patrick.net

Some things I would want to understand in addition to will I have sufficent cash flow after I buy:
- available reserves in the HOA
- The number of units actually current on HOA dues
-The planned maintence schedule for the units (what major repairs are coming due and for what have they reserved.
-any active lawsuits against the builder or HOA.
- will the HOA rules let you rent it.
- How many of the units are rentals

That said I hate HOA's so I would stay on or behind the fence.

These are all fine questions, but do yourself a favor and stay away from any condo/townhouse or subdivision that has an HOA. I have some rental properties that are in downtown urban areas (HOA) and single family homes in the burbs with no HOA. If I had to do it again I would stick to single family homes without HOA. I am on the HOA board of a few properties. The answers to your questions are only good for about a year or two at the most. I am on boards that have one year terms and two year terms, it just depends on the CC&R's. As for lawsuits, etc., they can come at any time. All of your questions could turn on a dime depending on who gets on the board and that's a crap shoot since not many want to get on the board. It's a thankless job, but I have the time and want to make sure that the complexes appreciate and my money goes in the right direction and keep the board moving in the right direction. Even though each vote is the same whether or not the member is an at large member or treasurer, if you can get on as President that's the best since that position sets the agenda and culture. It's not that difficult to become the President since most know that it's the most work. If you like herding cats, get on the HOA board because you'll get some great people and some idiots that seem to be trying to get the entire board and HOA membership into court for one thing or another. If you do buy a unit make sure that the HOA has done something to mitigate the effects of Calif. SB150 as it relates to rentals, if not run the other direction. You will soon learn that Davis-Sterling and the CA Corporation Code has your complex twisted into a pretzel with arcane rules, legal issues and everything the board does becomes glacial and it's difficult to get anything done. Where I have units they start at 600K so you are basically turning your investment over to five people that may do a good job, or may be idiots that don't have a clue how to run a corporation, which a CID (HOA) really is.

As for mixed use which is popular in urban areas these days, they are even worse. The business space is normally owned by another corporation that has nothing in common with the living areas. They have a completely different agenda than condo owners and the people that the corporation puts on the board WILL vote as a block and most of the time out vote the people on the homeowner side. Just another mess to avoid.

1. Can you plant yams in the common areas?

2 Can you reinforce the walls with kevlar sheets in order to prevent unwanted perforation by stray projectiles when cannibal anarchy arrives.

3. Can you replace the front door with a full steel door? ref:#2

4. Can you mount your GE minigun on the balcony?

5. Any young, nubile, sexually deviant women in the complex?

6. If not, can you keep any as slaves in your storage locker?

Did I leave anything out? Feel free to chime in AF.

Went to the open house, must have been about 10 other folks looking when I was there.

Something that caught me off guard was what the listing agent mentioned regarding the rent to own ratio within the complex. The ration must be 60% owner occupied and 40% available for rent.

The listing agent was not sure if this unit would continue to have the right to rent as it might reset when a new owner took over, and there was a waiting list to rent out units in the complex.

I didn't realize that a complex had this level of authority, so we pulled out.

Thanks for reading and the above feedback.

It's pretty common for them to have those types of rules. That particular one is usually driven by them keeping their FHA status. Too many rentals and the condo complex no longer qualifies and you can't get financing in there.