High HOA

I made an offer to a condo. Very attractive price, $23,000. Rent can be $700/month.

There are multiple offers, so I made $27,000.

Soon after, the seller send me a document to sign: buyer acknowledge that the HOA fee is $465/month!

I was shocked! All other expenses considered, there is no money at all in it. There could be monthly negative cash flow.

The reason is that this is a two bedroom unit. The one bedroom unit in this complex is extremely small, less than 500 sqft, but the two bedroom unit is more than 900 sqft, this makes the size of the two bed twice the size of a one bed, and the HOA fee is calculated on size. So the HOA fee of this unit is twice of the fee of a one bed unit.

Also, because of foreclosure, lots of owners stop paying HOA fee when they play to go to foreclosure.

I backed off from the offer.