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Yup, a buddy of mine finally accomplished his dream of buying a condo. Single dude, works hard, makes decent money for a ski town, better than a lifty anyway. Now his HOA just got assessed thousands of dollars and fees will be goin up a lot. Now he might have to get a side hustle like selling drugs or something just to cover it. Pisses me off, these are the kind of people we need around here.Quote:
Originally Posted by yeahman
Due dillegence on the reserves
Go to the meetings
Understand that an HOA is a rotating cast of business partners you do not control
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Nobody saw a 400% increase in insurance premiums coming. Normally i would agree but this is a new trend, at least around here.Quote:
Originally Posted by Foggy_Goggles
Thought this website was interesting. It tracks prices and YoY inventory growth across pretty much every zip code. Here is Denver Metro
When I think assement I think special assessment not dues. But yes 4x increase in insurance does suck.
Sent from my Turbo 850 Flatbrimed Highhorse
Not 4x. 10x Like $40k for the building per year went to $400k. In the middle of the year. Insurance dropped them, and the only insurance they could get was $400k a fucking year!Quote:
Originally Posted by Foggy_Goggles
JfcQuote:
Originally Posted by Name Redacted
This. I'm on my second go-around as a board member with our new HOA. Lots and lots of stupidity spewed from neighbors who are not involved/informed and from those who step into the dynamic with solely a personal agenda.Quote:
Originally Posted by Foggy_Goggles
Our old HOA up the hill just had to do a small $800-2000 special assessment on units because they overspent on repairs and stuff in 2023. Owners freaked out like the sky was falling, but at the end of the day the Board had been cutting corners, knowlingly underfunding and had made poor planning choices for the last few years, all in a attempt to suppress dues increases. As aforementioned here: insurance and every cost of doing business has ramped up well beyond presumed 3-5% per year dues increase and most local HOA's here simply don't want to accept that they need to increase their dues 10-15% to deal with it. In our little affordable housing reality here there are a lot of entitled cheapskates who assume because they "won" their unit that everything else should be cheap and costs shouldn't increase.
People like that are really fucking annoying.Quote:
Originally Posted by alpinevibes
HOAs seem really fucking annoying.Quote:
Originally Posted by skaredshtles
May I never have to deal with them. <knock wood>
Yeah, in our search for a place everytime I saw "HOA" on the listing it was an immediate "I'm out!" Spending X amount and some board of idiots telling me what I can or cannot do. They're are benefits I know, but they don't offset the negatives for me personallyQuote:
Originally Posted by Meadow Skipper
What did that work out to per unit? Is the insurance mandatory? At a certain point, insurance not worth it. Like paying 20k a year car insurance for a 50k car.Quote:
Originally Posted by Name Redacted
Honestly, not sure yet. It is in progress. People are freaking out. And yeah, self insuring becomes a topic at this point. No idea how that works.
We ended up (without really thinking about it) in a neighborhood HOA where everybody has 10 acres lots. Road maintenance is the main reason for the HOA because we're a few miles out of town. But our main road is now very popular among the general public because it leads to a trailhead. It's a milled surface, not dirt but not technically paved. But all road maintenance costs are through the roof these days. So we just had a vote on raising our dues for road maintenance that will need to be done in like 2028. Our feeling is that the county needs to take over the responsibility because the road is so well used, as opposed to 1976 when the HOA was formed. So we voted no, even though I don't object to paying my share in 99/100 circumstances. Anyway we actually have some pretty good people running the thing so that's good. It's just that changing times have changed the circumstances in terms of who and how much use the road gets.
I’m going to lay out a specific scenario here I’m dealing with to get this groups’ feedback cause I’m super torn and despite being a bunch of dentists, I appreciate the expertise in here. Personal details of my life be damned I need help.
Have a house in Seattle that I rent out. Great tenants but they are now on a month to month as they may want to buy their own place this summer and we didnt want to put them in a position of signing a new 1 year or moving out.
