Beware of Investing in Condos, Townhomes & Single Family Houses in Associations

[@consumerdebtchitchat]

I bought a condo and I love it. I hate maintenance. I didn't buy it, however, with the intention to rent it out or as investment property. Condos would be HORRIBLE as investment property .. I totally agree. I bought HALF the housing I could afford (100k vs 200k) .. paid 70 percent in cash … And my 15 yr . mortg. will be knocked out in 4 to 5 yrs. I do agree fully with warnings in video. You need to know WHY you got it .. and is THAT a good / acceptable reason for you. *side note: I have a gal pal who owns a single family home.. and is working on a 15k leaky roof. You pay for maintenance one way or another - HOA / no HOA.

[@obtucewillie]

HOA fees are like buying a house and paying rent.

[@iahest]

Yes but over time rules can change and the price of the fees can go up

[@lisarobinson3521]

Riiiight

[@yadayada752]

It's all of those, plus people telling you what you can do with your own property.

[@berrymilkteana6515]

winkwinkhinthint hoa ain’t do any shit but just give you troubles all time

[@moniquewashington4319]

@@iahest True🙋‍♀️ the prices do go up and too many rules, it's like like renting a expensive apartment🤦‍♀️😩

[@FelipeGallino]

Phil, I'm a Property Manager in Florida (not an HOA/Community Manager) so I would like to add a couple of negative points against Associations: - On average, HOA take 30 days to approve a tenant. - Some associations tend to reject renters without reasons - They will send to collection maintenance fee even for $10. - They make money out of violation - Ect

[@freedom_mentor]

Great points! Thanks for sharing.

[@consumerdebtchitchat]

My HOA application flew right through. I should take that as a compliment I guess :) Of course 70 percent down probably doesn't hurt either.

[@tropicalpresley]

Damn

[@BrookeLyn39]

Thank you

[@UltimateBargains]

My 1st rule about HOA: Never buy in an HOA. I don't care how great a deal it is. My 2nd rule about HOA: Refer to rule #1.

[@freedom_mentor]

I've made over $80,000 on individual deals in HOAs. If the margin of safety is big enough and you know the rules, there is money to be made.

[@robmoffit4970]

Amen! Never live or rent in any of these communities. If you can flip one quick, then ok, but never live or rent in one ...

[@UltimateBargains]

Glad to hear that you made some good money. ;) I just think that there is enough low hanging fruit elsewhere not to risk getting involved with an HOA.

[@jaxxonthehealer6607]

Well when you live in places like San Francisco or Los Angeles where a condo is all you can afford. Condos here are as much and in some cases more than single home. But they are closer to the city and free of most maintenance. But those HOA fees. .... rip off.

[@a1no1x]

I think phils real lesson is to be educated to be weary of where you might lose. Fundamentals guide though many situations :)

[@GrandpaFabulous]

Sounds like a lot of trouble can be avoided if you take the investment seriously enough to bother to read and fully understand The governing documents BEFORE you buy. I bought a condo in ‘09 AFTER reading everything from the HOA. I lived there very happily for 7 years and I’ve been renting it out for the last 2 years. Nearly a decade after purchasing it, I can say with confidence that it was a good, solid decision because I took the time to understand what I was getting into.

[@consumerdebtchitchat]

Philips comment x 2 - totally agree.

[@CessLa2oya]

That is true

[@mr.g937]

Rules can change at any time

[@GrandpaFabulous]

@@mr.g937 if you read the governing docs, they will say how rules get changed. In my case minor rules can be changed with a vote of the board after owners have had 30 days notice of a vote. Owners are encouraged to attend board meetings and voice their views on potential changes. Additionally all owners can run for a board position so that they can be the one’s voting. Major changes require a majority vote of the owners. I understand that this isn’t enough control for some owners and if that’s how they feel, I wish they wouldn’t buy in HOAs to begin with because they make everyone else miserable who willfully agreed with the democratic process from the get go.

[@michaelcarter266]

An HOA can abuse its power so easily since any house not built yesterday will be in violation of something.

[@valdanowill]

YOU ARE REALLY THE VERY BEST. I AM SO HAPPY I SOLD MINE BECAUSE THEY WRITE ME LETTERS CONSTANTLY FOR THE LEAST OF THINGS AS MY NEXT DOOR NEIGHBOR KEEPS REPORTING ME TO THEM. THEY HARASS MY FAMILY, CALL POLICE , CHARGE MY CHILDREN FOR VIOLATING THE COMMON ELEMENT. THEY ARE A NIGHTMARE.

[@jamesofsandiego]

Stephen while I'm sorry to hear about your bad experience I'm also glad I read your comment. I've been warned thanks to you and the video. So glad you moved. I'll never live like this.

[@michaelhofby]

I know someone who bought a condo and it was just before the market crash came, so he got into trouble and couldn´t pay the montly expenses on the condo anymore.. I asked , well what are you going to do? He replied that he would just rent it out to somebody and hold it until the crisis was over... He then called the association that handled the condos in that building and they told him that he wasn´t allowed to rent out to none other than direct family, which was only direct so children or parents and none other. That put him in a situation where he couldn´t get rid of the condo and he couldn´t rent it out and hold, so the condo went on foreclosure and he got about 700.000 danish kroner (about 105k USD) in debt which basically means he will be in bad debt for the next 20 years or so.

[@LoveConquersAll888]

ohhh wow. I was thinking of buying a condo.. good thing I seen this video. thanks Phil for keeping it real.

