I speak to a lot of investors who want to enter the condo investment arena. They see the prices and rent equation and think "this is a no brainer." On the surface it makes perfect sense. Buy a condo in Las Vegas with 2 bedrooms, pay $50,000. Put down 20% ($10,000) and have a note for $40,000. The payment on $40,000 is approximately $280/month including taxes and insurance. The HOA is no more than $200/month and your management fee of 10% of rents of $800 is $80/month. Total monthly cashflow using a scenerio like this and not setting aside any reserves for repairs or vacancy is $240/month.

The difficulty unfortunately isn't with the scenerio, it's with the reality of this market and how difficult it is to obtain financing on any condos in our city. Not to mention the competition is so fierce you'll most likely get beaten out by a cash offer anyways. Here's what you need to know about condos in this market.

Conventional loan: No more than 15% of the owners can be delinquent in their HOA Dues and the owner occupancy percentage must be over 60%. No pending litigation and the lender must still approve the complex.


FHA and VA loans: Must be on the FHA approved Condo list (see FHA link below) AND the requirements listed on the approval page must be met. No pending litigation.

Canadians purchasing a condo in Las Vegas: No more than 5% of the owners can be delinquent in their HOA Dues and the owner occupancy percentage must be over 70%. No pending litigation.

IMPORTANT LINKS


FHA http://portal.hud.gov/portal/page?_pageid=73,1&_dad=portal&_schema=PORTAL

FHA Mortgage Limits https://entp.hud.gov/idapp/html/hicostlook.cfm

FHA Approved Condo Look-Up https://entp.hud.gov/idapp/html/condlook.cfm?CFID=1318400&CFTOKEN=9c57314bac1b7ef7-DD1133B5-B1F5-2C90-75FF9D8F2543C965

First-Time Homebuyer Tax Credit http://www.federalhousingtaxcredit.com/2009/index.html

100 Questions and Answers about buying a new home http://www.hud.gov/offices/hsg/sfh/buying/buyhm.cfm

½ Off Homes for teachers, firefighters, EMT's and Cops http://www.hud.gov/offices/hsg/sfh/reo/goodn/gnndabot.cfm

Do I have a Fannie Mae loan? http://loanlookup.fanniemae.com/loanlookup/

Do I have a Freddie Mac loan? https://ww3.freddiemac.com/corporate/

I hope this helps clarify your investment questions.