Author Topic: Buying Condo from landlord  (Read 430 times)

cj25

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Buying Condo from landlord
« on: May 09, 2019, 02:00:47 PM »
Someone talk some financial sense into me.  Haven't posted in awhile, but I am at a housing/life altering decision place and I am overwhelmed.  We moved into the condo we're renting 4 years ago, as just a way to get our rent lower and pay off debt.  It was only supposed to be 2/3 years, but I ended up leaving my FT job and am just working a part time gig due to some health issues.  But we've managed very well decreasing & not going into more debt on my husband's salary (he's got a new job paying more & a short commute).  It's been really great but now our landlord announces he is selling the condo.  This is the 4th house we have to move out of in 6 years.  I am tired of this game.  So part of me just wants to buy the condo.  Income about $115k. It will be sold for about $400k with a $350/mo HOA fee.  Landlord said he would give a small discount since he wouldn't have to find someone else, but I would like still to use a realtor because I have NO idea everything that needs to be done.  We have about $13k in savings.  And could pull a bit from IRA, to get in, or find some crappy no downpayment program.  But we never wanted to live in a condo.  We love house living.  My husband does not want to buy it and since he has the option to work remote from anywhere, would like to move to a cheaper state (we're in CA) and buy what we want eventually (3/2, large yard for dogs/gardens/chickens, a drive way to wash my car/car repairs, etc). 

My mom lives nearby and does not want us to move (other family has bailed out of state).  I do not want to lose out of the last thing we could potentially get into in CA.  But even if we bought, our total payment would be around $2900 and we could not rent for that (currently could get maybe $2400) if we wanted to move away. Also, we the condo has not been maintained by our landlord at all and needs a new HVAC system, new garage door track/opener, dishwasher, blinds on every window (the paint flakes off when I try to dust), new bathroom flooring and carpet on stairs and bedrooms (it's 800 years old).  The parking here is also a disaster, which almost causes us to have a curfew because we need a spot.

Condo sold for about $450 in 2006, sold again for $255 in 2011.  It never fully recovered and I feel like we would be stuck here for a long time since the market is already feeling "peaky". 

Someone remind me that this is not in our financial best interest. I know we don't have the funds but I know some people just make things work, just to get your foot in the door. 

Cassie

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Re: Buying Condo from landlord
« Reply #1 on: May 10, 2019, 11:32:36 AM »
Based on everything you wrote it sounds like a bad idea. I totally understand being sick of moving.

theoverlook

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Re: Buying Condo from landlord
« Reply #2 on: May 13, 2019, 06:48:14 AM »
What are you paying to rent it right now? What does a comparable condo rent for - the $2400 you mentioned?

waltworks

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Re: Buying Condo from landlord
« Reply #3 on: May 13, 2019, 08:04:15 AM »
Sorry mom, we're moving away.

Seriously, a $115k income (you guys have no kids, right?) should let you save scads of money and buy a house... but not in CA. Move somewhere you want to live and visit your mom frequently.

Do NOT buy the condo.

-W

Another Reader

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Re: Buying Condo from landlord
« Reply #4 on: May 13, 2019, 08:27:10 AM »
You cannot comfortably afford the condo. It needs a lot of work and does not meet your needs.  Either find something else to rent, or cut and run.

Real estate in California does not always go up.  In fact, it's been going up for a long time now and is priced for perfection.  Increase unemployment a few points and bump up interest rates, and prices will drop significantly. 

Rent with the idea that you will buy something that meets your needs when prices drop.  If that does not appeal to you, you need to move elsewhere.  Maybe talk mom into moving as well.

sideHustler

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Re: Buying Condo from landlord
« Reply #5 on: May 13, 2019, 02:57:23 PM »
I'm new to these forums. Can someone explain what he's doing wrong?

Dicey

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Re: Buying Condo from landlord
« Reply #6 on: May 13, 2019, 10:40:04 PM »
I'm new to these forums. Can someone explain what he's doing wrong?
Note that the OP indicated a debt problem and did not say that it was resolved after four years of lowered housing costs. Huge red flag.

Typically, condos do not appreciate as well as single family homes. Further, home ownership is expensive, even under the best of circumstances. The OP is not prepared to buy a house financially or mentally and this one sounds like an utter piece of shite. They don't have the reserves to manage all the deferred maintenance. Further, a Special Assessment, which happens frequently in HOAs, could sink them. That's just a short list of reasons why.

Once you've been around a little longer, you'll understand why "What Walt (of @waltworks) said" is always the right answer. And Another Reader is no slouch, either.


ysette9

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Re: Buying Condo from landlord
« Reply #7 on: May 13, 2019, 11:00:32 PM »
In addition to everything Dicey said, the purchase price would be just around 4x annual household salary which is a usual max rule-of-thumb for housing affordability.
Except that doesn’t take a monthly HOA bill into account. That pushes it past affordable in my book even if the OP had a 20% down payment and cash to pay for all of the repairs that need to be done. Any one of these things would make me vote “no”. The combo of them all makes me want to advise the OP to run for the hills.