of Financials. That should tell you what is going on at least financially. If 28% of the community of 50 Units (14 Units) are late or not paying their HOA Fees, then that is a potential problem. After you have the financials, you should attend an HOA meeting or even reach out to the Board to find out what they are doing to resolve the issue. The property Manager may provide you some insight as well.

Do your due diligence, and get documentation or it could cost you lots of $$ in the future, if things need repairs, etc.   

@Janeen Archer Would you be able to cover the Mortgage on the Condo and your Rent in the same month, if you don't have a renter for your Condo?

if you focus on the deal, the state really won't matter much. 

You can hold the property in the name of the LLC but the mortgage will be in your personal name. Banks dont like lending to LLCs.

@Jason Sterling These are very good questions.   Did you reach out to the Property Manager with these questions?   Also, did you get a copy of the insurance policy declaration (usually it is a 1 page summary). You should find out the specifics of the lawsuit?  You will be then be able to determine if you got a good deal.  Did you get financials (2 previous years and current budget)? This would also tell you the financially stablity of the association, as it seems from your questions, you dont know. 

Normally, the HOA will have insurance to cover most damage minus the deductible, assuming the BOD and Property Manager are on top of things (which unforunately is rare these days).

If the association would lose the lawsuit, and it was not covered by their insurance, then the BOD is more likely to special assess each unit to resolve the debt.