[@Dan-bg5fm]

Haniry A what did you end up doing ?

[@jeanlenor1858]

Haniry A Dont you dare do it.

[@sheenamercer4738]

Please try to avoid buying a condo, they are very hard to sell and from what I hear HOA's are the worst for condo owners. They really take you through the BS and the fees are very high as well. I've seen some very nice condos in my area but opted to get a SFH because I didn't want to still feel like I was living in an apt and to me that's what a condo is, an apt that you are paying to own

[@4cClubT]

@@codecaine this vid is the real deal, 11:02 'townhouses suck'

[@damianaguilera7746]

I think it all depends on where you live and also to make sure you read all the rules

[@twingzable]

Dang. I guess i will just live in a dumpster.

[@consumerdebtchitchat]

Uh Lizzy .. make sure there aren't HOA rules about livin' in uh dumpster :)

[@abyronworld2758]

@@consumerdebtchitchat 😂😂

[@Bluediamond2023]

So HOA are evil Nazis.

[@CessLa2oya]

@@consumerdebtchitchat 🤣🤣

[@mushroompizza5804]

Haha! Go for it! Free foods in the dumpster.

[@metta8]

I live in a sfr development with an hoa. I actually like having an hoa. Thankfully, the hoa is very healthy and they do a good job. We also have a social committee for community events for a closer knit community. I know my neighbors and I'm friends with them.

[@Vera-dg3hf]

This guy SAVED me from investing in a nightmare townhome!!!!

[@stilldon1]

I've been an HOA board president 2007-2019 and still serve in that capacity. When I bought my brand new SFR in 2005 the HOA dues were $129.40 /month. At some point we lowered the HOA dues to $120/mo for a few years and also lowered them even further to $115/mo for a while. They've been back up to $140/mo for a few years now. The main reason to have to increase the HOA dues is that the Reserve Fund account contributions keep increasing. We must have a Reserve Study done (in California every 3 years) by an independent company. The Reserve Fund components are things that have a "useful life" that is what we will have pay for those items when they will need to be replaced. These independent companies are licensed to do the Reserve Studies. So, we get a recommendation each year for the amount we should contribute to the Reserve Fund each month. We like to keep our Reserve Fund at about 95% funded. Again the contributions to the Reserve Fund keep increasing because labor and materials keep increasing that contribute to the cost of items like our fences, mailboxes, maintenance of our streets and there's pages of items that show for the "useful life" at our HOA. The first owners in our HOA began moving in 2005 and paying $129.40/mo and now in 2019 we're paying $140/mo. That''s only an increase of $9.60 since the beginning 14 years ago. And NO special assessments ever. We recently had our 10 group mailboxes vandalized and 5 were damaged beyond repair. The replacement cost will be close to $16,000. But no special assessment will be necessary because we have enough in the Reserve Fund account to replace the 5 that need to be replaced with better constructed less likely for vandalism mailboxes plus the insurance claim for 5 group mailboxes that were damaged beyond repair. We have 148 total SFR at the HOA.

[@db6568]

Have the Postal Service put in NDCBU's for mail and collection. They do it free including maintenance

[@Shino2600]

I’m in South Florida ...it’s almost impossible to avoid an HOA or COA ...

[@jamesofsandiego]

Here in CA it greatly limits ones choices.

[@k3isha3o54]

Right I'm in south Florida and the only affordable u nits are really the condos

[@consumerdebtchitchat]

Shino - I agree. Tampa … good luck finding a non HOA place. and if you do find one that is non HOA .. be prepared to look at someone's boat parked on gravel in the back yard. Been there!

[@222222e]

Great advice. I work in Florida and I would avoid them like the plague. I work for a bank dealing with foreclosure trials, and I've seen people's investments get wiped out due to our lien superseding the HOA's. People buy properties from HOA's who have a 2nd lien and it can be a nightmare. I would generally advise to stay away from any property that has an HOA unless you like getting screwed.

[@MayaKanaKa]

Thanks for posting this video. I found a condo in California. They told me the HOA dues is $460 per month!!!

[@litehold1144]

I bought an ocean view condo in Orange County, CA. Within a few years my neighbors and I realized that the construction was sub-par. For example, no insulation in the ceiling of the condo below mine. You can imagine what problems that created. Another problem was that they had skipped the building paper under the stucco, so the rain went right down inside and settled in the window sills which created mold. Then a neighbor from hell moved in and it was so stressful that I decided to sell. Guess what? NOPE. Why? The H.O.A. was embroiled in a years long massive lawsuit with the bankrupt developer's insurance co. over fixing everything throughout the complex. So no bank would lend on any property within the complex. I talked to several real estate agents who cynically said there were no condo developments in Orange Co. that didn't have major lawsuits over building defects. So I had to endure a made-for-TV movie nightmare neighbor for 3 years before finally getting her out - then I had to rent it out for several years. Eventually the lawsuit was won by the H.O.A., then the repairs commenced. The settlement per condo was 3X the original cost of each condo. Thankfully it was a desirable enough property that I still did well, but in terms of stress it was not worth it.

[@olegskotsen1764]

Not an investor in real estate (yet) but my home is in an association. So far no problems. Dues are $45/month and include a swimming pool, formal venue, and fitness room. In my opinion, the $45/month is worth it for the pool alone, never mind the other amenities. We don't have a management company, the board is run by residents who volunteer their time. We are building a savings account for future projects and so far, I am pleased. Thank you for your videos, I always enjoy watching and learning.

