Condo prices outside of Orlando seem low. What's the catch? (Kissimmee: for sale, apartments)

[halfbuck]

Hello everyone,

I've been frequenting the forum recently, as I have begun researching different areas of Florida for my inlaws, who are considering purchasing a condo or small house to use as a vacation home and perhaps rent out occassionally.

I've been looking at the listings on realtor.com and have noticed many nice looking 2 bedroom condos listed in the Orlando area that are priced around $40,000. They are in nice complexes with nice ammenities and are located in nice looking residential areas surrounding Orlando.

So what's the catch? The prices seem to low.

The inlaws are all over the map right now, but are beginning to focus on a more central location away from the higher insurance rates of the coasts. We are considering several areas, but the condos outside of Orlando caught my eye, and I figure that they would be easy to rent to families on vacation.

The info on the site is great and the opinions offered in the forums are a big help. Thanks in advance!

[**NoodLes**]

Most of those condos were well over $100,000 just about 1 year ago. Some areas are good and some areas are bad. Now is the perfect time to buy, people just don't realize it.

[halfbuck]

Currently we are sorting through realtor listings and viewing their photos. We're trying to use the sattelite images of the neighborhoods to discern if the areas seem "nice" or not. I realize that what we see on the screen may not translate into reality, but some areas do look much nicer from the sky than others and some can definetely be ruled out.

At first, we were only searching for a small house, but then decided to also consider condos. We're thinking that a condo could be easier for us maintenance wise since we would be out of town 75% of the time.

Some of the places we've found look great, but I just can't wrap my mind around what seems like low prices to me. 2 BR, 2 Bath condos that are only a few years old and have very nice looking facilities for $40,000 to $50,000??? Just seems to low. I would have guessed $150,000 for some of them.

[GregTraub]

Some will have catches, remember if it's too good to be true it probably is. Many of the condo's in the price range you are quoting where condo-conversions, meaning they where originally built as apartments and with the quality of apartments. Many of them are also located in or very close to higher crime areas. And usually they will have very high condo association fee's that can be due to a variety of factors.
Some are great deals, but many have way to many issues for me, so tread carefully.

Also, if you were planning on renting the property out occasionally to vacationers, you will have to be located in an area zoned for short-term rental. These area's are pretty much only around Disney and Kissimmee.

[44nutman]

The problem with those condo units, and the ones in Metrowest is they are not FHA approved. The investor ratios are high and most lenders will not lend in those projects. Cash sales are dominating the condo conversion market. These conversion projects sold to investors and were giving cash back to the buyers. $10,000 decorator bonus. I saw a contract for one off fo metrowest that the builder paid the buyer a $1000 a month for two years. Guess when that condo went into foreclosure. Right after the builder payments stopped

[halfbuck]

I just looked up a condo listing in the Orlando area. According to the Orange County Property Appraiser's website, it sold in 2007 for $217,000. The current owner is a mortage corporation. This condo is currently listed for $40,000!!!

How can it be listed SO LOW???

[GregTraub]

Originally Posted by halfbuck

I just looked up a condo listing in the Orlando area. According to the Orange County Property Appraiser's website, it sold in 2007 for $217,000. The current owner is a mortage corporation. This condo is currently listed for $40,000!!!

How can it be listed SO LOW???

Because nobody wants them and there are a thousand more just like it. I saw one in metrowest that sold for over 300K and are now being unloaded for 40K.

[GregTraub]

Originally Posted by 44nutman

The problem with those condo units, and the ones in Metrowest is they are not FHA approved. The investor ratios are high and most lenders will not lend in those projects. Cash sales are dominating the condo conversion market. These conversion projects sold to investors and were giving cash back to the buyers. $10,000 decorator bonus. I saw a contract for one off fo metrowest that the builder paid the buyer a $1000 a month for two years. Guess when that condo went into foreclosure. Right after the builder payments stopped

Another great point, financing will be difficult if not impossible in most of these projects, cash is king, and the cash buyer's aren't interested in those projects unless priced VERY low.
And that 10K decorator bonus, pea's, you can still find old websites from some of these places that blatantly advertise tenS of thousands in cash to the buyer at closing...100% financing...basically paying people to buy there. In addition to "guarantee'd rent" for X years. The amount of fraud that happened in those developments is stagering.

[halfbuck]

A couple of the condos that I'm talking about are in a development called Cypress Pointe at Lake Orlando. The place looks great in the photos...

I understand that some people may have been taken advantage of initially, but assuming that there are no other issues besides supply and demand (such as excessivley high HOA fees or crack houses on the other side of the fence) are condos at these prices the deal of the decade or something to avoid?

Anyone have any info on this complex? Thanks.

[beckycat]

Some are foreclosures. I know they have some for sale in Lake Mary in that price range. Lake Mary is a very nice area.