Newbie asks: Can I invest in townhomes also? - Posted by Smitty(Va)

Posted by RS (So. CA) on February 12, 2002 at 09:21:11:

Nice! Thanks for the heads up…I haven’t heard that before. This gives me an option I haven’t really considered.

Thanks again

RS

Newbie asks: Can I invest in townhomes also? - Posted by Smitty(Va)

Posted by Smitty(Va) on February 11, 2002 at 21:30:10:

Since I have been studying creative financing techniques pertaining to real estate, it seems that all of the courses that I have studied talked of single family homes. I was wondering if there are any advantages or disadvantages to doing deals on townhomes vs. single family homes? Can these techniques like L/O or “Subject to” etc. be applied to townhomes or is it recommended that I concentrate on single family homes ?

Thank you
Smitty(Va)

why sure you can… - Posted by Lloyd Cook

Posted by Lloyd Cook on February 11, 2002 at 22:31:36:

As long as the numbers work, including the home owners association fee, yes condo?s and townhomes can be a very excellent investment. In fact my best investments have been exactly that! An added benefit is that the landscaping is maintained by the association from your monthly fee. The fire insurance is also covered the same way. If you get a bad tenant, you only need to fix up the inside of the unit, not the lawn, roof, etc. All outside maintenance is covered by the association.

Some of the things to know and/or look into before investing are:

How sound is the association that runs the common area. Are their reserves for long term maintenance where they should be?
What % of the units have tenants in them? Too many tenants is not good.
Are there any lawsuits against the association or the complex?
Do the units sell and how fast? Do people want to buy them and/or live there?
What condition is the common area in? the roof, pavement, garage doors, etc.
Does the complex look inviting? Would you live there? (well, you don?t have to?..)
Will lenders loan on the complex? Does it qualify for FHA loans?
All the other things you would look into for any investment.

Been wondering the same thing - Posted by RS (So. CA)

Posted by RS (So. CA) on February 11, 2002 at 22:04:23:

Generally speaking, I imagine most any type of property is a good investment as long as the numbers work and there is a market for it.

Townhomes and condos are also generally harder to sell, from what I have been told. I do know that townhomes and condos generally have association dues which can eat into your cashflow if you are buying and renting out. Of course, here in so. california, SFHs may also be subject to association dues.

I would like to hear some thoughts on townhome/condo vs SFH for investing as well.

RS

Re: why sure you can… - Posted by Smitty(Va)

Posted by Smitty(Va) on February 11, 2002 at 23:14:52:

Thanks for responding Lloyd. You’ve been very helpful.

Smitty(Va)

There are pros and cons to condos… - Posted by David Krulac

Posted by David Krulac on February 12, 2002 at 18:48:37:

some condos don’t allow rentals, for example. some condos are hard to sell and sometimes the association fees are excessively high. there have been posts before about condos check the archives here.

David Krulac

Miniscule condo response. - Posted by Glen SoCal

Posted by Glen SoCal on February 12, 2002 at 02:15:48:

RS-

I received a response from a CRE man from Pasadena about beginning investing. He’s been an investor for quite a while and posts here sometimes. He said that it’s easier to purchase a condo that cash flows in SoCal than an SFR.

That’s all in know.

Definitely 2 cents.

Re: There are pros and cons to condos… - Posted by RS (So. CA)

Posted by RS (So. CA) on February 13, 2002 at 09:41:36:

Sound advice. As always, due-diligence is key. A very important newbie lesson and one that cannot be stressed enough.

Thanks!

RS