Hoa fee liens?

Question

The below auction sold property was a condo that had a lien from the condo assoc. of $8,456 there was a lis pendens filed on 5-1-12 by Fifth Third Bank. The property is worth around 70,000. I have no numbers on the mortgage loan and I was wondering how you buy this property not knowing the arrears on the mortgage?

Auction Sold

01/04/2013 10:52 AM ET

Amount

$8,500.00

Sold To

3rd Party Bidder

Auction Type:

FORECLOSURE

Case #:

522012CC003746XXCOCO

Final Judgment Amount:

$7,361.40

Parcel ID:

24-31-15-47313-000-1000

Property Address:

552 PLAZA SEVILLE CT 100

TREASURE ISLAND, 33706

Assessed Value:

$82,306.00

Plaintiff Max Bid:

$8,456.10

Account Closed · Answer

I saw this in the other thread. There are a couple of attorneys where I am that work for many of HOAs. They are the ones who advice the HOA when to foreclose. If they got a property back at sale, I think I'd have little chance of getting them to sell to me. They are very, very shrewd and not open to deal making. I have enough trouble just getting payoff amounts from them and getting them to release court cases. Now, if it was a smaller HOA without professional mgmt and collections, that would be worth a try.

Andy Mirza · Answer

Kristine Marie Poe Would you mind sharing how you're getting these "HOA leads" that you mentioned above? It sounds like you focus on just a few HOA's so maybe you're getting to know different players that give you leads from time to time...but I don't want to assume anything :)

Andy Mirza · Answer

Kristine Marie Poe I love NPN's as well and we co-own 4 NPN's with a full time note investor. I posted this on the other thread about HOA liens and I'd be interested in your response: "Every HOA seems to treat their properties acquired through HOA lien foreclosure differently. Some rent them out while others do nothing with them and wait until the bank forecloses. Given the latter response, I've approached the HOA management company in the community I live in with the idea of trying to buy any HOA foreclosed property from them that was a problem. They were pretty ignorant of possible solutions to HOA acquired property and appreciative to hear about other options that were available to them. Since HOA's tend to move slow, I'm still waiting to get an answer but I'm hopeful about the idea of approaching other HOA's about this. Has anyone tried something like this? Have any of you tried to buy directly from the HOA when it made sense equity wise or cash flow wise? Did you have any success?"

Andy Mirza · Answer

Thank you...

Account Closed · Answer

I market to properties with any distress I can think of. I recently added HOA liens to my list of distresses.

Account Closed · Answer

Thing is, the HOAs I'm working don't appear to be foreclosing and taking back anything they don't want. They've only have gotten a couple back at sale in the last few years. Those appear to be right at value now. I'm guessing the rents cover the HOA and mtg amounts so they are happy to have them until they can sell for more. HOA leads are doing well for me so I don't want to complain. But HOAs really do add another layer of issues and players to properties with plenty of other problems. I'm underwhelmed, to put it mildly, by the HOA attorneys and mgmt. companies.

Andy Mirza · Answer

@K. Marie Poe I think you're right in that it would be easier to do this with a smaller HOA or management company. Things are usually easier when you're dealing with the decision makers instead of the gate keepers. I wonder if those attorneys would respond to an offer of a finder's fee of a few hundred bucks if you could buy an HOA foreclosed condo. In cases where there was some kind of problem such as a rehab that was more than the HOA wanted to handle or a sticky owner/tenant/occupant situation where they didn't want to evict, I could see where investors like us could provide a solution. I think the trick is to market to directly to the decision makers (HOA boards) or the gate keepers that could positively influence the decision makers (attorneys, trustees, HOA management) but I'm trying to figure out what would be the best way.

Account Closed · Answer

I almost always buy from the seller. Except when I can buy a note. I love non performing notes.

Andy Mirza · Answer

This one had IRS liens, CA tax liens, and a Ford Credit lien against the previous owner and her mother who was on title before her. It was a mess! None of the regular title companies would insure it but my real estate attorney made a few calls to his contacts and found a larger, national title insurer that would insure title. If you don't buy the HOA liens at the trustee sale how do you buy your HOA properties? Directly from the HOA? The seller?

Account Closed · Answer

Thanks for the additional info. I'm no stranger to plain lucky. Buy it so it makes sense for the long haul. But sell it today if you get lucky. The HOA properties I've bought so far have all had multiple liens and distresses. Haven't bought one on the courthouse steps yet. I don't see that many foreclosing HOA liens here.