I had the chance listen to a podcast with Linda Baumgarten, a well-known real estate investor and coach. Linda has helped thousands of new real estate investors. One thing she loves to teach about is condo investing. Condos can be a great way to make money in real estate, even if you’re new. Linda shared her best tips, and now I want to share them with you.
Why Invest in Condos?
Condos are great for people who want to invest in real estate but don’t have much experience. Linda shared that condos are often easier and cheaper to buy than single-family homes. Her first deal was a condo she bought for just $29,000. She didn’t have to do much work—just new carpet and paint. That condo made her money every month. Then, after 18 months, she sold it and made a $36,000 profit.
What Makes Condos a Good Investment?
- Low Maintenance:
When you own a condo, the homeowners association (HOA) takes care of big things like the roof, the lawn, and snow removal. This means you don’t have to worry about big repairs. - Affordable Entry:
Condos are often cheaper than single-family homes. Even in busy areas, you can find condos for less. Linda said that in some cities, you can find condos for as low as $200,000, which is much less than most houses. - Easy to Rent:
Many renters like condos, especially ones with good community features like pools or parks. If you buy a condo, you might find it easy to rent out, and good tenants like the home-like feel. - Strong Demand:
Many groups of people love living in condos. Baby boomers who are downsizing, millennials who want something affordable, and retirees who want less work all like condos. This means there’s strong demand to buy or rent them.
Case Study: First-Time Success
One of Linda’s students was working full-time and wanted to invest. She used her IRA to buy her first condo. The unit just needed new carpet and paint, and she was able to rent it for $1,025 per month. She loved how easy it was to manage, so she bought more condos in the same community. Now, she owns four condos and is on her way to financial freedom.
Do Your Research
Before buying a condo, Linda says it’s important to do research. You don’t just need to check out the unit—you also need to learn about the condo community and the HOA. Here are some things to check:
- HOA Fees and Management:
Find out how much the fees are and what they cover. Also, make sure the HOA is well-managed. This can make a big difference in how easy it is to rent or sell the unit. - Owner-Occupancy Rate:
A good condo community should have at least 50% of the units owned by people who live there. This helps keep the community stable and makes it easier to finance. - Rental and Pet Rules:
Some condo communities have strict rules about renting and pets. Make sure you know the rules before you buy.
Case Study: Wholesaling a Condo
One of Linda’s students used wholesaling to make a quick profit. She found a condo for $45,000 and got it under contract. Then, she found a cash buyer and sold it for $55,000. After paying the Realtor, she kept $7,000. Wholesaling condos is a great way to start investing without needing a lot of money.
Exit Strategies
Linda says it’s important to have more than one exit strategy. Whether you want to rent it out, flip it, or wholesale it, condos give you options. For example, Linda bought a three-bedroom condo using seller financing. She rented it out for $1,250 a month, which was more than she expected, and made great cash flow from the start.
Case Study: Flipping for Profit
Another one of Linda’s students bought a small condo and made some quick updates. She replaced the carpet, painted the walls, and sold it within six weeks. She made $10,000 in profit in just over a month. Because condos usually need less work, they’re perfect for fast flips.
Financing Options
Financing condos can be easier than you think. Since 2019, FHA loans are now available even if the whole condo complex isn’t FHA-approved. You can also use seller financing, private money, or hard money loans.
Case Study: Creative Financing
Linda told me about one student who used creative financing to buy three condos. The owner hadn’t paid taxes or HOA fees for years. Linda’s student was able to work out a payment plan with both the HOA and the city. It took a few years, but now she owns the condos and they bring in cash every month. She didn’t need a lot of money upfront, just patience and negotiation.
Keep Learning And Find Your Niche
Condos are a great option if you want to invest in real estate without dealing with a lot of maintenance or big repairs. They’re affordable, in demand, and easy to manage. By doing your research, using creative financing, and having a solid exit strategy, condos can be a smart investment that brings in cash flow for years.
If you’re ready to learn more about condo investing, Linda Baumgarten is teaching a master class at MAREI on October 26th. This is a great chance to learn from an expert and get started on your condo investment journey!
