Talk with the HOA.

Here’s the situation:Purchase Price: $540,000Down Payment: 20%Mortgage Rate: 7.125% (30-year fixed)Monthly Expenses (Mortgage, HOA, Taxes, Insurance): $3,706Realistic Max Rent: $3,000As you can see, I’m currently short $706/month even with max rent.

Anytime you are looking at purchasing a condo with a mortgage, the HOA Questionnaire is always going to be a key point of the loan process.

Next, I tend to recommend that clients stay away from inflated HOA fees.

But the other side of the coin is correct - the downside, and it can be huge, is potential assessments from HOAs who aren't solvent enough for new roofs or roads or maintenance.

I’m open to either a townhouse or a single-family home, but I’m definitely trying to steer clear of any crazy HOAs that eat into cash flow (you know what I’m talking about!).

While your condo snowball strategy builds equity, modest cash flow and HOA fees may limit returns.

Is your DSCR ratio greater than 1-meaning are you cash flowing (according to the lender's criteria of mortgage, property taxes and insurance (and HOA) if applicable).

You will want to watch out for HOAs, that is where you will see rental restrictions. 

Feel free to reach out and I can send our map of communities, and then we can also take a deeper dive in the HOA's and other criteria!