How in the HECK do you value a condo?

General Real Estate Investing
1

Ok, so I am looking at condos in a thriving area.

I noticed a somewhat newly converted condo complex that starts at 100k.

In this area you won’t find a home for under 200k and most of the homes in the general area are around 300k and higher. It borders a major development.

Condos just up the road are around 140k.

From what I understand condo values shift like the wind. I was thinking that a condo would be worth 150k if 95% of the homes in the area are 300k on up, with many 400k+, but who knows.

Apartment rent in the area for a 2/2 goes for about $900. I guess you would price like an apartment since a condo is an apartment basically?

Homes in this area appreciate, in a REGULAR market, at about 10% annually and have for years now. I have no clue how much condos appreciate in comparison.

thoughts?

2

From what I’ve seen and heard from other investors, condos are the last to appreciate and the first to depreciate. Some communities here have been having some heavy assessments lately, so I’ve been a little concerned about buying condos in Austin, especially since some areas have some bad foundations.

Condo conversions are still hot, so I imagine they’re just pricing them a little below the market price of a similar property to get them sold fast. If the property was around a campus or hot area, I imagine they’d be closer to market price.

3

Look at the avarage PSF per square foot for the area This will give you a ballpark!

4

This in Vegas and the area is always hot here :smiley:

Anyway, the price per sq ft in the area (for homes) is around $168.

900 sq ft condo based on that would be 151,200 BUT this is a condo. So I guess the 100k-ish condo is a minor deal potentially. Main problem is the fact that there are 51% more condos on the resale market that last year and 17,000 conversions on the way.

The condos up the road are priced around $150 per sq ft, which is kind of high I think since it is a condo. Be better to spend a couple bucks per sq ft more and get a home.

If I could indeed get in at about 100k, there seems to be some upside.

5

I never understood why people buy them money pits. If you want to live in an apartment, rent one, it is heck of a lot cheaper.

6

Dan,

When one does not know or understand a topic it is then that he should listen and learn and not show his lack of knowledge through speaking.

Don’t mean to be rude.

I understand that a lot of newbys and wantabes come to the forum with questions and are looking for answers. The problem that I see is that other newbys are giving the answers.

This amounts to the blind leading the blind.

Your take on condos suggest that you are a young man.

The population is aging and we do not want a yard to mow, a house to paint and like being able to pull the door shut and travel. We do like all of the amenities that come with upscale condos.

Now I am not speaking of apartment to condo conversions, though I
am sure some nice ones do exist.

Condos are like people, some have more to offer than others.

7

Moneytalks, you went through the archives to dig this one up? It was posted a month ago.

I have a stalker, I feel so special!

8

If you want to see nice apartment to condo conversions, come to Vegas. They are all over. They basically clear and gut em.

I keep wondering just how many condos this place can support and they keep on selling out. It is amazing how much money is flowing into this place.

I know there are lots of people who want a no maintenance place to live, especially retirees. The question remains, just how many. Being a prime retirement destination, I am sure we have more than most.

9

Dan,

You do not have a stalker, I did go through the archives to review your past comments before responding. RESEARCH
As far as responding to a posting that was a month old, how often do you change your mind?

You seem to feel that the sky is falling.

I do agree with one comment that you made. One should focus on their own market, at least until they understand what they are doing.

Then you can venture out to better markets.

As far as markets going up or down it does not matter, if you know what you are doing.

You have to know the market that you are operating in. I am a full time investor and know my markets better than the realtors and appraisers that work in those areas. I can tell you within a few minutes of seeing a property if it is a deal for me.

You should listen more to Evergreen, he seems to have traveled many of the roads that you fear to go down.

He has made many solid comments, the one that I think needs to be repeated is that not everyone has what it takes.

You have to understand money. Many people could not make a dime if you gave them a fortune to start with. Look at your lotto winners.
Many file for bankruptcy within a year or two.

I have watched people cashout $50,000 on a real estate deal and then buy a new car, take a trip and spend like there is no tomorrow.

Then they can not service their note when a tenant moves out. You can be sure that they will blame real estate or someone else for their failure.

I hear people talk about wanting to flip a property, so that they can pay off their credit cards. If you have a lot of consumer debt, you have not learned enough about money to be good at investing.

You are simply asking for what seems like a more dignified handout. Not much different than a Vegas gambler or a lottery wantabe winner.

I do not see many people in this forum talking about working on their credit reports. This is a must. Being responsable is the key.

This business, even though it does involve houses, condos, strip malls or whatever is not about them. It is about understanding money, wealth, responsibility, credit, bankers, contracts, financial statements, etc.

I can tell in a few minutes of meeting a person, if they are good stewarts of money and so can your banker.

You want to talk about risky ventures, deal with someone that is not responsible with money or does not strive to do what they said that they would do.

I know that a lot of people with good intentions have bad credit and think that if someone would just give them a chance, they would do great. Most often this is not the case. People will do, what they have done. This why lenders want to review your credit, it tells the story.

