Newport condo cash purchase

[Matthew Pagos]

Investment Info:

Condo fix & flip investment in Newport.

Purchase price: $60,000
Cash invested: $65,000
Sale price: $165,000

It was a bank owned condo with a list price of $65K. The condo association was a mess so we knew it wouldnt qualify for traditional financing. Closed within 30 days. Put $5K into it, mainly replacing the kitchen cabinets, refinishing the floors and painting. Cleaned up the condo association (put a lien on owners who hadnt paid dues in years) and fixed up the exterior a bit. Pulled the equity to buy another condo in newport. Sold this condo for a nice profit after 6 years.

What made you interested in investing in this type of deal?

The price was to go to pass up despite the work that needed to be done with the condo association and the condo

How did you find this deal and how did you negotiate it?

Found this deal thru homepath

How did you finance this deal?

Cash and then went to a credit union to get a commercial loan

[Matthew Pagos]

@Robin Krieb One of the condo owners fell into financial difficulty and fell significantly behind on his dues (thousands of dollars). At times there was a negative reserve balance with the property manager fronting the association funds to pay certain bills until next months dues were collected. Anyways, this had a significant impact on all owners as it would be difficult to sell to a buyer with traditional financing if there were no reserves. By the time we bought our condo the delinquent owner had gotten back on his feet financially but wasn't making up for the back payments. This was only a 4 member association and the other members were a bit timid. They used the "pay when you can" approach prior to our purchase and it seemed as the though the owner was taking advantage of this. We did our research and found that a condo association would have a priority lien for back condo dues. So we forced the association to have a lien filed against the owner for the back fees. Well wouldn't you know it......the delinquent member paid off all his past dues within a year. This allowed the condo reserves to get to a sufficient level and we also had additional funds to do exterior work to the building.