Point me in the right direction to start the loan seeking process on a condo | TigerDroppings.com

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Chair
LSU Fan
New Orleans
Member since Jan 2013
1177 posts

Point me in the right direction to start the loan seeking process on a condo


Should I start researching lenders online?

Go meet with a local lending office?

What's my first steps?







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Breadcrumbs
LSU Fan
Baton Rouge
Member since May 2005
2854 posts

re: Point me in the right direction to start the loan seeking process on a condo


first step: don't buy a condo, unless it's on a beach.





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jojothetireguy
New Orleans Saints Fan
Live out in Coconut Grove
Member since Jan 2009
9122 posts

re: Point me in the right direction to start the loan seeking process on a condo


there are a few companies helping with closing cost right now. I know my mortgage guy is offering a percentage of the loan depending on your credit history. Email me if you want more info

<-----@gmail.com






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Chair
LSU Fan
New Orleans
Member since Jan 2013
1177 posts

re: Point me in the right direction to start the loan seeking process on a condo


quote:

first step: don't buy a condo


Why's that?






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Fat Bastard
New Orleans Saints Fan
Paradise
Member since Mar 2009
15622 posts

re: Point me in the right direction to start the loan seeking process on a condo


quote:

Why's that?



I believe it was discussed here ad nauseum about the cons of doing such a thing and most here on this forum frown upon it.






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AbsolutTiger
LSU Fan
Baton Rouge
Member since Sep 2006
4260 posts

re: Point me in the right direction to start the loan seeking process on a condo


It's appropriate in some circumstances. It's frowned upon on here sometimes, but in considering one in New Orleans as a second place. I don't want much maintenance when I'm just there for the weekends.





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bryso
Clemson Fan
The Real Death Valley
Member since Dec 2006
27046 posts

re: Point me in the right direction to start the loan seeking process on a condo


Turn around a run the other direction





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bryso
Clemson Fan
The Real Death Valley
Member since Dec 2006
27046 posts

re: Point me in the right direction to start the loan seeking process on a condo


quote:

It's appropriate in some circumstances. It's frowned upon on here sometimes, but in considering one in New Orleans as a second place. I don't want much maintenance when I'm just there for the weekends.


It's call I hotel. Lets say u spend 150 a night, 300 a weekend. That's 1,200 a month.

What your note on a condo gonna be. Lets say u bought one for 100k at 3.5% at a 15 year AM.

That's what 700ish a month note. Ad the insurance and taxes and u can call it 900 a month.

Then you gotta buy shite to put in the condo. We will be cheap say 3000 upfront.. Tv couch beds towels vacuum mop... Prob more like 5k

The you gotta bat the utilities prob not a lot since u won't be there but let's say 50 a month

Then you will likely have an HOA dues prob $125 a month so someone will cut the grass pickup the trash yada yada.

So then the AC needs a repair. There's 500 bucks during the summer.

So add all that up and figure out what it costs per month.

Then realize u can pay about the same and have some women named Lopez clean up after you






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Chair
LSU Fan
New Orleans
Member since Jan 2013
1177 posts

re: Point me in the right direction to start the loan seeking process on a condo


A lot of these concerns won't really apply to me. I won't be spending close to $1200 a month on the note/HOA/utilities etc. I have evrything I need to furnish the entire unit right now so there won't be any upfront costs for that.

I'll also have gym access included (which I pay for a membership now) with other amenities that I don't have now.

The location is smack dab in the middle of the city, which is what I want. I don't want to buy a house somewhere in the suburb. I'm renting now, and don't see the point of continuing to rent, if I'm in a position not to.

The same size units in the complex are renting for much more than my note will be, so if something does happen, I shouldn't lose anything if I have to rent. I know this is an assumption, but it's a promising one as opposed to one that looks not so promising.

I guess it's just a situational thing.

Not doubting the board or saying anyone is wrong. Just trying to figure out if my situation makes it deifferent than the norm.







