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Visitor
Sammy2013
Posts: 4
Registered: ‎02-25-2013
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How much cash should I offer for this unit?

http://www.redfin.com/CA/North-Hollywood/5232-Satsuma-Ave-91601/unit-101/home/28618023

 

I'd like to make a backup offer in the event this deal falls through.  I've been told the complex is 50% owned by one investor so it makes loans not possible.  Is 240k fair?  Should I offer less or more? 

Gold Regular Contributor
sheriff
Posts: 2,342
Registered: ‎06-01-2012

Re: How much cash should I offer for this unit?

[ Edited ]

I would not offer on it.  There is a reason banks won't make loans on properties where one investor owns 50% or more of the units.  They have complete control over what happens in the building.  They can set HOA fees, decide who to give maintenance contracts to and how much to pay them (think family and friends), in some states they can even decide to convert to apartments and do a forced sale.  I don't know if this is legal in California, but I read of a case in Pennsylvania where this happened.  The other residents fought for years to get fair value on the sale.  I think the case is ongoing.

 

Edit - Here is the link to the story.

 

http://realestate.aol.com/blog/2012/06/27/this-is-crazy-company-snatches-condos-from-owners

Visitor
Sammy2013
Posts: 4
Registered: ‎02-25-2013
0

Re: How much cash should I offer for this unit?

Excellent advice Sir.  I'm not putting an offer on this either thanks in part to you.

Silver Regular Contributor
WheelinDealin
Posts: 562
Registered: ‎01-25-2012
0

Re: How much cash should I offer for this unit?

[ Edited ]

sheriff wrote:

I would not offer on it.  There is a reason banks won't make loans on properties where one investor owns 50% or more of the units.  They have complete control over what happens in the building.  They can set HOA fees, decide who to give maintenance contracts to and how much to pay them (think family and friends), in some states they can even decide to convert to apartments and do a forced sale.  I don't know if this is legal in California, but I read of a case in Pennsylvania where this happened.  The other residents fought for years to get fair value on the sale.  I think the case is ongoing.

 

Edit - Here is the link to the story.

 

http://realestate.aol.com/blog/2012/06/27/this-is-crazy-company-snatches-condos-from-owners


That article is definitely an eye opener. Never could imagine something like that happening.

 

Personally I stay far away from condos in Los Angeles. Never had a good experience with the HOA's. Boards comprised of too many incompetent people who are drunk with the little bit of power they possess.