Buying a Foreclosed Condo

[Matt Frey]

Hi there,

I am new to the community and still haven't invested in any real estate yet. I am just wondering what everyone's thoughts are on investing in condos? What caveats should I be aware of? I know that condo fees can rise over time and that if major repairs are needed, the Board can ask for this money with relatively short notice.

I had viewed some condo units before and there had been a levy fee of $20k, for repairs and unit upgrades. This deterred me from purchasing the unit and had changed my opinion on Condos as rental property, but I still feel there is potential for these types of rental properties.

I have been eyeing a few up and have reached out to an agent with some listings of foreclosed condos in Edmonton, AB, Canada. I asked for some more information regarding the reserve fund but I was informed that I needed a pending offer to obtain that information. Is there another way to obtain it, and should I contact the Condo Board directly?

Also, should I get general liability insurance if I obtain the property or would the Condo Board have some form of insurance in place?

[Jonathan Greene]

@Matt Frey, most condo associations should be willing to tell you if there are any pending assessment or lawsuits against the association. Where I am, the full documents cost less than $100, basically copying fees, but I wouldn't get into it unless you are really interested. I actually like condos for a first-time investment because the risk of loss is lower than a single family because you are not responsible for foundation, roof, windows, decks, stairs and many other things that can drive your first single family into the ground. You aren't going to generate a huge spread on a condo with the HOA fees, but if you go in planning to hold long-term and you get a good deal in an up and coming area it can be a great way to park your money for several years with less risk.