[@dougn2350]

Oleg Skotsen... Sounds like a sweet deal. The fees will eventually go up as the community ages. Thats a given. Something I highly recommend is that you guys restrict the number of rentals to no more than 20% (or less) of total units. Do this while you have mostly owner occupied units because it will be easier to get it passed. You'll be glad you did. Also, make sure that any new buyers sign the HOA rules agreement. Its a legal contract that binds them to obey the rules.

[@exoressdelivers70]

In most states if you have more than a certain number of properties in an Association you have to have a licensed management company to run it. If you have all the amenities you say you have and the fees are only $45 a month there must be a large number of homes in that development so as to share the costs. Just having volunteers run the association maybe illegal. They could be the board of directors but they may not be allowed to manage the development. Check with an attorney.

[@Elizabeth-yg2mg]

I had a condo for two years recently--luckily found a buyer (who thought she was making a good investment!) and got out. This video is so true that it gives me a stomach ache. N e v e r a g a i n.

[@Sarah-bn1hg]

What was so bad about it? All the costs ?

[@Rbar-s6q]

Me either

[@tecnolover2642]

Outstanding. No B.S. The most honest real estate investing teacher I've ever seen. Thank you so much! God bless you for your generosity Phil.

[@netman88]

Thanks for sharing. Another awesome video. What you say is true on Association. I saw one SFH association that let the people paint their fences any color til the 5th person painted it. Then they asked everyone to remove all the paint to clear.

[@DrNikkiCole-Davis]

I wanted a townhome, but after seeing this video, I will pass.

[@weotalks2810]

Don't!!!!@'f

[@winnieganaban]

OMG!!! I should have seen this video before i have a condo and i have a single family home and true im having all these problems ggrrrr...... im going crazzzzyyyyyyyy...

[@Nelphoto]

winnie ganaban same!!

[@nickeyg5516]

all he dose is discourage me, now I don't want to buy a home

[@rosebillings913]

Nickey G..Don't be discouraged!!..I own a townhouse.. I bought it when the stock market crashed in 2009. I got a really good deal on it. My association dues are less than $200 dollars and its been the same amount since I purchased it. You have to do your homework, you have to understand what the association dues cover. For example: water bill, insurance, and property maintenance. To get even more information about a property, you may want to first.. find a really good Realtor, that provides up to date information before deciding to purchasing. Hope this helps!

[@June0696]

@@rosebillings913 are you able to sell your town house to anyone without permission from the association?

[@geraldsmith7250]

@@June0696 I have bought into a couple of condos in Colorado and there have been no restrictions on who can buy.

[@lukemanriquez5236]

If you start wachting more of his videos you will find that he is a huge wet blanket and a party crasher. Take what he says with a grain of salt

[@nodirello]

Thank you for the tip. My first investment was on a Condo and it was first mistake as well. I had to fight with them to fix the plumbing issue for 5 month which was there responsibility because it was outside the house and finally the fixed it but now its been good 4month since that issue and the still haven't fix the yard its just disgusting what they do CMA associations and i cannot sell my condo because they dont have the right insurance (there insurance dont take care the flood). And i pay them every month $167.

[@wogfun]

I respect the opinion of someone who obviously has a lot of experience in real estate, but I'm here to say this is NOT always the case. I'm on the board of a somewhat small 24 unit building and just about everything you warn about is untrue. Each situation is unique, and not all condos are a nightmare.

[@njprepper8601]

Baloney

[@johnzeegler8641]

Sure HOAs and their dues (and rules) can be a hassle but they also serve a meaningful purpose. It prevents people from: 1) placing hideous looking blue tarps on their rooftops for long periods of time until they get around to repairing it. 2) prevents boat, trailers, RVs and cars that are in need of repair from sitting in the driveway looking funk-tified acting as an eyesore. 3) prevents people from using bedsheets as curtains. 4) Having a grill and lawn chairs sitting on the front lawn, again, causing eyesores. 5) having gutters, windows, siding and paint that needs to be replaced from not doing so. 6) paying dues pay for general maintenance and upkeep for areas that have a lot of grass to mow, flower gardens and retention ponds that need to be tended to, sewer systems and other misc areas from becoming an eyesore. All these things detract new residents from moving in and decrease property values or the amount of time it takes for you to sell your property. Something to consider. 👍

[@freedom_mentor]

So sad to read this comment. You have proven my point exactly. HOAs are awful.

[@freedom_mentor]

You can do whatever you wish on your land. I won't judge you.

[@z040880]

I'm happy about my HOA. I live in MN and I'm ok with someone else coming out and shoveling snow 5 months out the year.

[@travel201]

@@freedom_mentor But what your neighbor does to their home could drastically bring down your home value. No one will buy your house if the neighbor's house looks like it's own by crack dealers.

[@freedom_mentor]

@@travel201 Not in the places where I own real estate. My neighbors take very good care of their properties.

[@smonelh]

So true! Been dealing with my condo for 2 years...my 1st investment and dying to sell!

[@UltimateBargains]

6:44 Freudian Slip: "Fools" instead of "Rules"? (Either way, you're right.)

[@ApartmentKing66]

Before this video, I wouldn't go near anything with an HOA. Now, ski resorts will be built in hell before I buy so much as a doghouse in an HOA.

[@bryonnajones]

Well that was clever imo

[@anthonygarcia3097]

Like you I would not touch an HOA with a 10 foot pole.

