1. The Lazy Investor’s Way to Wealth.
Condominiums Attract Better Tenants.
Why Condos Attract Better Tenants.
The One Easy Test: Who’s Moving In, Who’s Moving Out.
Your Procedures Count, Too!
Can Investors (Lazy or Not) Really Build Wealth with Condos and Townhouses?
Why Such Neglect?
How You Will Profit with Condos.
The Historical Record.
What Does the Future Hold?
2. Bulls, Bears, and Cash Cows.
The Mortgage Paydown.
Wealth without Appreciation.
Add to Your Principal Payments.
Certainty over Uncertainty.
Plan Your Wealth Building: Stocks versus Condos.
Condo Investors Earn More Cash Flow.
How to Jump the Hurdle of Negative Cash Flows.
Shelter Your Cash from the IRS.
Homeowners Receive Tax-Free Gains.
Gain Tax-Free Cash with a Cash-Out Refinance.
3. Get to Know the Development.
Condo Communities Appeal to Buyers of All Incomes.
Key Sources of Satisfaction and Dissatisfaction.
Features and Price.
Your Best Opportunity.
No Simple Rules.
Why Stress This Point?
The Organizational Structure.
The Board of Directors.
Attorney and Auditor.
4. Do the HOA Finances Look Good?
Understated HOA Fees.
“I Don’t Care! I’m Not Paying”.
HOA Boards Must Follow Specified Procedures and Forms.
Your Financial Due Diligence: Summing Up.
How Much Insurance?
The Lesson of the Oakland-Berkeley Firestorm.
HOA as Plaintiff.
HOA as Defendant.
Be Wary of HOAs in Litigation.
5. What Do Condo Residents Say?
What Residents Say about Their Condos/ Townhouses.
Wise Investors Pay Attention to the Negatives (and Positives) of Condo Buildings and Developments.
What Features Rank Most Important?
Poor Construction, Careless Workmanship, and Unexpected Repairs and Replacements.
Government Inspectors Sometimes Fail to Do Their Jobs.
When Buying an Existing Unit, Check the Resale Package.
Unethical Builders and Sales Reps.
Sales Rep Disconnect.
The Documents Control.
Children: Little Monsters or Little Darlings.
A Parent Speaks.
Problems with Renters.
Should You Buy into a Project That’s Heavy with Renters?
Exercise Investor Responsibility.
6. More Likes and Dislikes of Community Living.
People per Unit.
Project Density versus Unit Crowding.
Multiple Visits/Curb Appeal.
Perimeter or Interior Building Site.
Why Underprice Preferred Locations?
Downhill or Uphill?
Sight, Sound, and Smell.
Unit Features and Design.
Uniform versus Uniformly Beautiful.
Will Tenants Pay Higher Rents?
What If Tenants Pay and Play?
What to Do?
I Love “Lock and Leave”.
Play It Safe: Ask!
Summing Up: Likes and Dislikes.
7. Understand the Bylaws.
Rules Create Value.
No Supply Because There’s No Demand.
Choose the Right HOA for You.
What Will You Find in the Resale Package?
Creating Value within a Context of Fairness.
The Condo Bylaws.
Meetings of Members (Article III).
Board of Directors (Articles IV–VI).
Power and Duties (Article VII).
Association Officers and Duties (Article VIII).
Committees, Records, Assessments, and Seal (Articles IX–XII).
The Amendment Process (Article XIII).
8. Understand the Declaration.
The Declaration Creates and Governs the HOA.
Don’t Rely on the Legal Opinions of a Real Estate Agent.
Not an Indictment.
The Purpose and Terms of the Declaration.
Generalities or Details?
The Terms of the Declaration.
9. Understand the Rules and Regulations.
Board-Issued Rules: Community Values or
What Rules and Why?
Maintenance of Unit (1).
Unit Occupancy and Use (2).
Charcoal Grills (6).
Pool/Pond Rules (11).
Flip Charge (15).
Capital Improvements (36).
Owner Additions and Alterations (37).
Utility Services (39) 204
Right of First Refusal (40).
Enforcement of Rules (42).
$50 Fine per Occurrence per Day.
10. Choose a Profitable Location.
In Which Company Should You Invest: General Motors or Microsoft?
Too Optimistic on Microsoft.
Negative Outlook on GM.
GM’s Stock Outperforms Microsoft.
Personal or Financial?
Location Incorporates a Milieu of Features.
Convenience: Easy Come, Easy Go?
Let Me Count the Ways.
Times of the Day or Week.
Bad Weather, Bridge Out, Road Work?
Demographics and Psychographics: Incomes, Lifestyles, and Attitudes.
Aesthetics: Sights, Sounds, Smell.
Zoning and Other Related Ordinances.
Safe and Secure.
Discover Your Area’s Microclimates.
Location: Summing Up.
11. Predict the Future.
How to Define “Bargain”.
Appraisals Shortchange Fundamentals.
Focus on the Recent Past.
Appraisals Ignore Other Areas.
Appraisals Shortchange Economic Fundamentals.
Summing Up: The Market Value Mistake.
Current Market Data.
Time on Market.
Asking Price/Selling Price.
Inventory of Unsold Properties.
Properties under Contract.
Mortgage Purchase Applications, Delinquencies, and Foreclosures.
Summing Up: The Current Market.
Boom and Bust Cycles.
Boom and Bust Myth.
Media Distortion versus Local Market Experience.
Condos: Boom, Bust, and Recovery.
Don’t Prejudge: Weigh Risks against Potential Rewards.
How to Spot a Condo Bargain.
12. Buy and Finance Your Condominium(s).
Negotiate a Win-Win Purchase Agreement.
The Purchase Contract.
Maximize Your Leverage with Owner-Occupancy Financing.
Owner-Occupied Buying Strategies.
Homeowners, Too, Can Use This Method.
Why One Year?
Where Can You Find High LTV Owner-Occupied Mortgages?
High Leverage for Investor-Owned Financing.
What Underwriting Standards Do Lenders Apply?
13. Tailor Your Lease Agreements.
Use Your Lease in Your Market Strategy.
What Terms Might You Negotiate?
Here’s How It Works.
Benefits to Investors.
14. Your Easier Path to Wealth and Income.