Potential Condo deal

[Mike Baker]

So I am in Montana, which is already "real estate challenged".

Here's the deal I'm looking at now, and I can't help but think I'm

missing something. 

I'm looking at 4 3/2 condos at 1552sft apiece. the owners are looking for $500000 for all 4 or $129000 apiece.

I think they are smoking crack, but that's another matter.

When my wife and I ran the numbers we came up with $40000 in rehab. when it was all said and done. I figured $66000 per door.

They have been trying to sell theses off and on for 3 years. Nothing in my area sits on th MLS for longer then 60 days unless it has real issues, and even then its rarely over 90 days before it sells.

The other thing is its in an HOA. I know the general consensus is that HOAs are from the devil, lol, but this one only has 2 members. one for the first 4 condos and 1 for the other 4.

The HOA currently has $2000 in it for upkeep and improvements (which are very much needed) and its only collecting $75 a month for dues.

Looking at the HOA, it looks to be bleeding.

Anyway, I have the idea to offer a master lease at $3000 a month for 3 years (it currently collects $3720). Do the upgrades and purchase the property for $264000 at the end of the 3 year period when I can get it appraised with the improvements.

Please give feedback. I can take the rough feedback as well.

Thanks in advance.