Foreclosure Help!
 

Ok I need some Memba Help!

I'm considering cash-buying a 2 bedroom 2 bath condo in the historic El Cortez building in San Diego (State Historic Icon)

http://www.elc.cc/

and the problem:

http://www.elcortez.info/

Purchase Price: 220k, 2 bedroom 2 bath condo, (WAY under the 750k it went for in 2004 when they we're converted)

Issues: Needs new kitchen, carpet, paint

Building Issues: No HOA Money, they are in ligitation with the developer since 2006, so the HOA is broke, so it must be a cash pay (No Home Loan Lenders will loan), I'm worried because even thou it's 400k under normal asking price, it's a cash-pay, so that is the reason, but My worry? It's a 1920's building, and a broker, HOA, what is going to happen if something breaks?

Is it worth it?

Is this for investment or resident? If it is for investment I say walk away. If HOA is in financial troubles it's going to be a while before you can sell. If you're going to live there, then you can look at it in the long term 7-10 years maybe. Personal, I would NOT touch it with a 10ft pole.

R,
I tend to agree with C above, mainly because of the HOA situ combined
with the building age. While it's situated in a mild climate, I would imagine
the maintenance is long over due on a 85 yr old structure.

Unless it's really too good to pass, I would walk or...at least look
long and hard. I wouldn't think buyers are lined up and you have to
pull the trigger in 20 mins.
GL,mD

Ryan, check with other owners who are already in the building to see what their feeling is. Since it's a condo, you'll share in whatever expense the building generates. Have they (other owners) paid any extra funds previously? Does the broke HOA owe any outstanding debt? Are property/city/income taxes and assessments current? You'd share in that expense, too. Check with the SD city government, too. Any fines, penalties, other outstanding expense levied toward the building? Is the El Cortez liable for any improvements at the street level? You'd share that as well. Do your due diligence carefully. There could be some serious costs involved, that may quickly eat up that 400K savings on the purchase, and as owner, you'd be stuck with your share of that, even if it's an inherited debt. Unless your seller guarantees free and clear title, and a title insurance policy backs that up, you could be stepping into a seriously steaming pile of dog-doo.

I know that building, and know that part of town is a nice draw for you, but you want to be sure you're not buying into a total money pit. About the only way out might be to incorporate yourself, and buy as an LLC. But as they say, your mileage may vary.

Good luck!

Dave

Sounds like the HOA screwed up big time in managing the problems. How many units are in the building? If you can buy something for $500k under what it sold for, is there another angle at play here? Can someone come in eventually and purchase all the units at a higher price than you pay for it and make some money at it? What is the highest and best use for this property? What is your downside risk?

Looks like this unit is from someone who really don't want it and if you can stomach it through the next few years and fix the problems, you could have a winner on your hands.

I don't know the building or area, but just echoing some of my thoughts.

Here in NY, historic buildings are a major pain in the ass to live in. MOdifications of any sort must be approved not only by the city but by the historic committee, dude, do yourself a favor, walk away, this has nightmare written all over it.

Same here in Boston's Back Bay. I needed a permit from several 'conservation' groups (busy-body old Boston Brahmins with nothing better to do) everytime I wanted to do anything. PITA.

:iagree: I totally agree! If you don't have the connections, don't have the funds to wait it out, don't have a workable plan, and a worst case scenario that you can live with, DON'T DO IT!

sounds like a great deal, but there seems to be too many negatives with the property. like autoxer says, if you don't have the funds to wait it out, stay away. there's a reason why lenders won't lend money on it.

I thought that entire building was renovated in 2001 or 2002... No?