Sold car, downsized, moved closer to work, was it a mistake?

[merryt]

About me:

• I currently make 72k, with a fair amount of growth potential
• I live in a high COL city (Denver CO).
• I am in a committed relationship but no finances are merged
• No debt, old savings rate was around 50%

About the Property:
Market Value: 240k
Original Purchase price: 218k
Original Mortgage Amount:198k
Interest Rate: 3.5
Mortgage Term: 15years
Term remaining: 15 Years
Amount remaining on mortgage: 198k
Gross Rents:  I currently live in unit, to rent a similar unit would be 1600-2000
HOA costs: 220
Deferred maintenance notes: Roof has insurance claim out against it, other HOA negligence type things, brick work etc

Back story:
My GF and I lived about 30 minute drive from both of our offices, we were carpooling together, but traffic and miles placed on car were pretty stressful, and I wanted to own a home for emotional reasons. We decided to move closer to work, and drop down to one car. The housing market is pretty crazy so finding a place was challenging, we found a 1 bed 1 bath condo walking distance from our offices for ~220k. I only had cash on hand to put down 10%, so on a 15 year mortgage @3.5% with HOA its a payment of around 1700 a month. Renting a comparable unit would be around 1500-2200 a month. 1700 would represent 45% of my income (after taxes, and 401k etc), or 25% of both of our incomes after taxes. Prior to moving in we did some research on the HOA, everything seemed okay. So we pulled the trigger, sold a car, and bought the place. My GF and I split all house related expenses 50/50, with the exception of maintenance.

With in the first month of moving in there was water damage to two of the units causes by a leaky radiator. Radiators are the responsibility of the unit owner (in the bylaws) The unit with the leak is owned by the HOA president, and the president thinks that the leak should be covered by the HOA insurance. So she filed a claim...

After finally being able to access up to date financial information, I am realizing that the HOA sent over some false information during the buying process to encourage the sale to go through.
Since doing my inspection there has been water pooling up on the roof and has started to cause damage. I know that it needs fixed, but I worry this won't really be the top priority of the HOA, since the water damage from the leaky radiator will result in depleting our HOA reserves fund down to zero. I know the roof will need replaced soon, and will end up a big expense, that I will need to convince others on...

Questions:
The insurance company sent out a claims adjuster for the leaky radiator, If the bylaws state that the radiator is the owners responsibility can I trust to insurance company to pursue the responsible party?

Is there anything I can do to encourage the roof repair to go through, despite requiring special assessment?

Did I buy to much house? Its a sad that 1 bed 1 bath may be to much

Any other generic advice for my situation?

[seattlecyclone]

You don't want to get behind on maintenance. Convince your neighbors that they need to raise their dues to account for the work that needs doing.

I won't really comment on whether you paid too much. A common standard for "affordable" housing is that it should cost less than 30% of your take-home pay. Sounds like you're borderline there with your combined income, but many people in high COL areas are above this and it can work out all right as long as you bring in a good income and are otherwise pretty frugal.

Maintenance issues aside, how do you like the new location? Personally, having a short commute and living in a place where we only need to hop in the car a couple of times a week are both great things for our sanity.

[merryt]

You don't want to get behind on maintenance. Convince your neighbors that they need to raise their dues to account for the work that needs doing.

I agree 100%, I don't know what I can do to "convince" them to move any faster that the insurance claims.

I won't really comment on whether you paid too much. A common standard for "affordable" housing is that it should cost less than 30% of your take-home pay. Sounds like you're borderline there with your combined income, but many people in high COL areas are above this and it can work out all right as long as you bring in a good income and are otherwise pretty frugal.

Does the 30vs15 year mortgage have any touch on what is "affordable"? My theory was the lower rate, increased time to safe loan to value ratio, and all the benefits of being closer to work made it worth while.

Maintenance issues aside, how do you like the new location? Personally, having a short commute and living in a place where we only need to hop in the car a couple of times a week are both great things for our sanity.

I LOVE the new location. not having a to own a car, and being able to walk/bike to work for both the girlfriend and myself is awesome! Just trying to make sure I am not losing money on the condo... if thats possible...

[merryt]

First of all, you already made the decision and purchased the condo.  I wouldn't let something small like a batty HOA president trying to weasel out of repairs they are responsible for put you off.  The bylaws state that the homeowner is responsible for the radiators, so they will need to pay for the necessary repairs -- not the whole condo association or the association's insurance company.  This seems pretty straightforward.

I wish it was that straightforward, I showed all of the people in the HOA the bylaws showing its homeowners responsibility, and 1/2 the people in the HOA felt that it was an act of good there for covered by the HOA insurance, not the units insurance. The 1/2 that felt it was HOA responsibility controls a larger share of the votes.

