Skip to main content

Is This Condo Purchase Financially Risky? Reserve Gaps & Roof Replacements

I’m considering buying into a 10-year-old condo community—townhome-style units in a mid-size HOA—with some financial flags I could use help interpreting.

The property looks good on the surface, but:

• Roof replacements are happening this summer for 3 buildings, even though there’s no reported leakage.

• All units are getting attic vent replacements and minor roof work to stop ongoing patch repairs.

• The HOA (38% reserve funding) dipped into their monthly operating funds last year to cover emergency roof repairs—about $15K—rather than using reserves.

• Right now, monthly dues are $430, but only $150 of that goes into reserves. The reserve study recommends contributing closer to $350/month/unit, meaning there’s a sizable gap. I’m pretty sure HOA won’t agree to it.

• If they don’t increase funding, future special assessments could run $15K–$22K per unit, especially as full roof replacements are scheduled for 2040. That does not seem too drastic right now…

• Management is changing this August, and the board is also reviewing landscaping contracts—so there’s hope for cost optimization.

I know HOAs tend to hit big maintenance cycles around the 10–15 year mark, but this feels like it’s coming on fast.

Is this kind of reserve shortfall and early roof replacement normal for a 10-year-old property? Would you walk away, or negotiate hard and brace for future assessments? ( I was able to bring price down by 15k )

Overall, the unit I am looking at seems very clean and Inspection came through with some minor cosmetics issues, which caller got fixed.

Looking for perspectives from anyone who’s gone through this or dealt with underfunded HOAs. Thanks!

submitted by /u/jeb_indian
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/1lxurvt/is_this_condo_purchase_financially_risky_reserve/
Labels:

Comments

Post a Comment

Popular posts from this blog

Aren't comps/CMAs useless with buyer credits at close happening now?

I'm looking into buying a new construction townhouse in my HCOL US city. I'm seeing builders offering interest rate buydowns worth $20k-$60k on $800k homes (rather than just lowering prices) in order to keep their comps high for their other units, now that buyer demand has been declining. I asked my agent about these, and he said these buydowns aren't even the full story: buyers can write all kinds of other credits into an offer, like their closing costs, prepaid sewer fees, etc. Apparently cash buyers can just write in a "buyer credit at close" for any amount in their offer. So a new townhouse that appeared to sell for $800k in the MLS might have actually been a cash offer with a $100k+ buyer credit at close, meaning the buyer only spent $700k or less in total, but to the rest of the world they can only see the $800k! So that made me realize I can't trust comps/CMAs for other new construction townhouses. The sales prices could be way lower than they appear...
1 comment
Read more

How to Avoid Property Scams in Delhi?

Here’s What You Should Know! Commercial Real Estate (Non-Residential) Buying a property in Delhi can be tricky, especially with all the stories about scams and shady deals. If you're in the market, here are some tips to keep yourself safe:Double-check the documents: Always verify ownership and approvals. Don’t just take someone’s word for it—look at the actual papers. Do your homework on prices: Compare similar properties to avoid overpaying. A little research can save you from a bad deal. Work with trustworthy people: Whether it's a seller or an agent, go for someone who's transparent about pricing and the process. If they’re dodging questions, that’s a red flag. Ask for reviews or references: If someone you’re dealing with has a good track record, they won’t hesitate to share testimonials or connect you with previous clients. I’ve noticed that some property services have started focusing on things like verified listings and clear communication, which makes the whole proc...
Post a Comment
Read more