Saturday, May 17, 2014

Is it a good time to buy a condo?

(Note:  I brought this up the blog from the original date of Friday, August 24, 2012.  It is an old post but the info remains valid with the caution that if you buy here you are making a purchase of a condo in a low income rental project, make sure you want to do this.)

Q)  Is Nautilus Cove Condo a good place to buy a condo.

A)  Yes, provided that you can put up with a really crappy management firm that the BOD seems unwilling to fire.

There are pretty much three price ranges here at NCC. The most expensive condos would be those 56 condos being sold by the developer. Even they don't think they will sell at the prices they ask and they say that they do not anticipate any further sales.  Those units are rented out by the condo management firm and are advertised as 'low income housing'.

2nd tier prices, are lower than the prices above and are being asked by Owners who wish to sell their units, either they have paid cash or they are approved by their lending institutions for short sales. Short sales have several problems and you can frequently waste a lot of time trying to buy one only to have it fall through at the last minute.  Be careful with short sales see info at:

3rd tier, the units that have been foreclosed by lending institutions and are put up for sale at 40-50% or their original purchase price. The prices are very good, but they are sold 'as is' and some units need to have holes in the wall patched, require new carpeting and even complete painting.

The foreclosed units can sell quickly and now and then there will be a bidding war which will drive prices up by several thousand dollars. Even with the steep discounts on prices asked, potential buyers can still put in bids for less than the asking price and this can save you money, all the seller can do is refuse to go lower, so it dosen't hurt to ask for a lower price.

So the answer is that it is a good time to buy and foreclosures have tended to sell quickly. There have been some problems in obtaining FHA/HUD approved loans.  However, cash seems to work quite well and if you have 80-90K on hand you can pick up a very good deal at Nautilus Cove.

Probably the only 'happy' Owners are the ones coming in now at those steep discounted prices.  Owners who purchased at the original list prices of 3-6 years ago have seen their units re-sale value drop so low that it frequently isn't worth keeping up the mortgage and Assn. dues payments.  You can rent a lot cheaper here than the costs of paying on  a mortgage obtained before the realty bubble burst. 

Rentals here go from $850 to $1100 and an owners old mortgage may be costing them $1,000-1,250 a month, plus your Bay County taxes, your $225 monthly condo fee and your units insurance.

By Way of Disclosure:  I owned #708 at NCC from 5/07 to 1/13 and sold it back to the developer at a 78K loss.  I am very pleased to be a 'former owner'!   Note:  I also sued the developer controlled BOD for several years on their lack of enforcing 3 sections of the documents regarding rentals of units.  I 'settled' the suit and got back my 7K in attorney fees and filing costs.  When I left they were renting out units in accordance with the condo documents.