[@moniquewashington4319]

Thank you🙋‍♀️ Buying a townhouse or condo is like renting a apartment you save me from making the biggest mistake ever 👍

[@crozlogic9962]

Just bought a condo BEFORE I ran across this channel! OUCH! I like this Phil Guy! Keep keepin it real Bro!

[@freedom_mentor]

Your homework now is to complete this 39 point checklist: www.freedommentor.com/association-buyers-guide/

[@kimberella2105]

I’ve lived in apartments my whole life and was now considering buying a condo, after seeing this I’m going to just stick to housing buying lol

[@4cClubT]

Wkd for a lady in an "hoa hood" the neighbor was freinds w the hoa & would prolly call on the lady I wkd for just because she voted for trump,hoa lady came walking by when she was doing a yd sale and complained bout it," meanwhile" the guy nxt door is raising pigeons in back yard and another guy up street owns a TOW TRUCK,but she don't dare fuck w/ them?????

[@healthyandhappy88888]

I love my day job and want to keep it while being a real estate investor. I’m a girl that is not handy. I really need more hassle free houses that don’t need me to mow the lawns or remove snow during the vacancy period. I’ve found townhouses helpful(currently own two). Although they are expensive, at least they take care of the lawn for me. They also hire people to fix sprinklers, cut the trees or fix the roof. All I need to give is money. To me that’s helpful because I still get lots of cash flow and have less stress. They also help keep an eye on my tenants. When something is not going right, they warn/fine me. That’s how I found out. In my area, SFH are much more expensive and older with bigger lawns. All the newly built SFH has HOA. What do you suggest me doing? Buying new townhouse/SFH with HOA or buying older SFH with no HOA? (My primary home is the latter type. It constantly needs so much work 🤦🏻‍♀️)

[@OneAdam12Adam]

You're part of the problem. If you don't live in the home stop trying to get rich off of people simply trying to live somewhere.

[@realestatesolutionsai]

Well done, Phil. I'm a realtor in Canada and I agree fully with you. Great informative video for the public consumer

[@ConfidentGrips]

This is great if your not a first time buyer but for first time buyers on California many of us do not have an option due to the cost of a single family home 90% of townhomes and all condos have hoa out here. If I followed your advise I would be rent for the same cost as my morgatge +hoa+pmi so that doesn't seem like a good idea ether

[@blin7509]

Brutally honest, I like the truth. Thank you!

[@ClassicalVideo]

Thanks a lot! All grate as always! I am always stayed away form COOPs.. I have 5 mobile homes that into a community. Only $40 per month. Free pool, Club House, but nothing else. But the lend is my, Average cost of a home about $50-52K, market price about $65K average. Rent price average $1050. Tax average $830 (I am out of that state), HOA $480 per year each. Just compare rent with a regular house, same size, of $150K minimum, and get an income picture. Now, I am selling my regular houses to replace them with mobile homes. Willing to do flips, as well... I with good luck to every investor and renter! Be happy!

[@cheerfulwr]

I have 4 HOA homes. It was my late husband's idea. I'm on the board and I hear how the homeowners hate tenants and landlords. I think they raise the fee because it is easy for them to pay it, but for multi-units owners, it gets very difficult. The inspections are insane. One time they told my husband and me that our door was painted too dark. We had to repaint the front door a different color and they didn't even know what color paint. They told us a color from a store that has been closed 20 years. My late husband made it his mission to redue the paint code to make it easier for everyone else after that. They expect 20 year homes to look like they did on day one. I hear all this at board meeting. I think I'm the only person with a brain. The make matters worse a guy stole that was the association CEO stole all our money. So we not only are broke we had to get a lawyer and he has done this to 24 other HOA's. I try to tell them to give it up we are never going to see a dime. Now they upped our dues $40 a house for 2 years to replenish what he stole. I wish my husband were here. They would listen to him. They don't listen to me.

[@astarisborn9820]

I remember reading a personal finance book that said “Condo’s are how slums are made!“

[@MarcusLeepapi]

I laugh so hard when you talked about this video...Yes, I keep asking a best friend of mine about her townhome. I always ask here about the association. She keeps telling me that her association is ok. Just ok period. Thanks for you video tonight.

[@lealovesdog8420]

This was super helpful! HOA/COA are a nightmare, always something crazy going on with them!

[@WhiteKitta]

I would never even consider buying any Condos orTownhomes.... for me the are just apartments with no privacy....and yes all those rules from the Associations would only drive me up the wall....I never understood why people would buy them....and I didn't even know there where Family Houses in Associations....have to make sure I never buy any of those either...

[@03edgex600]

Short term rental at a ski resort?

[@brandonhooper7748]

Old video but Phil you might have saved me today lol.

[@orlandorallegue4046]

Phil I just came across your video. You are so RIGHT. I wished I had seeing it before “ like 15 years ago’”. We owed a condo in South Beach for 14 years and was a nightmare 🤯 exactly what you described. Finally foreign investors began to buy them all and when 3 owners refused they enforced a Assessment of $ 25,000. All 3 of us had no choice but to sell because they owned the majority. You are GREAT.

