Worst case scenario for an underfunded HOA

[Coronita]

[quote]
Hey FLU,

You can also call the property management co (not the HOA) and ask them how stable the complex you’re interested in, whether there are any liens, whether special assessments are being considered, what the vacancy is, and so on. I’ve been calling them for condos I’m interested in and they’ve all been very helpful and forthright in disclosing this info. It doesn’t answer your question but helps in the decision to buy in a certain complex.
[/quote]

Thanks. Some of the condo converts are pretty scary, with a lot of FB’s and HOAs seemingly underfunded.
Just wondering if a severe underfunding can trigger a snowball, in which underfunding->special assessment->difficult in selling -> lowered prices -> more FB buyers walking -> less occupancy –> even more underfunding. There are a few complexes i see that have a huge FB tenancy and a lot of sales that aren’t happening, and I’m guessing the HOA is underfunded. I’m just wondering when this landmine will blow up.

[nostradamus]

That’s true. I guess in that case I’d look at the percentage of FB’s as a function of the number of units total. Then I’d look at the length of time most people have lived in the complex. People who have been there long are IMO less likely to walk. If you have a good portion of the complex being long-term residents, I’d say things are pretty stable.

I’m not sure how to find out online how long people have been living there, so it’s a good argument for going there and talking to people.

[nostradamus]

That’s true. I guess in that case I’d look at the percentage of FB’s as a function of the number of units total. Then I’d look at the length of time most people have lived in the complex. People who have been there long are IMO less likely to walk. If you have a good portion of the complex being long-term residents, I’d say things are pretty stable.

I’m not sure how to find out online how long people have been living there, so it’s a good argument for going there and talking to people.

[nostradamus]

That’s true. I guess in that case I’d look at the percentage of FB’s as a function of the number of units total. Then I’d look at the length of time most people have lived in the complex. People who have been there long are IMO less likely to walk. If you have a good portion of the complex being long-term residents, I’d say things are pretty stable.

I’m not sure how to find out online how long people have been living there, so it’s a good argument for going there and talking to people.

[nostradamus]

That’s true. I guess in that case I’d look at the percentage of FB’s as a function of the number of units total. Then I’d look at the length of time most people have lived in the complex. People who have been there long are IMO less likely to walk. If you have a good portion of the complex being long-term residents, I’d say things are pretty stable.

I’m not sure how to find out online how long people have been living there, so it’s a good argument for going there and talking to people.

[nostradamus]

That’s true. I guess in that case I’d look at the percentage of FB’s as a function of the number of units total. Then I’d look at the length of time most people have lived in the complex. People who have been there long are IMO less likely to walk. If you have a good portion of the complex being long-term residents, I’d say things are pretty stable.

I’m not sure how to find out online how long people have been living there, so it’s a good argument for going there and talking to people.

[Anonymous]

I know of Co-op complexes on the east coast that have gone bankrupt. The Co-op is allowed to borrow so I think that is different than the HOA. I see no reason why the condo HOA could not go bankrupt. Of course I am not sure if declaring BK will encourage the utilities companies to restore service or get a leaking roof replaced.

I know it is tempting to buy some of the condo conversion projects as cash flow investments. However, who are going to be the renters in the complex? What condition will your investment be in one year later. Stories I have heard about owners that have owned in complexes that have gone section 8 are not good.

[Anonymous]

I know of Co-op complexes on the east coast that have gone bankrupt. The Co-op is allowed to borrow so I think that is different than the HOA. I see no reason why the condo HOA could not go bankrupt. Of course I am not sure if declaring BK will encourage the utilities companies to restore service or get a leaking roof replaced.

I know it is tempting to buy some of the condo conversion projects as cash flow investments. However, who are going to be the renters in the complex? What condition will your investment be in one year later. Stories I have heard about owners that have owned in complexes that have gone section 8 are not good.

[Anonymous]

I know of Co-op complexes on the east coast that have gone bankrupt. The Co-op is allowed to borrow so I think that is different than the HOA. I see no reason why the condo HOA could not go bankrupt. Of course I am not sure if declaring BK will encourage the utilities companies to restore service or get a leaking roof replaced.

I know it is tempting to buy some of the condo conversion projects as cash flow investments. However, who are going to be the renters in the complex? What condition will your investment be in one year later. Stories I have heard about owners that have owned in complexes that have gone section 8 are not good.

[Anonymous]

I know of Co-op complexes on the east coast that have gone bankrupt. The Co-op is allowed to borrow so I think that is different than the HOA. I see no reason why the condo HOA could not go bankrupt. Of course I am not sure if declaring BK will encourage the utilities companies to restore service or get a leaking roof replaced.

I know it is tempting to buy some of the condo conversion projects as cash flow investments. However, who are going to be the renters in the complex? What condition will your investment be in one year later. Stories I have heard about owners that have owned in complexes that have gone section 8 are not good.

[Anonymous]

I know of Co-op complexes on the east coast that have gone bankrupt. The Co-op is allowed to borrow so I think that is different than the HOA. I see no reason why the condo HOA could not go bankrupt. Of course I am not sure if declaring BK will encourage the utilities companies to restore service or get a leaking roof replaced.

I know it is tempting to buy some of the condo conversion projects as cash flow investments. However, who are going to be the renters in the complex? What condition will your investment be in one year later. Stories I have heard about owners that have owned in complexes that have gone section 8 are not good.

[Coronita]

A friend who mentioned section 8 rentals are actually pretty decent, because at least the tenant is obligated to keep the place relatively orderly. I can’t comment, because I’m not section 8 landlord. Anyone? (Recordsclerk, you there?)

[Coronita]

A friend who mentioned section 8 rentals are actually pretty decent, because at least the tenant is obligated to keep the place relatively orderly. I can’t comment, because I’m not section 8 landlord. Anyone? (Recordsclerk, you there?)

[Coronita]

A friend who mentioned section 8 rentals are actually pretty decent, because at least the tenant is obligated to keep the place relatively orderly. I can’t comment, because I’m not section 8 landlord. Anyone? (Recordsclerk, you there?)

[Coronita]

A friend who mentioned section 8 rentals are actually pretty decent, because at least the tenant is obligated to keep the place relatively orderly. I can’t comment, because I’m not section 8 landlord. Anyone? (Recordsclerk, you there?)

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