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Crbello4Hiceman
LSU Fan
Lurking
Member since May 2011
425 posts

re: Point me in the right direction to start the loan seeking process on a condo


Beware of taxes and insurance in Nola. I bought a foreclosed condo in lakeview. 3 bed, 2.5 bath, 1800 sq ft for $132K. Great deal, right? Turns out it is just an ok deal. My note is $500 a month. My tax bill was $3,200 for 2013(I know it will go down significantly next year when they update for sale price), which equates to $266/mo. Condo dues are $257 a month, which is driven largely by insurance costs. Before you buy one, make sure the building has a roof style that is preferable for insurers.

The moral of the story is this: before you offer get firm quotes on what kind of insurance the association has and what your gap policy will cost (including flood), go to nolaassessor.com to look up the tax bill and calc what it will be with and without homestead exemption if you plan to rent it out one day, and lastly only buy if the property is listed significantly below fair market value. A property bought for what it is worth will prob not be a good buy after you factor in transaction costs on the back end if you ever sell it/exposure to decreases in neighborhood value/increases in insurance costs etc.



This post was edited on 2/7 at 10:31 am


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bryso
Clemson Fan
The Real Death Valley
Member since Dec 2006
27046 posts

re: Point me in the right direction to start the loan seeking process on a condo


quote:

Beware of taxes


taxes are the number one deal killer in investment real estate.






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Chair
LSU Fan
New Orleans
Member since Jan 2013
1177 posts

re: Point me in the right direction to start the loan seeking process on a condo


quote:

Before you buy one, make sure the building has a roof style that is preferable for insurers.

Me and Chad discussed this earlier in the thread. It's a multi story condo complex, so I'd assume the roof issues would be different than a condo community with several 1-2 story units throughout. Same issue with flooding. If there are 100 units in the complex, there might only be 10 effected by roof damage and 10 effected by flood damage. I understand I am greatly (and possibly incorrectly) oversimplifying this, but wouldn't the damage to the bottom level or top level will be spread over the entire complex?

Do you have a separate insurance policy besides what you pay for your condo dues? If so, how much do you pay for the year?






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Breadcrumbs
LSU Fan
Baton Rouge
Member since May 2005
2854 posts

re: Point me in the right direction to start the loan seeking process on a condo


Master Insurance Policy on Condo find out if premium is covered in monthly dues
does it cover the inside or just the outside dwelling
does it include improvements and upgrades like wood floors and granite, if it covers the inside
what is the deductible and hurricane deductible?
does the balance in the HOA account come anywhere near covering that deductible amount?

for your individual property insurance
if the Master Policy doesn't cover the inside structure, then get dwelling property insurance for an amount that will cover walls,cabinets, floors, fixtures. You should also get contents insurance for your TVs furniture, clothes, etc. I would load up on Liability insurance in case you burn the whole building by negligent grease fire or something. Finally, buy Loss assessment which is very inexpensive and covers you for any losses that the insurance couldn't pick up for damages because they were lower than the deductible.

Some other things to consider:
what is the history of assessments for property upkeep (new fences, painting buildings, etc.)

What is the history of Master Policy Insurance Premium increases on the property? It's getting harder and harder to insure condos and insurance companies are not covering them anymore or increasing premiums rapidly. The monthly HOA dues are becoming all insurance premiums and less about stockpiling cash for repairs/improvements.

is the association approved for FHA loans? if there are a lot of rentals (more than 50%) - which happens when there are a lot of identical units for sale at the same time and for extended periods - then FHA might not approve financing for new owners. Any buyers would then have to come up with 20% down or the owners are coming way down on price to attract suitable condo buyers. There are a few more requirements to get FHA approval as well.

your condo investment is dependent on the health of the other units and the properties in general and the management of the HOA. Healthier properties have stockpiles of cash in bank accounts to handle repairs and insurance.

Some people prefer controlling their own investments and thus get detached dwellings.






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