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I just found out yesterday that my condominium complex has too many delinquencies for someone to go FHA on a loan. The prices in our complex have plummeted and I'm curious as to what backlash will occur from appears to be an increasing in renters soon to come.
Sorry for the typo in the title, I was rushing through it.
Last edited by justtitans; 07-20-2011 at 01:58 PM..
Reason: Typo
Unfortunately, it means there will be a smaller buyer pool that can consider buying in your complex. Buyers will either have to pay all cash, or find a conventional loan which does not have those constraints (difficult), usually means much higher down payment and higher interest rate. Depending on pricing, you will likely get cash investors buying to rent, which further impacts loan availability.
Unfortunately, it means there will be a smaller buyer pool that can consider buying in your complex. Buyers will either have to pay all cash, or find a conventional loan which does not have those constraints (difficult), usually means much higher down payment and higher interest rate. Depending on pricing, you will likely get cash investors buying to rent, which further impacts loan availability.
I understand that, but do places that end up like this usually turn into apartment dwellings with 100% rentals? What do HOAs usually do in situations like this especially when it is unlikely that they will get the money necessary to maintain the community?
The prices tend to plummet in this situation b/c it's hard to get a loan and it's cash only. The HOA could continue to enforce a limit on renters, but you might find more condos going into foreclose.
I just found out yesterday that my condominium complex has too many delinquencies for someone to go FHA on a loan. The prices in our complex have plummeted and I'm curious as to what backlash will occur from appears to be an increasing in renters soon to come.
Sorry for the typo in the title, I was rushing through it.
Basically once the building is no longer FHA finance-able you are SOL. The only saving grace might be that some go to HomePath or conventional. Condos, depending on location are really taking it hard right now.
However if its that bad, it can more than likely go, or at least attempt to go all rental.
Is the building sold out? There was a building here in downtown San Diego that never sold out and it flipped back and forth from condo to rental. At one point it was both living in the building. What a nightmare.
Good luck to you. Any chance of renting it out and getting out of Dodge?
I understand that, but do places that end up like this usually turn into apartment dwellings with 100% rentals?
What do HOAs usually do in situations like this especially when it is unlikely that they will get the money necessary to maintain the community?
The owners are responsible for paying HOA fees. When a majority of owners are investors not occupants, priorities tend to change.
This would be an excellent time for owner occupants to run for election and get familiar with state laws as it relates to obligations and pay particular attention to the association's reserves for major repairs and replacements.
The owners are responsible for paying HOA fees. When a majority of owners are investors not occupants, priorities tend to change.
This would be an excellent time for owner occupants to run for election and get familiar with state laws as it relates to obligations and pay particular attention to the association's reserves for major repairs and replacements.
That's why a good, strong HOA Board is important. One that will go after delinquent owners and not wait around too long.
In reality, a rental majority won't impact the development too much if it's well run. Many investors are better at maintenance than owners. What is bad is what you've found out already, a large number of renters in a complex starts to impact the types of mortgages that can be issued which the ripples down to current owners wanting to sell.
Given that this is an old (1966) place that needs major work (we have a burned down building that has not been rebuilt and tons of maintenance issues), do you all think I would be crazy to just sell the place now and just take what I can get? The reason I ask is because if more renters come, the property value will go down and given the condition of it I have my doubts on how well it will recover.
You sound like you're in one of those HOA's From Hell. The fact that you have a burned out building that hasn't even been demo'ed, let alone rebuilt, is a real bad sign.
I wouldn't want to give you advice, but getting out of Dodge might be something you need to really seriously consider. I say that assuming, hopefully, that you can at least break even. But the problem comes from your original question: your buyer pool is now much smaller because of the FHA exclusion.
You know, maybe find out who the largest outside investor in the development is and call him to see if he'll make an offer.
Given that this is an old (1966) place that needs major work (we have a burned down building that has not been rebuilt and tons of maintenance issues), do you all think I would be crazy to just sell the place now and just take what I can get? The reason I ask is because if more renters come, the property value will go down and given the condition of it I have my doubts on how well it will recover.
I think that every property owner who isn't happy with their present circumstances should sell their property now for whatever they can get, and get out from under it. This is based upon my opinion that the housing market will continue to decline for at least two years, and that's based upon my expectation that the present economic recession cannot possibly be fixed in any shorter term, and probably will take longer than that. If I'm correct about declining home prices then it's obvious every month you spend in your currently declining property is another month's loss of potential sale price. Furthermore if I'm right you will be able to buy a similar property in two years for significantly less than you can buy it today.
That's why I sold my San Fernando Valley (Los Angeles) house early this year. I wanted to live somewhere else (somewhere not so "Los Angeles"), and IMO was losing $1K-$2K per month in potential sale value. If present trends continue I'll be able to buy a similar house with my sale proceeds even including the 8%-10% closing costs, because I expect housing prices to be at least 8%-10% lower in two years.
If you don't like your property and want to live elsewhere (or rent) there's no better time than the present to sell (dump) for whatever the market is. Same applies if you have unacceptable conditions where you own now, like the condo complex that seems to be in meltdown. It looks like it'll be in a worse meltdown 1-2 years from now since I can't see any likely rescue.
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