Expert: Tami Coleman-Maro - 6/14/2009

Question
My family just visited Gulf Shores, AL.  We found a 'short sale' condo we are considering buying as an investment property.   Can you recommend a broker for this loan with the LEAST amount of down payment necessary...I have good credit, but don't have a lot just sitting around to put down.   Are they any purchase programs (incentives, gov't programs, etc) available for these types of purchases? Also, do most of these beachfront condos, assuming they are priced competitively, and all mgmt and accommodations assumed equal...do they usually break even or better?    This condo will be $175,000 purchase price (approx.)...rents around $1150 during the peak season.  Condo fees are $400/mo.   The prop. mgmt agency we talked to charges 25% commission on the gross.  Just wondering how much this will 'cost' me versus how much will pay for itself.   Thanks for the advice! (What is 'typical'?)

Answer
I am not aware of any programs available to help you purchase and I am in South Carolina, so I cannot even recommend anyone.  The most important issue would be to look at the past performance of these units and make sure that the entire property is not going to fall in shambles....how many are going through short sales, which is almost a form of foreclosure.  
Also, note that the regime over the condo fees can raise those fees according to their by-laws - so be sure to get a copy of those with the restrictions.  Are you able to rent the unit on your own?  25% property management fee is the norm, but make sure you are getting 25% worth of management.  Out of area owners really need to make sure their property is being cared for properly.  Fairly, I can't tell you if the cost will pay for itself...there are too many variables.