[@Pat7629]

This is probably true unless you live in one of the major A list US cities like NYC, San Francisco, Boston, DC where anything other than a condo (like a residential building) would cost 5+ million. I don't understand why so many investors think an HOA associated with a condo is an extra expense that a Soley owned multi or single family doesn't have. The HOA is made up of an underlying budget that actually pays for things like new roofs, maintenance, water & sewer, electric, heat, etc. you're paying for those anyway with a house just not in the form of an HOA. I own only condos all over Boston and have done extremely well from both a cash flow and appreciation perspective. Management is also super easy with high income professionals who communicate well, always pay on time, have great credit, references, etc. With multifamilies you're dealing with a lower demographic that is very management intensive , which many don't consider.

[@freedom_mentor]

Wonderful comment. I really appreciate you sharing that. It paints a very different picture than my video and that's what I was hoping someone could do. Congrats on all your success and I wish you all the best in the future. Go Sox!

[@Pat7629]

+Phil Pustejovsky your points totally make sense perhaps in a suburban condo complex where there is a pool, landscaping, etc. where many "optional" expenses and assessments for new features like a tennis court, etc. come into the picture meaning if the property were Soley owned the owner could opt to do this him/herself or decide for himself whether he wanted these new features vs just being forced to pay. With city buildings there is no land other than the building itself so these issues don't really exist. Also in Boston & NYC a small 1-bedroom condo is $600,000. A building would of course be ideal but it's completely unattainable for most people. Moral of the story is that what types of property to buy is completely different depending on the market. There is a different answer for each market.

[@jaxxonthehealer6607]

Yes I agree, i think this video is specific got certain areas. Big cities condos and townhouse are perfect for first time buyers especially ones with no kids. But I'd much rather live in a house than a condo or townhouse.

[@Pat7629]

+Jaxxon the Healer even if I had kids I still wouldn't want a house. You can get a townhouse style condo that looks and feels just like a feee standing house with multiple floors, a garage, a yard, etc. The reason being that the LAST thing I would ever want to be doing after a long work week was cutting grass, trimming shrubs, watering plants, painting, maintaining porches, a pool, deck, etc. the value of my time is too important to be bothered with those constant time consuming headaches. I would rather spend any free time I had outside of work with my family and on hobbies I enjoy. Second point is that 90% of the high paying lucrative jobs/industries are in the core strong economic cities in the US: NYC, Boston, San Francisco, LA, DC. Try buying a house in or even within 20 miles of any of those cities. Unless you're annual income is $250,000+, you're looking at a condo. A small townhouse in Boston where I live is 3-5 million minimum.

[@jaxxonthehealer6607]

So true, but most ppl with houses get cheap gardeners to take care of their lawn. Even my grandma has one. But with california s drought problems the city is making rules when we can or cannot water our lawns most housing has transitioned to low maintenance yards by putting concrete down instead of grass or artificial grass and desert plants. You can get a small run down house with no renovations 2bd 1 bath for $550k easily here. Then you would have to pay to bring it up to code. It's so unreachable right now. . .

[@Gyve796]

But....it’s almost impossible to find even single home without the annual HOA fees these days. Based on 5 months of looking.

[@Samuel-qm9bq]

Hello Phil, thanks for the time you take to educate us... you're are absolutely right at least from my experience with trying to purchase a townhome. The maintenance fee was high, the management of their association were a mess and did not manage the finances well so they had to kick them out and put a new management, they weren't maintaining the area clean and nice, etc. As far as the issue with management, I tried to get a loan from 2 different banks denied it because of it and after the banks said no, I definitely said no as well.

[@johndavis2303]

Hmmm very similar to US Govt...paperwork, BS and local police to enforce their rule. Thanks for the info...

[@lilfamily]

Phil.. you are so right..can't stand my association either.. gonna sell this spring when my tenants lease is up..hopefully..cross my fingers.

[@pamelaalexander2949]

Special assessments could apply just for cleaning up trees after a hurricane. I paid $400 in Florida. Association fees began with me paying $250.00 after my 5th year living there I was paying $400 per month. I sold that mess (condo).

[@Shawk95]

Scary but useful info. Thanks.

[@andrewhollern]

The only possible way to make HOA buying worth it is to 1- Make sure that you CAN rent out the property (Do a Lease-option or Rent-to-Own. Owner Finance doesn't typically make sense unless you've got a good lawyer), and 2- Buy at wholesale and Fill the property QUICKLY! I won three raw land properties at-auction in the same HOA near Wallops Island, and all were approved for a 3BR house (found in due diligence research). I built one house completely and put it on the market after 150 days or so. The other two properties I was actually strapped for cash because the HOA made me pay 3 SEPARATE HOA dues, and I decided to put the lots of land for sale immediately and marketed it "as if" I cleared the lots and got them approved myself. I lied, and used before and after pictures of a different lot of land filled with trees and my lots that were cleared and landscaped. I made an overall profit margin of 16%, but I sold both lots of land before I sold the house.

[@RockinBarBRanch]

Margin of safety will NEVER exist for me for HOA situation, thank you for reminding me, though I have first hand experience! I did sell for a profit on a townhome in the foothills of Tucson in 1990. But I will skip the hassle. Thank you again!

[@TheNativecrafts]

Thanks for the video! I was planning to move to Jacksonville, Fl and was looking for a home (SFR) there. It appears every single SFR for sale there has an HOA. I probably will not move there!

[@freedom_mentor]

I will have purchased 4 different houses this month alone here in the State of Florida and none of them are in HOAs.

