Condo Rules

[cmattric]

Yesterday we had a great night at Calgary Rein meeting. Barry`s presentation about Condo management was very informative as well as scary in terms of how investors must obey Condo Board Rules.

Now, the situation is as Russell stated, some what universe is helping you once you tell everyone that you are in the business.

My Landlord (yes I know I should be one, but I am a newbee) called me and asked me if I am interested buying her place. I said "Sure", she told me she is asking 255K, and guess what I told her; is that the best you can do? She dropped 5K by the end of conversation and will come up with another asking price after talking to her sister.

And I asked her; Can you take your payments by monthly installments or you want cash now? She is ok with owner financing, no mortgage a little downpayment, and a fair market value.

My question is; With agreement for sale, knowing Condo Boards are cruel, what questions do I need to be asking that I am not?

My exit is to stay by end of 2010 and find a tenant or tenant/buyer.

Thanks in Advance

 

[Thomas Beyer]

QUOTE (cmattric @ Dec 2 2009, 04:18 PM) ..

My question is; With agreement for sale, knowing Condo Boards are cruel, what questions do I need to be asking that I am not?
ask:
1) is this good value compared to market .. i.e. how do you know this is a good price / did you do enough research ?
2) can you afford it ?
3) can you exit / sell to tenant/buyer i.e. @ what terms and with the right contracts ?
4) does the condo board allow renters or how many do they allow ?
5a) what are the taxes, condo fees and realistic rents in today`s and tomorrow`s market ?
5b) are there any reserve fund issues or possible future cash-calls ?
5c) any major issues in the condo board minutes ?

 

[neill]

6) When was the last condo reserve fund study done (and get a copy of it, along with the last 3-4 minimum board meeting minutes) and is it still economically viable today (ie. if it was done in 2006, the costs contained in it would be way low in today`s market)
7) Consider on your first condo purchase having the docs from (6) professionally read - one of the biggest phrases I have continually heard since the RLG event is "Ask me how I know....."
8) See if you can find out if there are any REIN members in your complex (or on the board, even better)
9) If successful in your purchase, celebrate!
10) Ensure that there is investor owner representation on your condo board to protect your mutual interests

 

[NikZad]

Sounds like you may have a good opportunity on your hands and possibly a great way to purchase your first property. Of course before you get to excited you definitely need to do some more due diligence as Thomas and Neil have both suggested.

I am a Real Estate Agent in CAlgary and would be happy to pull some comparables for you if you want to shoot me an email with the details,



QUOTE (cmattric @ Dec 2 2009, 04:18 PM) Yesterday we had a great night at Calgary Rein meeting. Barry`s presentation about Condo management was very informative as well as scary in terms of how investors must obey Condo Board Rules.

Now, the situation is as Russell stated, some what universe is helping you once you tell everyone that you are in the business.

My Landlord (yes I know I should be one, but I am a newbee) called me and asked me if I am interested buying her place. I said "Sure", she told me she is asking 255K, and guess what I told her; is that the best you can do? She dropped 5K by the end of conversation and will come up with another asking price after talking to her sister.

And I asked her; Can you take your payments by monthly installments or you want cash now? She is ok with owner financing, no mortgage a little downpayment, and a fair market value.

My question is; With agreement for sale, knowing Condo Boards are cruel, what questions do I need to be asking that I am not?

My exit is to stay by end of 2010 and find a tenant or tenant/buyer.

Thanks in Advance

 

[gwasser]

Many older Calgary condo complexes are in need of significant renovations while the reserve fund is low or insufficient. This may lead to large cash calls. I heard amounts up to $16,000 per unit. Also, check what the condo fees are. Typically for a 2 bedroom unit they should be around $250-$350 per month. The condoes that are in trouble have fees as high as $600 per month. With max rents in the order of $900 to $1050, there is no way that you can have positive cashflow in such units with a down payment of less than 30%.

So, have
1. a building/home inspection by a qualified inspector.
2. a condo expert review the condo corp papers before you jump
and...
3. Review in person (i.e. do it yourself) the board minutes, reserve fund balance and study. Also check the by-laws, especially if you plan to make this a rental property.

Hope this helps.

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Godfried Wasser

I love investing

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http://eucalyptusconsulting.ca

 

[cmattric]

Great Advices thanks to everyone