Failure to Disclose HOA

[Josh Morgan]

Just bought a condo yesterday, upon closing it was disclosed that the HOA did not cover insurance (outside the studs) which is typically covered and is a substantial amount in the Texas Gulf Coast. Both the title company and realtors were unaware of this too.

Two questions: Do I have legal recourse? ( I know talk to a lawyer, lol). Should I just "flip" it.   I bought it for 77k and based on comps think I can flip it for 95K with no rehab.  What are the pros and cons? Currently I am looking at a Cap Rate of  7.3% and cash on cash of 6-7%.  My original numbers were Cap 9.3%, cash on cash 10-11%.