Not sure what it would sell for and can’t trust those stupid Zillow estimates. Zillow has it at 1.1M but it’s not taking into account some factors that I think increase it. Sub 3 interest rate. Currently clear 900 bucks above mortgage on it each month but we haven’t raised rent for a long time and if tenants move out and we rerent, we could get another 400. Owe around 400k on it. Clearly a nice spot to be in BUT…
It needs about 200k put in it to completely redo 3 levels of decks, pergola, etc. May need a new roof soon too. And as great as my tenants are, I don’t really feel like being a landlord anymore.
I think I could sell it in its current condition despite the deck situation and get out from under it. I could take the dough and conservatively invest it to basically outpace the 1400/month I would otherwise get above my mortgage. And I’d obviously need to keep it long enough to recuperate my 200k outlay.
I don’t want to cut this size of a check but maybe I should. Would you sell the headache or double down and keep? Approached tenants about buying it but they are looking for something bigger.
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I am so happy we have 2 free and clear rentals. Would of had 5 but I sold them when business collapsed around 2000. I should of hung in there and not sold.
So ya, I would keep it if at all possible.
Mrs. PDX and I have been renting an ADU and our old PDX house for the past couple of years to both family and non-family and I agree that being a landlord isn't all it's cracked up to be.Quote:
Originally Posted by Art Shirk
I've been poking around with some assumptions. If we assume that Seattle houses continue to appreciate at 10% / year for the next 3 years, doing the repairs and holding for three years winds up behind selling this year and investing in something that gives you 8% a year. Would need more details on the loan to get a better picture, but it looks to me like spending that $200k in repairs puts you so far in the hole that you need to hold the house for six or seven years for that to pay off.
If you were willing to hold long term, that's the way to go. If you're going to sell anytime in the next 5 years, there's no time like the present.
Neither a dentist nor a CFP, it would be good to have someone who knows what they're doing take a look at your specific sitch with more exact numbers, but basically it takes a long time to make up for throwing $200k at repairs today when the house is appreciating 10%/year but you're losing that $200k off the top and stocks are doing 8%.
What is your tax basis?Quote:
Originally Posted by Art Shirk
How much of the 200k will raise the sales price if you do the improvements and then decide to sell after renting for a short while?
Generally the insurance is mandatory. More specifically, the HOA has lien rights. So if you don't pay the dues or assessments, the property could be foreclosed.Quote:
Originally Posted by xyz
https://www.ltgc.com/resources/hoa-l...0is%20required.
You would also, if you have one, be in violation of the terms of your mortgage. But in Colorado, you are no required to have your HOA paid by your escrow. So that gets fun.
I know nothing about the particular condo complex and it is supper easy to hate on insurance companies, but deferred maintenance, the ski town real estate machine and head in the sand owners shared the responsibility.
Here is a real world situation for my hood. Complex is built like shit in the late 90s. Roof decks leak, drainage plains are all wrong. HOA settles and get a pile on money. HOA decides to do the bare minimum repairs and pisses away the rest on other projects and keeping the dues low. Every year a few units will have substantial water damage. Unit insurers catch on and subrogate to the HOAs master insurance.
So boom! Now its on. Its difficult to get unit insurance because the history is out there. The HOA master insurance is on shaky ground and the complex needs something like $5million in repairs.
So you can fling shit all you want, but if you want one entity to blame, it really is the legislature for basically not requiring HOA to follow standard accounting practices.
It gets worse when you know a lot of them gamed the system to win their unit in the first place.Quote:
Originally Posted by skaredshtles
If you were to cut the check to fix and keep, what is your realistic timeline before selling then? Without knowing the whole picture, I think you are looking at 10+ years to make that money back, and at that point, you are probably looking at least one other big ticket fix which further extends the timeline.Quote:
Originally Posted by Art Shirk
I'm pretty bearish on Seattle real estate though personally, at least in terms of 10% a year thinking.
As someone who is pretty aware of insurance markets this seems really odd and driven by something other than market increases. Where are you located and was there a recent claim or significant issue found on inspection?Quote:
Originally Posted by Name Redacted
Art, my experience is that Buyers tend to underestimate the the cost and value of the repairs. Said a different way, your $200k may only return $150k. If you list "as is" the real estate machine will estimate the repairs at $100k. I think this message is rarely heard because a majority of the Realtors(tm) prefer a turn key property.
