Looks like I am joining the sub30 club. Everyone cringe.

[Anna Buffkin]

After over a year long hiatus, I back at it.  My excuse, surprised and blessed with twins.

New investors look away; experienced investors have a strong drink for me.  I'm looking into buying a second sub $30k condo.  I purchased a 2/1 for $18k a few years back.   

I am looking to buy a $20k 3/2 in Columbia, SC. The condo itself appears to be in good condition. The owner is selling due to an appearant seller financing deal cautionary tale. I heard this from another unit's property manager, so I am a little fuzzy on the details, but basically, the owner financed to the former tenant. He had to foreclose on the purchaser. The HOA then tries to foreclose on him as the dues were apparently years in arrears. After legal fees, back HOA fees and property taxes, he just wants out. To add insult to injury, the HOA apparently foreclosed on 4 units which is driving down his selling price.

Based on a local property manager, similar units rent for $850 per month.

Anyway, my biggest concern is the HOA. They changed HOA management after several years of poor management. I want to check their financials before officially pulling the trigger.

I'm in South Carolina, so appreciation is not a major factor.  The condo is a C+ building in that it is older (1974) but in a desirable location. The area has gotten better around it.

I also have 3 single family homes in desirable locations that help spread the risk.

Other red flags?

[Paul Halphen]

All the things you mentioned are points of due diligence, but not hard stops.  850/mo seems on the high side for Columbia for a C- apartment, but possible. 

If it were me...

1) Gotta get the actual HOA story. Feel them out quantitatively and qualitatively. Bad HOA is a nightmare. Talk to the HOA. Are assessments going up/down. Deferred maintenance in the property? Find another owner or two and talk to them. An independent PM works too. Read the public foreclosure filings. Talk to an attorney who worked against the HOA.

2) Hard diligence on the rent # and HOA dues #. Section 8-able?

Other than that, could be a strong deal. The acquisition story seems reasonable enough.