BRRRR strategy with townhomes?

[Tyler Smith]

Has anybody applied the BRRRR strategy with a townhome or condo? There are way more in my price range and in running the numbers I can get way closer to the 1% rule with a townhome or condo in the Seattle area than I can with a SFR, with that said I know the HOA can change their dues and rules at will which can totally make or break an investment. But I'm guessing things like capx would be much lower due to the fact that the HOA covers the big expenses? I would love to hear from somebody who has experience with something like this!

(with rehab I mainly mean update. Floors, appliances, cabinets ect..)

[Patrick Britton]

@Tyler Smith You might want to think about condos outside of Seattle, or even outside of King CO. And quite frankly, HOAs and their fees are so poorly understood it's no wonder most people avoid them. Simply, the HOA amount doesnt matter. All that matters is what the HOA fee pays for. With single family detached homes you have utilities. Very often, HOA fees pay for water/sewer, garbage, gas, lawn maintenance, snow removal, etc. Within the HOA fee is also an amount that goes to the condos reserve requirement. There's no force savings account with a single family detached, that's up to the owner. Having a forced savings account is hardly a bad thing.

And let's also look at some of the rarely foreseen expenses with a detached home - lawn care.  Most people dont realize how time consuming lawn care can be.  This is time one could spend elsewhere doing something much more valuable.  And hiring a landscaper to maintain can be very costly.  

So yeah, condos have HOAs and monthly fees. You are the one who will have to decide if the fee is worthwhile. A refusal to buy a condo simply because of an HOA is poor decision making.

And last but definitely not least, it's worth mentioning that median sales prices for condos in Seattle area have increased just as much as single family detached since 2015.  So here's an investment that has a much lower cost of entry, providing just as much appreciation, and is less maintenance.  

I think looking at BRRRR for condos and townhouses can be a very smart avenue. But yes, it will require a little more homework