First, deal with the problem. Work at making your finances right. You may have to cut back on pleasure items, work harder and/or smarter.

Create a picture of being financially responsible first or you will just dig yourself a deeper hole.

Moneytalks

10

Credit is indeed important. I know so many people who think obtaining a credit line is a license to shop. They then wonder why they get no where.

Credit is very important. When I was 18 I got lots of credit and me and my wife messed it up. Turns out it was a blessing in disguise. I have been an all cash man ever since. When I wanted something that cost $1000, $5000, etc, I would go out and earn it. The only debt I see fit to acquire is mortgages.

It is sad when I talk to people who pay hundreds a month or more because their CC debt is now $20,000 or more and they have nothing of value to show for it. Meals, a trip, and other depreciating disposal items.

So many people think having a dollar means you get to spend a dollar. It is our society.

Someone just killed thousands of innocent people in NY. What do we do? Go out and shop it off–as per instructions from our leadership.

If you can’t afford it, don’t buy it. Simple but so complex to many at the same time.

Well thinking is a lost art.

11

Evergreen,

I agree with many of your comments.

After reading my last post I want to inject a couple of other comments.

I am strong on past performance, whether it be in the market place or in the people that I deal with.

For those out there that are starting with next to nothing, I want to say that you can do it, the question is are you willing to change yourself enough.

The best at this will tell you, that it is as much about being is it is about doing.

You have to think different than you ever have before. You have to think different from most everyone that you know. You have to resist their “Dan type” domes day comments. They will put more effort in to stopping you from trying than they would in trying to succeed themselves.

Sorry Dan, but at least everyone knew what I was saying.

Rich Dad’s cash flow quadrant will help you understand why you need to change your thinking from your past way of thinking.

Can you make deals on real estate with poor credit and limited funds of course. It will be like digging a basement with a shovel, it just takes longer to get where you are going.

No matter where you are starting from, YOU HAVE TO MAKE OFFERS.
Many, many, many offers. If you are not making offers, you are not buying property right. You are only buying what others are selling you.

Make the offers suite your needs.

We all know guys that would ask every woman they meet for a kiss. They get rejected alot, but they will get a kiss every once in awhile, and so will you.

It is not important to get every deal and you should walk from most.
What is important is that what you do buy, you buy right, with terms that you CAN handle.

Everyone of you should keep improving your financial picture.

  • Financial statement - start one now.

  • Credit report - You can use a service like truecredit.com to pull your own credit, learn how to read it, for these two items make up your financial picture. There are ways to improve them. Also True Credit has a service that emails you when any changes, like inquiries or new accounts are posted to your credit report. Know what it says at all time.

Do not approach this as a get rich quick scheme. It likely will be quicker than most anything else you could do, but you are going to spend years fine tuning yourself, your skills and your financial picture.

If the thought of work bothers you, walk away now.

Most people think that I do not do anything, yet I keep myself very busy and this is where many will fail.

Who is going to make you get out there and work it? Who is going to fire you, if you don’t? Who is going to pick you up when you are down? It has to be you. It is about you, your life. You must apply yourself everyday.

Self-employed = Boss/employee

You are your own employee and as the boss you must be demanding of your employee. Demand results.

As the boss you have many hats to wear and must be demanding of yourself or your employee will not have a place to work.

Keep it honest.

About this whole market up / market down thing, it does not matter which it is, you can make money it both. Make offers.

I like making offers on pre-construction, when a hurricane is just a few days away, some sellers become afraid. Common sense will tell you which properties will not likely have any damages and so what if it does, the developer will have to fix and finish, before I have to close and I’m not responsible until I close.

*Buy when others are selling and sell when others are buying.
*Get most of your gain when you buy and you will be able to handle some downturn.
*Know your value before you make an offer, work from value backwards.
*Appraisers are not always right, know your market.
*Bankers and loan officers do not know as much about money as you would think.
*Experience is something you don’t get until just after you need it.
*If you want the rainbow, you’ve got to put up with the rain.
*Fortune favors the prepared mind.
*If everything seems to be going well, you have obvisously overlooked something.

On flipping:
The early bird may get the worm, but it is the second mouse that gets the cheese.

Well that should be enough food for thought for now.

No Dan, I am not a realtor. I am the CEO of my life and I am great at my job.

CHATTERWEB, did you recieve the information?

Good night,
Moneytalks

12

money talks,

I enjoyed it when you said I can tell in a few minutes of meeting a person, if they are good stewarts of money and so can your banker.

That really hit home because I know that I am not! that is so true I can as well.

That is why if you are not good with money and have odd spending habits at least make enough $$$$$ to support your habit!!!LOL thats me thats how I do it!

What I am sayong here is that I know that my mortgages are just over 97k a month and those are my mortgages so I need to make 97k a month to cover them they are my debt. Then my rents become income!