All Forum Posts by: Mike Lawt

Thanks again for the input, very helpful. @Chris Seveney

@Chris Seveney could you help me understand what kind of discount I should expect to see due to the condos being non-warrantable and not qualifying for conventional financing? Two years ago one of the condo units in the complex was foreclosed upon and sold for less than half what I would expect to see. I was told that the ower of the unit was behind on taxes, HOA fees, and the unit was in disrepair. Five years ago there was another foreclosure sale at a similar discounted price. My lender is concerned that the units will not appraise for the purchase price. When looking at recent sales comps of condos in the area, my purchase price will be about 15% below comps.

The HOA fee is 50%-60% less than comprable condo buildings built within a three year time frame of the condos in this deal so I'm pretty sure that once I see the HOA's financial position, I will see that it is under funded. The deal still makes sense even after factoring in a 60% increase to the HOA fee.

Thank you Melanie. I have requested those items from the seller. I hope not to find out that it's been underfunded. I do know a number of the roofs need to be replaced soon. As far as the HOA board, I like the idea of community members being part of the board.

Hello,

I am working on a deal to purchase a majority of condo units (54%) which are part of an HOA. I have never owned property in an HOA let alone had the ability to control the association. I'm trying to understand what due dilligence I need to perform and educate myself on how to gain control of the HOA after I purchase the majority of the units. Since the HOA is a seperate entity from the property, I'm not sure what language to put in the P&S. I will add a subject to provision to review the HOA financials, board minutes, and disclosure of any legal documents pertaining to the HOA. Are there any words of wisdom from someone who has expeirence controling an HOA that you would give to someone who plans to gain control of an HOA?

I appreciate it.