Condo Unit.. Sponsor owned problem?? - Posted by IZZY

Posted by Anne_ND on December 04, 2002 at 08:24:21:

Frank has made several excellent posts on this very subject.

Anne

Condo Unit… Sponsor owned problem?? - Posted by IZZY

Posted by IZZY on December 04, 2002 at 01:18:11:

I am trying to buy a condo in manhattan, and my mortgage broker told me that I have to find out how many are “sold” and how many are owner occupied.

I assume this means how many units are still owned by the sponsor and how many are used as rentals?

What is the most % not owner occupied the bank will accept?

Seems to me, according to the tax records I checked, a 25% or so sponsor owned, some others have out of state addresses.

Any help on this one? thanks!

Re: Condo Unit… Sponsor owned problem?? - Posted by Tim Fierro (Tacoma, WA)

Posted by Tim Fierro (Tacoma, WA) on December 04, 2002 at 09:57:30:

I can’t remember now, but I think that FHA wanted 70% or higher in owner occupant condos in order to do a loan. And further, I think ‘some’ conventional lenders would allow down to a 60% owner occupant level.

Your lender, mortgage broker, will know the number that is acceptable. You can check the number currently with the condo association manager.

Preferably, you would like to buy into a condo that has a high owner occupant rate such as 80% or higher. If you are going to use this as a rental, right when you buy, you will lower the occupancy rate of owner occupants and tip the scale towards the rental direction.

Another thing to consider when purchasing is that as the lower the owner occupancy rate becomes, the more discount you may want. This will allow you to take into account a later sell at a low occupancy rate so you can sell at a discount also.

One last thing is that you want to check the association rules. Some don’t allow rentals in their complex so your owner occupancy rate is 100%, but you would have to live there. While you are checking out the rules, find out if there are any upcoming renovations or heavy maintenance bills that will mean out of pocket for your portion.

Re: Condo Unit… Sponsor owned problem?? - Posted by Heather -Tx

Posted by Heather -Tx on December 04, 2002 at 08:34:54:

I know on some Condo properties at least, only a certain amount of them are allowed to be sold to “investors” Instead of owner occupants. Maybe this is what you are refering to ? They dont want it to turn into just another Higher priced Apartment property so they try to keep a large majority as owner/occupant.

Hope this helps, not sure if this is the case here… but sounds like it

Heather