condo buying

[KCPowercat]

I may be moving to a new condo with new HOA. I know the DNA had classes on what to look for when buying but I never went to that class. when I bought my current condo I was ignorant to condo buying and just purchased without knowing what to look for in the condo itself or HOA financials and regulations.

I have an agent from Boveri so they should be able to help but what tips and hints do more experienced condo buyers have? any key ratios to look at in the financials or regulations to look out for?

[loftguy]

I may be moving to a new condo with new HOA. I know the DNA had classes on what to look for when buying but I never went to that class. when I bought my current condo I was ignorant to condo buying and just purchased without knowing what to look for in the condo itself or HOA financials and regulations.

I have an agent from Boveri so they should be able to help but what tips and hints do more experienced condo buyers have? any key ratios to look at in the financials or regulations to look out for?

There are no key ratios. The details are everything. In condo documents and the social/governance nature of the given property.

Agents at Boveri typically have access to a level of history and detail on any downtown condo building to allow you to have informed decision making. This should be a big part of the value of this firm. If your particular agent does not have several years with the company, then make sure they are gathering info from the rest of the brokerage team.

However, some of the things to ask your agent:
-Is the reserve account sufficient? (Much depends on the property! 25k may
be enough for one property and a million not enough for another)
-If a renovation, was it full gut rehab? (not a cut and paste)
-General Maintenance Issues at this property?
-Past, present, or future lawsuits against developer/manager/Association?
-Is the HOA board healthy? (not filled with neurotic, power-grabbing, life
sucking assholes. I'm serious!)
-Have other customers of Boveri bought here? What do they say?
-If tax abated, what year does the abatement go away?

Feel free to pm with more specific questions.

[loftguy]

I may be moving to a new condo with new HOA. I know the DNA had classes on what to look for when buying but I never went to that class. when I bought my current condo I was ignorant to condo buying and just purchased without knowing what to look for in the condo itself or HOA financials and regulations.

I have an agent from Boveri so they should be able to help but what tips and hints do more experienced condo buyers have? any key ratios to look at in the financials or regulations to look out for?

There are no key ratios. The details are everything. In condo documents and the social/governance nature of the given property.

Agents at Boveri typically have access to a level of history and detail on any downtown condo building to allow you to have informed decision making. This should be a big part of the value of this firm. If your particular agent does not have several years with the company, then make sure they are gathering info from the rest of the brokerage team.

However, some of the things to ask your agent:
-Is the reserve account sufficient? (Much depends on the property! 25k may
be enough for one property and a million not enough for another)
-If a renovation, was it full gut rehab? (not a cut and paste)
-General Maintenance Issues at this property?
-Past, present, or future lawsuits against developer/manager/Association?
-Is the HOA board healthy? (not filled with neurotic, power-grabbing, life
sucking assholes. I'm serious!)
-Have other customers of Boveri bought here? What do they say?
-If tax abated, what year does the abatement go away?

Feel free to pm with more specific questions.

[KCPowercat]

Thanks. I got the regs I'm trying to read through but they seem almost like mine currently so not sure if either are missing things....things like % that can be rented....limited common elements....pets...etc.

haven't got the financials yet. I will fire you some details on pm.

[earthling]

A good rule of thumb for reserves is about $3K-$5K per unit. So a 50 unit building would ideally have at least $150K in reserves. If the building was recently overhauled or is very well maintained, lower may be acceptable as long as HOA dues are high enough to slowly build the reserves back up.

Check if there are major assessments planned. Might have to dig deep to find out - ask anyone and everyone you run into who knows the building if they're planning something big like air condition, elevator or window replacement. If so and you want in that building, negotiate the approx assessement difference for the price of the unit. A seller is likely prepared to offset selling price with assessment value.

Be careful with newly converted/built buildings that are still under the control of the developer. They will intentionally set the HOA dues low to sell units and then when the owners board takes over, they realize they must raise dues. If dues seem low, they probably are too low. There's nothing wrong with going into a newly created condo building but there are benefits to a more established condo building that has been in the hands of the owners for several years (not the developer). The dues are probably properly set after a few years and they'll have a better handle on prioritizing what to do next with the building. A young condo building usually doesn't have a solid handle on things for a few years, maybe longer. If there are tax abatements, going into a newer condo could be worth it but expect HOA dues to potentially increase.

Don't let high HOA dues scare you off if you can afford it. If the dues include heating/air/water and/or provides lots of services like exercise room, rooftop deck and/or doorman, it might be worth it.

Also try to get a feel if the board makes an effort to maintain the building. Look for basic things that aren't maintained that probably should be (in the common/exterior areas, not within units). If they can't take care of basic things, they can't manage the big things.

Try to buy at or below your means. If most of the owners of your building are living above their means, it will be harder to maintain the building.

[KCPowercat]

A good rule of thumb for reserves is about $3K-$5K per unit. So a 50 unit building would ideally have at least $150K in reserves. If the building was recently overhauled or is very well maintained, lower may be acceptable as long as HOA dues are high enough to slowly build the reserves back up.