[@algo9136]

In 1996 we bought a townhouse, a former rental. When we bought a house and tried to sell the townhouse in 2010 and could not do it quickly, we discovered that we could not rent it out because association rules had changed. When our insurance company somehow learned that the townhouse was vacant, it promptly canceled our homeowner's insurance policy. The cost of insuring the townhouse tripled because the only company that would do business with us was Lloyd's of London. To make a long story short, the association rule change cost us tens of thousands.

[@nickthequick]

I will be buying property in Florida, not as an investment. I was already leaning towards a regular SFR, but this video convinced me it's the only way to go, even if that means less SqF of property due to higher prices.

[@decanterus8561]

I have a condo miramar FL as rental property and I was hit with flood ins, reg ins and Wall insurance which covers any damage within the wall. then there is the owner to non owner ratio where tenants were flooding the complex we had a weak condo association which was controlled by the developer and not by the current owners,,, still renting it barely getting by. I am able to take a loss on my taxes which helps a little I also hired a management company that collects rent and in on call.. they r great help and keep me out of the midnight call loop.

[@VnDynasty]

Quick question for anyone willing and capable of answering intelligibly. In regard to Phil's "undesirable" comment, wouldn't townhomes be desirable for medium-sized cities in America such as Washington, DC where virtually all homes are townhomes, condos, coops, or apartments? Perhaps this is the exception to the rule? I'm asking this question because I'm interested in buying a townhome because of the following benefits: 1) You're in the city, 2) The townhome is quite new, 3) Pricing is very attractive, 4) There is offstreet parking, 5) Relatively close to the Metro, 6) Up and coming neighborhood 7) DC is becoming increasing expensive. Would it not be fair to conclude that it will be desirable when resold? Especially to a generation of young people who are increasingly flooding to major cities in large numbers?

[@freedom_mentor]

Single family homes are always more desirable than townhomes to the general buying public.

[@Okruh_Kolumbiya]

VnDynasty I was thinking of the same question. And I also think that it's little different in DC. I mean you need to have money (doesn't matter investor or for yourself) to buy single family house around Washington DC area.

[@UmTheMuse]

I'm not a real estate investor by any stretch of the imagination, so take my comment with a grain of salt. Looking through your list of reasons to prefer a townhome over a single-family residence, I see location and cost as the main reasons for choosing the townhome. In other words, it's not the residence itself that makes it more attractive (I'll ignore the point about it being new, since that's only true in this specific instance, of course). Seems to me that you're arguing that the location makes up for the fact that the type of home is less desirable. Which is almost certainly true.

[@ryancabbat5263]

VnDynasty

[@dougn2350]

City townhomes are usually not part of an HOA. They're considered single family homes that happen to share a common brick wall on both sides. All you'll pay is property tax and whatever upkeep is needed. However there may be an historical district annual fee. My experience is within the city of St Louis. If you're talking about a new development then there may be an HOA involved.

[@freeNode5]

A lot of these statements are only valid for specific areas. In my area, townhomes are THE ideal home type. Only the high upper-class folks can afford single-family homes.

[@shirtasylum]

Well this just answered my question about your thoughts on getting into townhome investing. Thanks for the info. Condo's and townhomes are knocked off my list.

[@DJDragonFlyJonezNJ]

im here as a first time townhome/ Condo buyer not an investor and you have taught me so much , possibly saved the next 10years of my life as atempt to buy a home lol , thank you Phil, (the sideburns buzz cut kinda bothers me i dont know why but i like u so it bothers me less haha) for real tho thanks man

[@Jess-mw7ez]

you are 100% right...my association fee jumped from 190 to 480 per month. Plus I had to pay special assessments whenever association didn't have money. banks wont even give loan anymore in these areas; so it's hard to sell. And if underwater (loan), you are done.

[@navahana]

Hello Phil, thanks for sharing your knowledge. Just wanted to add that in case the condo association is in a legal lawsuit, banks won't lend money...so you cant get a mortgage.....

[@freedom_mentor]

Another great point! Thanks so much for sharing.

[@Judykins1957]

I have a condo rental and the HOA has so many rules. My sister stayed there once with her friends. I got a letter from the HOA notifying me that she and her friends were laying on the grass in the common area, and I could be fined. So many rules, ugh!

[@Katy809RD]

I thought HOA fees was to be used to fix and maintain the exterior of the building.. I did not know they could charge you an assessment. Ridiculous! Glad I saw your video because I was ready to buy a condo!

[@triforcepm7263]

I wouldn't be doing what I'm doing if I had never seen your videos you are such an amazing person! loving it!

[@nickchialOG]

Phil we have a neighboring association that takes 1.5% of the sale price from the seller each time that sfh, townhome, or condo is sold.

[@vh6307]

WOOOOW😞

[@patriot7633]

Hoe Owners Associations are nothing but big trouble. It is like some one else foot in your house without your permission. It is the concept created by some sick mind to rob the people by ruthless unfriendly rules. I won't touch a HOA property even they offer me for free. The builders who build and sell these kind of properties are Financial Crooks with sick mind of Dracula and will suck ones blood till he dies or rob him of his property for nothing.Phil is right don't walk into the TRAP.

[@frankg846]

Man, you sound like you got just bad experience with condos. I rent a condo so I don't know anything about that, I guess my landlord deals with it. I am in Canada I was thinking of buying a town house not sure if it is the same here as in USA.

[@cl2nden1st89]

Frank G I live in a townhouse in canada and prefer it over a SFH - don’t have to bother shovelling snow and maintain the outside my property. No horror-nightmare stories - but always do your research esp. about the fees, bylaws, neighbours, finances... I much prefer the newer Townhome designs than the old ones - the fees and maintenance on those can be too much. Basing on my own experience, though, I was rather surprised by the kind of fear mongering presented here. I guess LOCATION does matter.

