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Why you should never ever buy a condo as an investment or for personal use.
Florida version - here you go. https://twitter.com/AlbaumMichael/status/1287980743595929600
Florida version - here you go. https://twitter.com/AlbaumMichael/status/1287980743595929600
Typically a condo association is responsible for exterior, roof, lawn, parking lot, trash removal, water/sewer and all the amenities.
And you pay a fee to the association to manage.
And you pay a fee to the association to manage.
The condo elects a board with at least 3 ppl to manage the financials and everything stated above. The board usually, but not always, hires a 3rd party company to manage everything and the board oversees.
Problem 1
The condo board are usually mom and pops that have zero experience operating real estate. I've seen a condo paying $1,000s a month to repair an old roof, while literally sitting on $400k of reserves - for a new roof. But they were to scared to do such a big project.
The condo board are usually mom and pops that have zero experience operating real estate. I've seen a condo paying $1,000s a month to repair an old roof, while literally sitting on $400k of reserves - for a new roof. But they were to scared to do such a big project.
#2
The board members typically have family/friends that also own in the condo and they get voted in year after year.
They don't like change, as you can imagine.
The board members typically have family/friends that also own in the condo and they get voted in year after year.
They don't like change, as you can imagine.
#3
I was once shown a fractured condo deal that looked great, before I looked at the condo financials.
Turns out the association fees weren't even covering the cost to operate, so essentially it was going into debt every year.
Always look at the budget.
I was once shown a fractured condo deal that looked great, before I looked at the condo financials.
Turns out the association fees weren't even covering the cost to operate, so essentially it was going into debt every year.
Always look at the budget.
#4
Check to see that their are reserves in the condo bank account.
If not, than a Capex needed will be an assessment to you, and you'll be looking at an extra few hundred bucks a month in condo fees.
Check to see that their are reserves in the condo bank account.
If not, than a Capex needed will be an assessment to you, and you'll be looking at an extra few hundred bucks a month in condo fees.
#5
The board decides who to hire for the capex, with no clue of how much this work should cost. FL has contractors that love only working for these condos because they can take advantage.
Even worse, a board member can take an illegal kickback from a cousin etc to do the work
The board decides who to hire for the capex, with no clue of how much this work should cost. FL has contractors that love only working for these condos because they can take advantage.
Even worse, a board member can take an illegal kickback from a cousin etc to do the work
#6
The condo bylaws are critical. The developer could have put in laws that are messed up.
-No rentals
-No pets
-No leases under 12 months
-have to be 55 and older
Also look how easy it is for someone else to change the bylaws to restrict uses.
The condo bylaws are critical. The developer could have put in laws that are messed up.
-No rentals
-No pets
-No leases under 12 months
-have to be 55 and older
Also look how easy it is for someone else to change the bylaws to restrict uses.
#7
Board meetings are usually old FL ppl that are retired and like to argue with each other and hate change.
They're a terrible waste of time to get involved in especially if your time constrained.
Board meetings are usually old FL ppl that are retired and like to argue with each other and hate change.
They're a terrible waste of time to get involved in especially if your time constrained.
#8
Many condos have an investor that's owns a majority. They are the decision makers and they do what's in their best interest. Not the condos.
Many condos have an investor that's owns a majority. They are the decision makers and they do what's in their best interest. Not the condos.
#9
If your neighbor is a hoarder and likes mice and roaches, there is nothing you can do about it. And those little guys crawl through units.
If your neighbor is a hoarder and likes mice and roaches, there is nothing you can do about it. And those little guys crawl through units.
I know this because I do invest in fractured condos that I am the majority owner and therefore have control of all decisions.
There's a lot more, but these are some major items to consider.
There's a lot more, but these are some major items to consider.