Check if there are major assessments planned. Might have to dig deep to find out - ask anyone and everyone you run into who knows the building if they're planning something big like air condition, elevator or window replacement. If so and you want in that building, negotiate the approx assessement difference for the price of the unit. A seller is likely prepared to offset selling price with assessment value.

Be careful with newly converted/built buildings that are still under the control of the developer. They will intentionally set the HOA dues low to sell units and then when the owners board takes over, they realize they must raise dues. If dues seem low, they probably are too low. There's nothing wrong with going into a newly created condo building but there are benefits to a more established condo building that has been in the hands of the owners for several years (not the developer). The dues are probably properly set after a few years and they'll have a better handle on prioritizing what to do next with the building. A young condo building usually doesn't have a solid handle on things for a few years, maybe longer. If there are tax abatements, going into a newer condo could be worth it but expect HOA dues to potentially increase.

Don't let high HOA dues scare you off if you can afford it. If the dues include heating/air/water and/or provides lots of services like exercise room, rooftop deck and/or doorman, it might be worth it.

Also try to get a feel if the board makes an effort to maintain the building. Look for basic things that aren't maintained that probably should be (in the common/exterior areas, not within units). If they can't take care of basic things, they can't manage the big things.

Try to buy at or below your means. If most of the owners of your building are living above their means, it will be harder to maintain the building.

Great tips...thanks.

Do any condo regs ever list a % of units that can be rented out by the owner? We are dealing with that right now in my current condo and is of interest to me looking at new condos.

[earthling]

Most banks want to know what % of units are leased and the building management should be able to provide, but probably only if you ask.

[taxi]

The rental percentage is often set to comply with lending guidelines, which are dictated mainly by FHA. These guidelines are constantly changing and impractical when applied in a blanket fashion for all condos.
For example, to say that only 10% of condos can be rented might make sense for a 300 unit building, but put a lot of strain on a 5 unit building. Sometimes, An owner may get relocated or have some reason why they have to move. If the allowed leased unit threshold has been met, they may be forced to sell at a reduced rate in an unfavorable market, which messes up everyone else's comps. This is what happened in KC a couple years ago and probably lots of other markets. It is my understanding that many of the FHA's recent guidelines were drafted to address problems and concerns in really bad condo markets like Vegas and Miami.

[KCLofts]

Check to see if they have a major component study detailing when major projects need to occur - things like repaving a parking lot, or replacing HVAC or elevator equipment. These should be planned up to 20-25 years in the future. See if there are any projects due in the short term and if there is enough in the reserves to handle it. If not, there's a good chance you'll be asked to pony up for a special assessment.

Also check to see if they have some kind of preventive maintenance plan, especially dealing with keeping the building watertight. Seems to be lots of issues with water in downtown condos.


Take a look at the annual budget and see if it seems reasonable. See if you can find out how much dues have increased year over year.

Try to take a look at the HOA meeting minutes (typically monthly) for hints of problems with the building or certain residents.

[KCtonic]

Looking for input from anyone on suggestions regarding a condo/loft purchase in the River Market area. We are in the middle of a one-year rental (test run if you will) at Old Townley and have pretty much decided we want to stay in the RM. We've looked at places at Conover & Bridgeworks but are very cautious about those two due to the ongoing lawsuits we're hearing about due to continued water issues. I'm just concerned about HOA assessments due to those issues which is keeping us from moving at all on those two buildings. Also looked at 523 Grand and 423 Delaware.

Anyone have input/opinions about these places or others in the RM?

[smh]

Tough to beat Riverbend on amenities and community. Great building with some great neighbors.

[loftguy]

Looking for input from anyone on suggestions regarding a condo/loft purchase in the River Market area. We are in the middle of a one-year rental (test run if you will) at Old Townley and have pretty much decided we want to stay in the RM. We've looked at places at Conover & Bridgeworks but are very cautious about those two due to the ongoing lawsuits we're hearing about due to continued water issues. I'm just concerned about HOA assessments due to those issues which is keeping us from moving at all on those two buildings. Also looked at 523 Grand and 423 Delaware.

Anyone have input/opinions about these places or others in the RM?

I think we have a few Riverbend owners/tenants on this forum (200 Main).

I have only heard good things about the experiences in that building and the community that has developed there.

[KCLofts]

There are no ongoing lawsuits at Conover Place. It's time to stop perpetuating that story.

I would recommend trying to contact the HOA president of any of the buildings you have concerns about to get the true story on any past or present issues, rather than relying on rumors and hearsay.

[KCtonic]

There are no ongoing lawsuits at Conover Place. It's time to stop perpetuating that story.

I would recommend trying to contact the HOA president of any of the buildings you have concerns about to get the true story on any past or present issues, rather than relying on rumors and hearsay.

I stand corrected on Conover. I was told there was a lawsuit but obviously it has been resolved. I'll definitely take your advice & contact the HOA's of Conover to confirm.

I did just look at a couple of units in Bridgworks and their disclosure did say lawsuit underway. That was this week.