Aging condominiums

[torontowest]

Recently came across a condo townhouse unit at an aging condominium complex in north west Toronto. It was a 3 bedroom listed for $90,000, approximate 1300 sq foot with a finished basement, excellent condition, new carpets, new furnace etc. The problem was not with the unit but with the common elements and the management company, there was a special assessment of approx $300/month for 15 years remaining, in addition to pending legal proceedings against the mgmt company and a shortfall in the operating budget. The lawyer that reviewed the stat cert advised not to touch this property with a 10 foot pole, it was toxic in her words.

Has anyone seen similar deals, properties out there, and what do you predict the eventual outcome would be, there are already several units under power of sale in this complex and most of them can be had for $50k - $100k, a similar property anywhere else in the immediatey neighbourhood would be worth at least $150k - $200k. Can the management company declare bankruptcy, and the monthly maintenance fees and special assessment be reset? Any opportunities in something like this?

 

[Thomas Beyer]

QUOTE (torontowest @ Nov 26 2009, 02:11 PM) Recently came across a condo townhouse unit at an aging condominium complex in north west Toronto. It was a 3 bedroom listed for $90,000, approximate 1300 sq foot with a finished basement, excellent condition, new carpets, new furnace etc. The problem was not with the unit but with the common elements and the management company, there was a special assessment of approx $300/month for 15 years remaining, in addition to pending legal proceedings against the mgmt company and a shortfall in the operating budget. The lawyer that reviewed the stat cert advised not to touch this property with a 10 foot pole, it was toxic in her words.

Has anyone seen similar deals, properties out there, and what do you predict the eventual outcome would be, there are already several units under power of sale in this complex and most of them can be had for $50k - $100k, a similar property anywhere else in the immediatey neighbourhood would be worth at least $150k - $200k. Can the management company declare bankruptcy, and the monthly maintenance fees and special assessment be reset? Any opportunities in something like this?
lawsuit against STRATA Corp. .. or the management firm ? BIG DIFFERENCE !!

A condo owns a % of a Strata Corp. .. thus cannot "go bankrupt" .. whereas a management firm can !

the risk is that the common area problems are severe. Get a hold of condo dox. How big is this problem ?
$300/month = $3600/year * 15 = $54,000 per condo !

So add $54,00 to purchase price .. $144,000 .. with remaining risk .. is this better than a "clean condo" at 160 to 200K .. maybe .. maybe not !Given this size .. is the price reasonable ? or a deal ? or overpriced ? Maybe .. maybe not ..

Some older woodframe properties have mold or termite issues that are so severe that a bulldozer is teh best answer .. thus you buy LAND .. or the problem may be mitigated through a structural retrofit. Usually a thorough inspection of the condo docs and a discussion with a capable board member sheds light on it.

any used real estate you buy has problems. Some small .. some very big ! It is your job as an investor to size the problem in light of price ! It may be a great deal .. it may not !

Not for the faint of heart or a beginner .. but may be a great investment as it scares away the average buyer. Or it maybe a huge issue .. dig deeper .. then decide !

 

[housingrental]

Please elaborate on north west Toronto.... which location / building.... ?
Many "deals" to be had nearby that you can`t make any money at...