[@jmjpowerjoule]

Windmill Farms in Forney, TX HOA dictates the exact utilities that are allowed and have them charge more for utilities, where the HOA gets a kickback from those extra utility charges.

[@vh6307]

UNBELIEVABLE😞

[@angelurena6137]

Phil you're a life saver! Many thanks for the info.

[@ryanbianchi6582]

Glad I saw this. In miami half of the houses for sale are townhomes, and I was considering one

[@ansarishariff]

Eye opener, pat on hand. A wake up call. Phil. You were right about condos. I just stepped out in the market to look for condos. In NJ very near to . Nyc. The condos has 850$ monthly HOA. the supervisor also told there are set of rules even if i think of re painting the house. Which includes approved contractors. Like u said. Also there are several set of rules. If broken. You will be fined.he also mentioned that i cannot rent it for two years after purchase. Also he explained about owner vs rental ratios. The very next thing i did was walk out of that place and take a deep breath. This is like paying to HOA and get tourchered. Also hoa will never come down. They always. Climb up the ladder Is buying a single family house better?? With no association link? How about the on going expenses? Repairs, lawn moving. Snow shawling ? Security? Etc etc. this is so confusing? Pls advice

[@freedom_mentor]

Buying a property that is not in an association has tremendous benefits over being at the mercy of an overbearing, expensive association; but sometimes, there are associations that provide you with amenities at a fair cost. In other words, it depends.

[@travel201]

I own a couple of condos. They both have doubled in price. The HOA dues in one only went up $10 a month in 7 years and the HOA hasn't gone up in 6 years. The HOA deals with things like landscaping and the roof. I was fined $600 once by the City of Chicago without warning because unbeknownst to me the grass had gotten too long in a single family home I owned there. Condos and townhouses are generally lower priced to begin with and the return is higher than single family houses. You are going to pay much less in insurance and less in property taxes. Many HOA's provide security for their units. No one is watching my single family homes. If I had to go back in time, I would have invested more in condos and less in single family homes.

[@safe-investor-ag5813]

I really appreciate this video, specially since I’m thinking about buying my first investment property in 2023. I will give you a shout out from my channel, I know my channel is small but I just really appreciate your videos man.

[@nicoz6540]

I was about to buy a townhouse with a condo fee. My mortgage would be 800$. The condo fee is 280$. Lmaooooo

[@iahest]

I know someone that bought a condo in a high rise before the crash of ‘08 and was paying a $440 HOA fee after the crash they had a lot of foreclosures in the high rise where no HOA was being collected so they raised the HOA fees to $700 making the remaining owners pick up the slack

[@deathmetalmachine]

never understand a logic of buying a single family home in a HOA. I understand the logic of condominiums but not a single family homes. I think those homeowners associations should be outlawed and considered illegal when it comes to a single family home also it only should be aloud with condominiums and townhomes and that is it.

[@dorismarks7773]

I love how truthfully direct you are.

[@dougn2350]

I live in a townhouse type condo. 2 bedroom 2.5 baths. 2 car attached garage. 1250 sq ft. My assoc fee is $155/month. The value has increased by 15% in the 2 years I've been here. I like my place. But my biggest beef is that too many units are rentals and the assoc has a hard time keeping them in compliance. The renters kinda ruin an otherwise positive experience.

[@cherylcrawford5153]

.

[@ikaustralia]

Thanks a lot, Phil. That was useful! Condos = apartments and units as well, right?

[@Virus278]

Австралия Без Купюр that's correct

[@futureprogrammer880]

i agree with this but the only problem is houses have way less cashflow compared to the investment. so im not sure what type of property is best for investment.

[@freedom_mentor]

Not necessarily. You should watch this video: kzbin.info/www/bejne/rarSoHxrf55ki68

[@nicolaypastore]

Well dang then where am I supposed to live at then?! You aren't leaving any kind of options. I am a single male thats gonna have a few pets and don't want the maintenance and upkeep of a yard but feel of a home.

[@leosbasebybase7557]

I been watching your videos I have learned a lot. just got to put the tools to work. thanks man

[@markmerger]

ive had mixed experiences some good & some not so good. From hoa fees went down, they fixed all they said they would & also put on a brand new roof on my unit to hoa fees went up & based on many owners not paying the fees & budget constrains caused the proposed projects to be abandoned. all investment properties owned are in such situations & id say its a wash. completely depends on the admin & the owners. however, all points made in the vid are valid

[@dolandbourgeois8989]

People usually buy condos because they don't want to take care of upkeep of a single family home. For that reason, condo buildings will have more leaky plumbing (underneath vanities for example) and here in Canada, especially in Montreal, home insurance policies are going through the roof for condos.

[@ryancabbat5263]

Doland Bourgeois

[@debbiem6406]

Just subscribed. Wow. Huge eye opener as I was contemplating selling my home of 43 yrs in Los Angeles, & possibly buy a condo or townhome near the beach in Orange County. Yikes.

[@freedom_mentor]

Watch this video too: kzbin.info/www/bejne/m4jHcqeloc5qmrs

[@GUITARTIME2024]

Cash out of that house and look at Florida.

[@debbiem6406]

Phil - Thank you.

