Appraisal came in $5k short, run or stay?

[4plexowner]

lenders continue to dis-favor loans on condos even for owner-occupied units

Fannie recently changed the rule on the number of units that any one owner can have in a given complex

the rule, as I understand it, applies to 10 units and less – a few months ago a single owner could have no more than 49% of the units and now can have no more than 10% of the units (ie, could own 4 units before the change and can only own 1 now)

look at how that affects the other owners in the complex – if any single owner has more than one unit, NOBODY in the complex is eligible for Fannie loans

I believe the dis-favoring of condo loans is a trend and something that all condo buyers should consider – the value of condos decreases as loans become harder / more expensive to obtain

[4plexowner]

“I’m pretty sure that investors would not buy them”

when the time comes (we aren’t even close) investors will be buying them with cash – cash buyers get BIG discounts or they don’t buy – they’ll pay 30 or 40 cents on the dollar from peak prices would be my guess

[4plexowner]

“I’m pretty sure that investors would not buy them”

when the time comes (we aren’t even close) investors will be buying them with cash – cash buyers get BIG discounts or they don’t buy – they’ll pay 30 or 40 cents on the dollar from peak prices would be my guess

[4plexowner]

“I’m pretty sure that investors would not buy them”

when the time comes (we aren’t even close) investors will be buying them with cash – cash buyers get BIG discounts or they don’t buy – they’ll pay 30 or 40 cents on the dollar from peak prices would be my guess

[4plexowner]

“I’m pretty sure that investors would not buy them”

when the time comes (we aren’t even close) investors will be buying them with cash – cash buyers get BIG discounts or they don’t buy – they’ll pay 30 or 40 cents on the dollar from peak prices would be my guess

[4plexowner]

“I’m pretty sure that investors would not buy them”

when the time comes (we aren’t even close) investors will be buying them with cash – cash buyers get BIG discounts or they don’t buy – they’ll pay 30 or 40 cents on the dollar from peak prices would be my guess

[sreeb]

The 24% funding is not good. A lot of condos have low reserves because they are owed money by non paying owners who are in foreclosure. Much of this will be payed as the units are sold. The condo may also have had a big expense lately. If all the units just got a new roof and paint job this may be no big deal. If they just spent the money repairing flood damage then it is a big problem.

The main impact on you is that HOA fees will be higher until the reserve is brought up. Try and discern from the documents if the current fees include enough reserve payments to bring the reserve to fully funded in 5 years. If not, take the shortfall, divide it by the number of units and 60 months. Your HOA fees will probably go up about that much.

Another concern is deferred maintenance. If there is a backlog of repairs or major items like roofing or repaving then you need to add that to the reserve deficit. Similar to a house only you have no control over the timing.

There have been several comments on difficulties financing condos. I think the banks have overshot and things will get better later which is good for you if you can buy now. I would look at rental cash flow. If it would cash flow at prevailing rental rates you will be able to sell it.

[sreeb]

The 24% funding is not good. A lot of condos have low reserves because they are owed money by non paying owners who are in foreclosure. Much of this will be payed as the units are sold. The condo may also have had a big expense lately. If all the units just got a new roof and paint job this may be no big deal. If they just spent the money repairing flood damage then it is a big problem.

The main impact on you is that HOA fees will be higher until the reserve is brought up. Try and discern from the documents if the current fees include enough reserve payments to bring the reserve to fully funded in 5 years. If not, take the shortfall, divide it by the number of units and 60 months. Your HOA fees will probably go up about that much.

Another concern is deferred maintenance. If there is a backlog of repairs or major items like roofing or repaving then you need to add that to the reserve deficit. Similar to a house only you have no control over the timing.

There have been several comments on difficulties financing condos. I think the banks have overshot and things will get better later which is good for you if you can buy now. I would look at rental cash flow. If it would cash flow at prevailing rental rates you will be able to sell it.