The bigger issue is the lying about the status of the building's financials and, related to that, the control of the HOA.  You need to get the current president out ASAP.  Prepare for an ugly battle, but it is necessary to protect your financial interests.  We had a situation EXACTLY like this (minus the radiator damage) in our NYC coop.  Small building, 10 units, split about equally between long-time owners and new buyers.  Necessary maintenance had been deferred for years and we were told when we bought that there would shortly be extra assessments for a new roof, pointing, and new windows for the entire building (limited options due to historic status of building).  Then, after we moved in, the long-time tenants (who controlled the board) kept putting off the maintenance saying they couldn't afford it.  Eventually we basically had a coup, and with the exception of one long-term tenant who remained as treasurer who did not oppose the necessary work, the rest of the board positions were taken over by new owners.  He was actually the swing vote and the other old time tenants hated him after that.  Anyway, in our case due to the small number of units it was actually pretty straightforward for us to gain control and get things moving.  You will want to start figuring out the politics in the building (read the association meeting minutes for the last couple of years, and then try to get to know/talk to people who raise issues or concerns you share) and build a coalition of people who are responsible financially to make sure that the necessary maintenance gets done in a timely way.  Try to get some of those people on the board, or at least make sure they all show up to board meetings to vote on things.  It will only be more costly the longer you defer it.

Thank you so much for the good advice, I think that is going to be the only way to get things moving in the right direction. HOA president is planning on selling this summer, so hopefully desire to sell will give me a little bit more leverage to get that maintenance done until I can get the whole HOA reform in place.

[ohana]

Our HOA is trying to make a decision about hiring an engineering firm to come in and give us a 20 year plan for maintenance.  After several costly mistakes in how we made choices, and who we hired to do what when, this would be a proactive approach.  Unfortunately it would also mean a $300-$400 special assessment.  I would consider this a good investment; others simply can't afford it or think it's wasteful.

You might want to consider proposing this to your HOA; you'll probably have the same reaction, but I think it would save money in the long run!

[frugaliknowit]

If the radiators are the unit owners' responsibility, I fail to see why the HOA's insurance would cover the damage.  I would think that you would contact your Homeowner's insurance company, who would then go after the offending unit owner's insurance company (at least that's how things work in my condo bldg; however our radiators are the HOA's responsibility...).

Most of what you are describing is normal condo crap that we all have to put up with.  Nothing to freak out about.  I've been in a battle for years with my HOA about something no one wants to take responsibility for...finally I have the City on their butts...

Did you and your GF buy it together (sounds like it...)?  The only reason I ask is that if not, she should really be paying 50% of rental value, not 50% of expenses (which may or may not be the same)...

[merryt]

If the radiators are the unit owners' responsibility, I fail to see why the HOA's insurance would cover the damage.  I would think that you would contact your Homeowner's insurance company, who would then go after the offending unit owner's insurance company (at least that's how things work in my condo bldg; however our radiators are the HOA's responsibility...).

Yea, that is my understanding as well.

Most of what you are describing is normal condo crap that we all have to put up with.  Nothing to freak out about.  I've been in a battle for years with my HOA about something no one wants to take responsibility for...finally I have the City on their butts...

Thank you so much for the "this is normal." Its a bummer that this is what people should be expecting, but I guess thats the way it is.

Did you and your GF buy it together (sounds like it...)?  The only reason I ask is that if not, she should really be paying 50% of rental value, not 50% of expenses (which may or may not be the same)...

Nope, I paid downpayment, and I cover all maintenance and special assessments. We have had long discussions on what is a fair amount to pay when she purchased her place. Some decisions would be really different if we were renting VS buying. So we decided to do 50% of mortgage/HOA. 

[merryt]

Our HOA is trying to make a decision about hiring an engineering firm to come in and give us a 20 year plan for maintenance.  After several costly mistakes in how we made choices, and who we hired to do what when, this would be a proactive approach.  Unfortunately it would also mean a $300-$400 special assessment.  I would consider this a good investment; others simply can't afford it or think it's wasteful.

You might want to consider proposing this to your HOA; you'll probably have the same reaction, but I think it would save money in the long run!

Good idea!!! I am going to try and pitch that, after we get some obviously important things done

[Jack]

Does the 30vs15 year mortgage have any touch on what is "affordable"? My theory was the lower rate, increased time to safe loan to value ratio, and all the benefits of being closer to work made it worth while.

The "30% of take-home pay" rule-of-thumb is based on renting or a 30-year mortgage amortization. Since you're spending less than 30% of your (combined) take-home pay with a 15-year amortization, you're fine (at least by "normal person" standards).

Most of what you are describing is normal condo crap that we all have to put up with.  Nothing to freak out about.  I've been in a battle for years with my HOA about something no one wants to take responsibility for...finally I have the City on their butts...

Thank you so much for the "this is normal." Its a bummer that this is what people should be expecting, but I guess thats the way it is.

That's why lots of people prefer single-family detached houses.