The Tale of Two Condos
Lets give a shout out to Charles Dickens, The Tale of Two Cities
How can two condo complex'ss built at the same time and the exact same way have an incredible difference in price?
The simple answer is one is broke and in debt and the other has great reserves. How did a condo board not understand what they were doing?
How did the owners agree to borrow 7 million dollars, at a fix rate that can not be paid out early?
When buying a condo, as a buyer you need to understand, you are not just buying the unit, or the space of a unit. Think paint to paint inside
the walls. You are buying shares of the corporation. All condos have 10,000 shares, no more and no less. If there are 2 units, each would have 5000.
This is what should of happened.
First: the owners of each unit should of, borrowed the money individally! One phone call and a second mortgage, Line of credit or a mix.
Second: Pay the monies to the board for the work.
Third: Show in Reserves 7+ million, as there should of been some monies in the reserve.
Fourth: Do the work over a few years
Fifth: Hard quotes, no cost overruns, and calculate to the penny how much will be left in the reserve. This complex has 150 units, this would equate to
The buyer comes to this complex, will be blown away with, Great Financials, Plan to fix problems, Owners and Management working together to improve the complex.
This equals to a place people want to live and own in.
Cavet to this, If the units were selling for $275,000 and they were, but the over all housing market is down 20% Then your unit is worth $220,000 as you can see this complex is down to $100,000 and most likely less!
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