Following up with a Quick thread on some pros and cons on certain types of condos for breaking into RE investing in today’s environment. Multifamily cap rates/returns have fallen as institutional money has flooded in RE. Many areas people are priced out of SFR and MFR already…
For people who are experienced and/or intend to do deep value add obviously you don’t really want to touch condo’s. Dealing with hoa’s is generally a nightmare especially if doing extensive renovations. However for buy and hold with modest touch ups there can be some sweet spots
Although hoa fees are generally an inefficient use of capital I do find I get some return when it comes to condo rentals. Not having to coordinate logistics of lawn care or snow plowing removes pain points. The grounds are always nice to show a new prospective tenant
I think experienced investors can have a hard time budgeting for deferred maintenance so I know inexperienced ones must too. If I buy a 1900’s triple decker with 3 boilers, old siding, a roof that has 5 years left etc… it’s not going to be easy to budget out of cash flow
To be clear this is not me being anti SFR and MFR in favor of condos in totality. I’m saying todays prices will price many younger people out of these options and it’s good to familiarize yourself with the pros and cons of the next best alternatives
Some of the negatives for condos include worse appreciation and difficult hoa boards. And a $300/mo hoa fee would buy an extra $65k of house with current rates. It’s not all sunk money but some of it is. And if you have bad neighbors it may also negatively impact your tenants
For putting up with these tradeoffs you can compete against generally lesser competition, have properties that are easier to self manage, require less startup capital and reserve maintenance, and offer better yields/cap rates even after HOA fees then some alternatives
Also review the condo docs and budgets before proceeding with a purchase. Make sure there are at least close to adequate reserves for roofing/siding/big ticket items so that you aren’t hit with large special assessments on top of normal dues
I prefer to target larger complexes which are professionally managed so that any unexpected expenses are split over many units and generally not too big. You can also see how many owners in arrears with their dues before proceeding to assess the health of the association
Hopefully there are some good tidbits here that may help some people. Some of the bigger accounts of #retwit are the ones buying the whole buildings, so it’s good to have content for the people still climbing the ladder like myself as well.

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More from @therealGGBMAN

9 Jan
I’m Gabe, I’ve been lurking #retwit wanting to engage more so I’m going to give this a go. I’m small potatoes compared to @realEstateTrent and some of the giants here but figured I would give a little background and current thoughts in case anyone finds it interesting.
2021 was a big year for me! I cashed out some crypto profits and had a great year of poker in a challenging environment with Covid. I paid off my first property (cool feeling) and bought 2 more which are rented and cash flowing well.
My wife and I welcomed our second son in October as well so it’s a full and blessed year. (I can’t wait to sleep why I am tweeting 🤣)My motivation in RE is building passive income to supplement my poker income and eventually pay for kids kids college/our retirement passively.
Read 9 tweets
6 Jan
I am a #BTC centrist as well. The only thing that matters is not playing around loosely with layer 1. Outside of that, things built on BTC will create value for it. Many newcomers don’t even remember BTC used onboard the entire alt economy and that did not hurt BTC
You can be a bitcoin centrist and still believe that most other projects are scams/overvalued. You can believe BTC is unique and special compared to other non POW projects. You don’t have to renounce any of that. It’s just about realizing the best way to play the game
People have made a lot of money this cycle in non BTC cryptos. What’s going to make them take a deeper look at bitcoin and it’s unique properties? Calling them scammers/dumb shitcoiners or congratulating them and encouraging them to zoom out and roll some profits into BTC?
Read 5 tweets

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