Originally posted by @Michael S.:
@Ankit Garg - interesting feedback from the bank on this - I understand the HOA finances concern by the bank - I do not really understand their concern with the owner occupied number of condos though - I wonder if that is unique to the bank you talked with.
We have not gone the route of investing in condos, as the HOA fees can sometimes be prohibitive to making the numbers work.
For banks, in general, historical data suggest that owner occupants are more likely to value and protect their property in addition to having a perceived higher vested interest in managing the HOA properly. A high percentage of investors in a given project can be viewed as a higher risk for mis-management of the HOA and/or likelihood of numerous owners walking away from the investment entirely if values dip.
Doesn't seem like this will be the case in Huntsville anytime soon but good to see underwriting standards are in place despite the competitive market.