[sreeb]

The 24% funding is not good. A lot of condos have low reserves because they are owed money by non paying owners who are in foreclosure. Much of this will be payed as the units are sold. The condo may also have had a big expense lately. If all the units just got a new roof and paint job this may be no big deal. If they just spent the money repairing flood damage then it is a big problem.

The main impact on you is that HOA fees will be higher until the reserve is brought up. Try and discern from the documents if the current fees include enough reserve payments to bring the reserve to fully funded in 5 years. If not, take the shortfall, divide it by the number of units and 60 months. Your HOA fees will probably go up about that much.

Another concern is deferred maintenance. If there is a backlog of repairs or major items like roofing or repaving then you need to add that to the reserve deficit. Similar to a house only you have no control over the timing.

There have been several comments on difficulties financing condos. I think the banks have overshot and things will get better later which is good for you if you can buy now. I would look at rental cash flow. If it would cash flow at prevailing rental rates you will be able to sell it.

[sreeb]

The 24% funding is not good. A lot of condos have low reserves because they are owed money by non paying owners who are in foreclosure. Much of this will be payed as the units are sold. The condo may also have had a big expense lately. If all the units just got a new roof and paint job this may be no big deal. If they just spent the money repairing flood damage then it is a big problem.

The main impact on you is that HOA fees will be higher until the reserve is brought up. Try and discern from the documents if the current fees include enough reserve payments to bring the reserve to fully funded in 5 years. If not, take the shortfall, divide it by the number of units and 60 months. Your HOA fees will probably go up about that much.

Another concern is deferred maintenance. If there is a backlog of repairs or major items like roofing or repaving then you need to add that to the reserve deficit. Similar to a house only you have no control over the timing.

There have been several comments on difficulties financing condos. I think the banks have overshot and things will get better later which is good for you if you can buy now. I would look at rental cash flow. If it would cash flow at prevailing rental rates you will be able to sell it.

[sreeb]

The 24% funding is not good. A lot of condos have low reserves because they are owed money by non paying owners who are in foreclosure. Much of this will be payed as the units are sold. The condo may also have had a big expense lately. If all the units just got a new roof and paint job this may be no big deal. If they just spent the money repairing flood damage then it is a big problem.

The main impact on you is that HOA fees will be higher until the reserve is brought up. Try and discern from the documents if the current fees include enough reserve payments to bring the reserve to fully funded in 5 years. If not, take the shortfall, divide it by the number of units and 60 months. Your HOA fees will probably go up about that much.

Another concern is deferred maintenance. If there is a backlog of repairs or major items like roofing or repaving then you need to add that to the reserve deficit. Similar to a house only you have no control over the timing.

There have been several comments on difficulties financing condos. I think the banks have overshot and things will get better later which is good for you if you can buy now. I would look at rental cash flow. If it would cash flow at prevailing rental rates you will be able to sell it.

[eyePod]

A lot of condos have low reserves because the builder sets the HOA too low in order to facilitate sales. Then none of the owners want HOA to go up. OK when condo is new, time bomb at the 30 year mark. 2K assesment? What about 20K when everybody needs a new roof, etc.

[eyePod]

A lot of condos have low reserves because the builder sets the HOA too low in order to facilitate sales. Then none of the owners want HOA to go up. OK when condo is new, time bomb at the 30 year mark. 2K assesment? What about 20K when everybody needs a new roof, etc.

[eyePod]

A lot of condos have low reserves because the builder sets the HOA too low in order to facilitate sales. Then none of the owners want HOA to go up. OK when condo is new, time bomb at the 30 year mark. 2K assesment? What about 20K when everybody needs a new roof, etc.

[eyePod]

A lot of condos have low reserves because the builder sets the HOA too low in order to facilitate sales. Then none of the owners want HOA to go up. OK when condo is new, time bomb at the 30 year mark. 2K assesment? What about 20K when everybody needs a new roof, etc.

[Author]

Posts