Buying into a small Condo project

[mvanlaar]

Hello,

I`m considering buying into a small condo project. There are a total of 4 units in the condo. Do you have any advice on buying into this kind of building? (I`m going through the regular condo due diligence.)

Also, it looks like I`ll be on the condo board. Do you have any advice on being on the condo board?

Thank you very much in advance!

Sincerely,

Maurice Van Laar

 

[DonCampbell]

#1 Complete the FULL Due Diligence Program

#2 Make sure that the reserve fund is well funded

#3 If you can meet the other owners/buyers do so, with such a small group you will want to know EXACTLY who you are getting into business with

#4 YES, by all means get on the board (make sure the condo has directors insurance to cover your director liability). Be active, it will be a different dynamic with only 4 owners so you will want to be in the middle of it so it doesn`t go off the rails.

 

[mvanlaar]

Hi Don,

Thank you so much for your advice. Here is the conclusion to my persuit of these properties:

I was looking at buying 3 of the 4 units (the first had already been sold), but turned down buying into this project for these reasons:

[list type=decimal][*]The condo conversion is not finished. There is no board of directors, no bylaws, no reserve fund, but condo docs have been filed and there is a condo corporation.[*]Buying 3 units would have meant I would have essentially taken over the unfinished condo conversion project and have had the responsibility of it while paying a premium for the units. If there was a lot of cashflow it would be worth considering, but not when the units just break-even.I could have bought the REIN Condo Conversion package and got up to speed on what should have been done, but I haven`t dealt with Condos before at all so there would have been a lot to learn.Hey... I`m still a rookie. These would have been my 2nd, 3rd and 4th properties and I didn`t want to get bogged down with continual work (condo board) while still working 9-5 and living out of town.[/list type=decimal]Reason #2 is really why I didn`t proceed with this project. The other reasons were important, but were not show stoppers.

Bye for now,

Maurice

 

[Thomas Beyer]

QUOTE (mvanlaar @ Sep 20 2008, 11:51 AM) Hi Don,

Thank you so much for your advice. Here is the conclusion to my persuit of these properties:

I was looking at buying 3 of the 4 units (the first had already been sold), but turned down buying into this project for these reasons:

[list type=decimal][*]The condo conversion is not finished. There is no board of directors, no bylaws, no reserve fund, but condo docs have been filed and there is a condo corporation.[*]Buying 3 units would have meant I would have essentially taken over the unfinished condo conversion project and have had the responsibility of it while paying a premium for the units. If there was a lot of cashflow it would be worth considering, but not when the units just break-even.I could have bought the REIN Condo Conversion package and got up to speed on what should have been done, but I haven`t dealt with Condos before at all so there would have been a lot to learn.Hey... I`m still a rookie. These would have been my 2nd, 3rd and 4th properties and I didn`t want to get bogged down with continual work (condo board) while still working 9-5 and living out of town.[/list type=decimal]Reason #2 is really why I didn`t proceed with this project. The other reasons were important, but were not show stoppers.

Bye for now,

Maurice
at the right price this MAY BE a great project to buy into .. it is not hard to finish a conversion .. and if you have financing lined up .. why not .. AT THE RIGHT PRICE !

Where is this project ? What is each unit selling for ? and what is the rough rent / month ? What type ? 2B ? 4 BR + yard ?

 

[dianeduckett]

Hi

I own condos in med. size buildings (21 - 40 units) and am on 3 boards. I know people who own in small projects. To me it seems desirable, as long as the other owners are reasonable people. Essentially you are in partnership with 3 others, so you had better know them !! There is work to be done, if you are self-managed, but you save on management fees. I guess it just depends on the "partners". I wouldn`t want to get into this personally you are an owner occupier and the other 3 are rented, with absentee landlords.


QUOTE (mvanlaar @ Sep 5 2008, 08:34 AM) Hello,

I`m considering buying into a small condo project. There are a total of 4 units in the condo. Do you have any advice on buying into this kind of building? (I`m going through the regular condo due diligence.)

Also, it looks like I`ll be on the condo board. Do you have any advice on being on the condo board?

Thank you very much in advance!

Sincerely,

Maurice Van Laar

 

[mvanlaar]

QUOTE (thomasbeyer2000 @ Sep 20 2008, 01:26 PM) at the right price this MAY BE a great project to buy into .. it is not hard to finish a conversion .. and if you have financing lined up .. why not .. AT THE RIGHT PRICE !

Where is this project ? What is each unit selling for ? and what is the rough rent / month ? What type ? 2B ? 4 BR + yard ?

Hi Thomas,

• The project is in NE Edmonton.
• The units were listed at $199,900, but I`m not sure if they`re still on the market.
• Two units are rented for $1200 and the other for $1100.Tenants pay utilities.The units have 3 bedrooms upstairs, a main floor and a basement with hookups for laundry. They are quite nice.Condo fees have been set at $65/month, but have never been collected.

What do you think?

ciao,

Maurice

 

[mvanlaar]

QUOTE (dianeduckett @ Sep 20 2008, 04:45 PM) Hi

I own condos in med. size buildings (21 - 40 units) and am on 3 boards. I know people who own in small projects. To me it seems desirable, as long as the other owners are reasonable people. Essentially you are in partnership with 3 others, so you had better know them !! There is work to be done, if you are self-managed, but you save on management fees. I guess it just depends on the "partners". I wouldn`t want to get into this personally you are an owner occupier and the other 3 are rented, with absentee landlords.


Thanks for the advice!!!

Maurice