Dreams of purchasing a place in SoWal put on hold.

[Joby]

Beachgirl
You might check out "flamingo Village" on the west end of 30A. We rented there for a while, nice neighborhood. I know one investor has about 10 homes for sale in $200,000 range.

Good luck

 

[Matt J]

That may be their original purpose, but I find they tend to mostly be overly interested in minding other people's business and squabbling.

I prefer to have basic rules for the neighborhood and maybe have to plant shrubs or a tree to hide a neighbor's house rather than have others telling me what I can and cannot do all the time. ;-)

It all depends on the HOA that you want. They run the gambit from Flamingo Village (the basic intent of maintaining a sign and making sure someone isn't running an auto shop out of their garage) to WaterColor where the HOA takes care of exterior maintenance on your home.

 

[gardening1970]

...hold on to that thought.

Nowadaze it's VERY VERY important that buyers check out HOAs to the extent that they would check out the electrical and plumbing in the property they're going to buy....

Shelly is exactly right. A financially distressed HOA - and ESPECIALLY if it is a condo association - is a huge red flag, and there are many of them right now.

The recently enacted Florida Distressed Condo Relief Act added to Chapter 718 may aid in reducing the number, but it will take some time.

 

[beachgirl66]

I will admit, I didn't thoroughly check this out before we decided to buy.....Now I am wondering what exactly could happen to the property (even if we our making our hoa and mortgage payments) if the HOA goes under? Would we lose the property or could it affect the value? If this is the case, then no lender would even consider letting anyone borrow money to purchase property there, so your pretty much screwed if we wanted to sell it in the future? So...... any property that you are thinking of purchasing that is in a short sale, or REO and there are several in the same HOA that it could possibly be financially unstable? Is there any way of knowing any of this before you waste your time by bidding on a property, so you don't waste your time?

 

[Lynnie]

It sounds like this happening is actually in your best interests. A friend is looking for a condo in Atlanta and I have suggested a thorough inspection of the HOA solvency. I think the next thing to happen with most HOAs will be either hefty monthly increases or ginormous assessments to make up their shortfalls. This will affect the underwriting of loans now and in the future as Fannie, Freddie and particulaly FHA continue to scrutinize the HOAs.......if the units can't secure traditional financing, yes it will affect your property value.

 

[SHELLY]

I will admit, I didn't thoroughly check this out before we decided to buy.....Now I am wondering what exactly could happen to the property (even if we our making our hoa and mortgage payments) if the HOA goes under? Would we lose the property or could it affect the value? If this is the case, then no lender would even consider letting anyone borrow money to purchase property there, so your pretty much screwed if we wanted to sell it in the future? So...... any property that you are thinking of purchasing that is in a short sale, or REO and there are several in the same HOA that it could possibly be financially unstable? Is there any way of knowing any of this before you waste your time by bidding on a property, so you don't waste your time?

Be ESPECIALLY cautious of the "dot.condoze" that were really apartments in their former life:

Rampant foreclosures leave condo owners stuck with fees - St. Petersburg Times

"....Brittany's Place, off Ulmerton Road, was nearly 20 years old in January 2006 when its Canadian owners sold it for $7.95 million ? about $83,000 per unit ? to Joel Campo and his partners.

After submitting the required paperwork to the state, the developers upgraded the units with granite countertops, new cabinets, stainless steel appliances and Italianate lavatories. In September 2006, the Brittany's Place Condominiums went on sale at prices ranging from about $122,000 to about $185,000.

Records show that many of the buyers were from Miami, and several were related to the developers. Few, if any, ever occupied the units they bought.

By 2008, Florida's condo market was in free fall. The developers were stuck with almost a fourth of the units while others were sliding toward foreclosure.

By last summer prices had dropped low enough ? but the complex still looked good enough ? that Bodine bought a two-bedroom unit for $63,000.

"The price was good and it had a really nice kitchen update,'' she says. "I had my Realtor check it out ? there was $50,000 in reserves (in the condo budget) at that time so I went ahead and moved in."

Bodine's first hint of trouble came a few months later when she got a notice that Pinellas County was going to shut off water to the complex because the bill hadn't been paid.

Last winter, when Bodine's mortgage company asked for a copy of the complex's hazard insurance, she was stunned to learn it had expired in November ? "while it was still hurricane season!'' she says...."

 

[Matt J]

Please note that reserves can only be used for the purpose they are being reserved. Reserves can usually only be co-mingled with a majority vote.

Another issue is that some HOA's are putting the liens they've obtained against owners on their balance sheet as assets. If the lien isn't attached to the actual property then good luck ever seeing it paid back.