$120k condo > 1600 rent > $350 HOA > +/-35% Cash on Cash ROI...

[Benedict Feole]

Hello, 

Crushing on a property in Georgia, a one-bedroom condo in an attractive community. RE broker says no red flags...the ROI seems too good to be true.
I heard on a BPRE podcast that the hosts walk away from any deal where the HOA fees are over ~$75/month, but maybe they weren't referring to condos, but homes.

The HOAs include a dock, a gym, a clubhouse, trash, pest control, grilling area, a pool, and more. 

Selling for $120k. Zillow estimates rent income around $1600. And BallparkDeal gives me a 35% COC ROI.

Any thoughts/feedback on making a one-bedroom condo my first RE purchase? I live and work in NY. 

Thanks and excited to be here! 🎉

[Benedict Feole]

Quote from @Matt M.:

I stay away from anything with a HOA. Wait til there's a "special assessment" and your monthly goes to $700… still a killer deal? Hard pass

Re-crunched the numbers > -3.4% ROI (-$75 cash flow per month). Sigh.

HOA: $370/month
Taxes: $58/month
Vacancy: 5%
CapEx: 5%
Insurance: $61/month
Interest rate ~4-5% 
Prop. mgmt: $1200 (one-time fee)
Rent: $1200/month (up 30% from last year)
Price: $115k

Rentals allowed. Renters can use facilities. Five minutes from a university. Has a nice pool, boat landing, club house, palm trees, porch. 

On Redfin for 7 days. 1 bedroom/1 bath. Will pass.