Welcome to our new blog.
Today our topic is the risks associated with the purchase of some Condos. Every where we turn someone is touting the benefits of short sales and preforeclosure sales. There is no doubt that the wise investor can get some great bargians, but this market is not for the uninformed investor. In a condominum the bills must be paid and if there is a shortfall because a number of units are delinquent, the remianing owners will be assessed. In other words if you buy into a building that is fiscally unsound you will be paying more than your share. Additionally if a condominum goes into foreclosure and the process is quite drawn out, the full amount of delinquent receiveables may not be recouped. This bad debt will be absorbed by other owners.
When buying a condo it is important to research the fiscal health of the association.
At the very least be able to answer the following questions.
What is the amount of the receivables?
How does this compare with previous years?
How many units are for sale?
How many units are in some phase of foreclosure proceedings?
How much debt is the building carrying?
How many units are delinquent? 30 days? 60 days? over?