[@Tampa0123456789]

Mannn this guy isn't lying. They almost took my place for $20!! I was shocked. After i cleared everything up you could see that i was just late once but even that i was paying them the money. It was just that by the time they got the money thru the mail they had already sent the nasty notice.

[@Elizabeth-yg2mg]

A friend got a $25,000 assessment to put a new roof on her condo building, so she sold to avoid it. She loved the condo because it was on the river, she often walked the river paths, and it was comfortable and run well. She bought a house in an HOA run development but didn't like it, then bought another house and didn't like it either. She missed the condo and by now had spent way more in moving around than the 25k roof assessment. Not sure where she ended up; I hope she moved back to those condos.

[@freedom_mentor]

Do you know if they ever moved back?

[@Elizabeth-yg2mg]

@philpustejovsky I don't know because I moved away shortly after this. She'd said she was planning to try yet another new town and I'd asked her why she'd left the place she liked. She seemed to have plenty of money, having retired at 50.

[@16161645]

Thank you for saving my family and me from this terrible so called deals condo

[@86Eclass]

Phil, I have a deal for a SFR in a hoa that I can potentially flip in a month and make a $40k profit. What are some major concerns that I need to research before moving forward ? Thanks

[@freedom_mentor]

Everything I have talked about in this video.

[@lisarobinson3521]

Omg. Thank you so much for sharing this information. I did not consider some of this information; what a blessing this video has been!

[@PerfectDiamond87]

I just found your page. I've watch 2 videos and have learned so and I'm planning on watching your previous videos. I hope you keep making new videos also. Thank you in advance!

[@mnwalker33]

You should have mentioned the positives of buying a property in an HOA. I bought a townhouse PUD 8 years ago that has low monthly dues. It only shares 1 wall with the neighbor. The ENTIRE exterior of my unit is maintained by the HOA (Roof, beautiful landscaping, roads, stucco, etc.). The HOA financials are maintained so well that the probability of an assessment is practically zero. And yes, there are rules, but I love the rules. My tenant’s neighbors don’t have tall weeds, broken down trucks in their driveway, barking dogs, ugly fences that are about to fall over, etc. I think PUD townhomes are actually the best of both worlds. I own my plot of land, I only share 1 wall, my whole complex is gorgeous, and all the exterior maintenance is taken care of by the HOA. My tenants and myself love it! And I just had my my unit appraised last month for a refi. The value is up 60% since I bought it!

[@Jrock_hawkf]

im going to bid on a forclosure condo in a ghetto area per say. you have my attention . still debating on this idea n doing my homework

[@daytradernupe]

Do not do it. Condos and Townhomes are the worst real estate investments out there.

[@TheAndysim66]

Study the condo rules and prepare a plan B and C for financing. It's not that big of a deal. Don't let these comments scare you. There are a million horror stories about single family homes also.

[@Jrock_hawkf]

+TheAndysim66 i agree with you

[@daytradernupe]

There are way more horror stories about Condos than Single Family homes. This is not even debatable. This is why most real estate investors with lots of deals under their belt avoid condos. You want to give yourself the highest odds of being successful not the lowest. Condors by far have the lowest success rate.

[@daytradernupe]

*Condos

[@volleyballvideos6426]

I think its good that investors stay away from condos, so they don't drive up the market for people who want to actually live in them.

[@MgtowRubicon]

Some HOA have rules that restrict the number of FHA loans, because FHA borrowers are perceived as less credit-worthy (translation: "lower class people"). Get a unit under contract and try to flip it, and the HOA blocks the sale when the buyer wants to use an FHA loan.

[@kalilamarquise]

Are you familiar with real estate in Hawaii (oahu)? SFHs are next to impossible for young first time home buyers ranging from 600,000 for a fixer upper to over a million for a decent house. I think here condos and townhouses are the norm. hoa fees range from $450 to $1500/month. any thoughts on investing/buying a 4br townhouse(over 500,000,but needs upgrades) for personal use and renting out spare rooms, while also slowly remodeling. FYI: similar remodeled townhouses sell for over 600k. also oahu is a revolving door for military and travel nurses(similar to your student housing theory) Thank you in advance for your information.

[@ryancabbat5263]

Jordan D

[@dougandlaurawhite]

was looking at condos nearby to rent and eventually let my mother live in. discovered that the HOA has a rule that only allows a small number of units to be rental properties at any time, the wait list was a mile long. I'm sure this helps keep a neighborly community, but also likely limits marketability and curtails investor interest and demand. Certainly lost my interest. Also, in my experience, many HOAs in Dallas will include some basic utilities like water, cable, etc. Some even electricity or building HVAC....this makes it difficult to attract profitable renters because they don't know how to properly break out the numbers to compare against a rental where they're responsible for all utilities. Also, they have no idea the utilities cost prior to rental and are quite happy not thinking about it until they have to.

[@yazan.kioumgi]

So the take away here is: Don't buy a condo, don't buy a townhouse, and don't buy a single house. Got it.

[@puravida5683]

My beachfront home in Costa Rica is in a HOA. Never again, will I purchase a property in a HOA! The bright side is, my property tax is only $400.00 a year.

[@genzillennial]

the association i lived in was mostly great and my family did end up making a profit on the sale. However the guest parking situation was always some dramatic event because for whatever reason residents were only allowed to have 1 guest parked in the lot at a time???? Street parking is not reasonable because we lived in a gated community and were a long drive from the entrance. So basically christmas, 4th of july and any holiday that involved people visiting our community was very hostile and dramatic.