No. Im talking about multiple complexes here. Not just one. Ski resort areas in CO. Well kept buildings with well run HOAs. One of them had aluminum wiring in a few units out of like 50. Not sure what was going on with the other complexes. But it seems that insurance agencies are looking to drop these complexes for any reason they can find. Then the HOA has to rush to find a policy and the cheapest available at this point is far more expensive causing the described scenario.Quote:
Originally Posted by neufox47
What's the total property limit for the multiple complexes? It's not the agencies looking to drop them, it's the insurance companies. As a whole, multifamily habitational is a poor risk these days unless it's been built in the last 20 years.
Re: HOA/Dues/Insurance
So my 300ish unit HOA looks like that want to willing march full speed into a lawsuit. There are changing and selectively interpreting and changing the Design Review Documents and Covenants/Declarations to, at any cost, block an apartment building.
Good times. I have no idea if HOAs insurance would pay damages to the developer. Its just now much we'll be fucked. These overbearing Karens with their classist bullshit really think it's a great idea to special assess $5kish per owner to hire whatever dogshit law firm (a couple have told them they will lose already) to take their case.
I've lit them up so hard and they really are hiding so secret but they just don't care.
Does the HOA have directors and officers coverage? Do they understand their fiduciary responsibility to the HOA? Does the board understand that as a board member they can be personally sued for their actions/decisions? If they are without DO in place, they'll try to assess and then the owners will have to decide if they want to lawyer up. Fun times for all involved.
So do you tell 'em to fuck off and sell? Just wondering how you deal with intractable people running the show...Quote:
Originally Posted by Foggy_Goggles
The implications are just beginning:
“California’s insurance crisis is rattling the real estate market. It could impact ‘almost every sale’”
https://apple.news/A-6SePZG6SgSF9dE39fL4EQ
The Florida or Louisiana insurance markets could collapse with a significant storm this year. I still think the next housing crash could start with an insurance market collapse.Quote:
Originally Posted by 4matic
Feds are going to have to step in and take over.
That's my uneducated thought as well. Residential Housing is props up by the housing agencies, tax policy and so on. But I probably don't know shit.Quote:
Originally Posted by yeahman
Wouldn't it be nice if the insurance companies priced themselves right out of business?
But really it's no surprise homeowner insurance rates are skyrocketing because construction costs are skyrocketing. Rebuilding a home is going to take a lot more money now than a couple years ago. Two years ago I voluntarily raised my coverage by about 30% (this in addition to the inflation increase already built into most policies). I ate a $45 a month rate increase at that time. Not sure if this is why I haven't seen any rate increases since. Judging by Reddit people in Montana are seeing increases but nothing on the scale of what's going on in California.
Socialized insurance? We seem to be kinda heading that way...Quote:
Originally Posted by yeahman
wonder how much of this has to do with corporate greed and the deregulation of the insurance banking and securities industries back in the 90s
they have been using our premiums to gamble on the stock market
fuck them
Insurance is socialized as a construct. They aren't pricing themselves out of business, they're pricing risk. If you want to blow a massive hole in the fed budget, that's what getting involved would do (much as NFIP is a bit of a hole). Houses that were perfectly fine 10 years ago are actively at much higher risk given the changes in weather patterns and behavior patterns. It's a shit pill to swallow, but that's a lot of what's driving it. On top of that, the massive regulatory weight of 50 separate state schemas around insurance costs plenty as well.
Note also that pretty much every state (save for a few that go extra light on regulation *cough* texas *cough*) has very specific provisions that trigger well in advance of insolvency to remove an insurer from the state and make sure things get covered. Not to mention large reserve and reinsurance requirements.
You want things to improve? Make building cheaper and start mitigating climate risk more aggressively. Mandate and enforce barriers/firebreaks in wildfire country. Go after dishonest contractors/roofers/lawyers more aggressively. It's not like insurers get to set prices without input - states approve the rates.
Should we socialize insurance because people like nice homes with a view, ski town living, second homes and vacation properties, and investment real estate?
I thought we were supposed to be mad at the wealth gap…
Socialized insurance for beachfront property but not for people living on fault lines does sound unfair.
What about people who choose to live not on a fault line or beachfront?
Agree.Quote:
Originally Posted by neufox47