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Prospecting for Gold: The Map to a Golden Condo Purchase

Condos can be a wonderful lifestyle choice. Atime. Be smart. Through careful research and
wise, well researched condo purchase may bedue diligence, you'll follow the yellow brick
a golden investment, but keep in mind someroad  to  a  successful  purchase.
very important considerations. Take note
that the purchase of a condo is veryHOW MUCH GOLD IS IN THE POT?: THE REPAIR FUND
different from the purchase of a single
family home. In the case of a condoKnow what is in reserve. The general rule: If
purchase, those neighbors whom you hope willthe complex is 1-10 years old, the repair
be the kind to help you out in a pinch willfund should cover 10% of the cost of
also be your co-investors. As in any businessreplaceable items. At 10-20 years old, the
relationship, stepping into one should befund should offer 25-30% coverage. With a
done  with  savvy  and  careful  research.complex 20 years or older, the fund should
cover  at  least  50%  of  repair  costs.
Here are some golden rules for a perfect
condo  purchase:IS  THE  RENTER  POPULATION  OVER  10%?
READ  THE  BIBLE!If so, make sure there are clear rental
policies. In some cases the condo management
The "condo bible," in this case. "What is thecompany will also manage the renters. If this
condo bible?" you ask. It is the minutes ofis the case, find out more about their
the condo association; they'll be yourscreening process. Ask to see their rental
strongest guide to a smart purchase. Previewlease and have your lawyer look it over. Talk
these minutes and it will be well worth yourto other tenants and get the low down.
time. Here you will find evidence as to anyAgain, there may be rental information and
possible management difficulties. Ongoinghistory in the association's minutes. If you
gripes and complaints may indicate managementare digging for gold and don't want toPr end
problems and a lack of cohesive visionup with a lump of coal, heed the sages'
amongst the association. Other things may beadvice;  leave  no  stone  unturned.
highlighted in the minutes, such as projects
that are underway or proposed. Find out theELIMINATE THE ENEMY: HAS THE CONDO
delinquency rates of current owners. ThisASSOCIATION  HAD  ANY  LEGAL ISSUES?
could be an indication that the association
is underfunded. These are all details that aContact a real estate lawyer and go over the
seller may not have mentioned but which arebylaws of the association. Are the
paramount in the consideration of your condoassociation's bylaws consistent with the laws
purchase.of the state you're purchasing in? Never
underestimate discrepancies that might cost a
DOES THE ASSOCIATION'S INSURANCE COVER YOU,fortune  if  left  unchallenged.
AND  TO  WHAT EXTENT?
Look into these essential details and you
Get your hands on a copy of the certificatewill be able to make a condo purchase with
of insurance, which is a summary of theease and confidence. Remember, the
condo association's policy. The replacementfoundation of a wise purchase is not only in
costs within the policy should match thethe building itself, but in all those niggly
estimated costs of rebuilding. Also thelegal details. Happy digging, and may you
certificate should contain astrike gold and find the dream condo you've
building-ordinance clause. This clausebeen  looking  for!
indicates that the insurance will cover the
cost of bringing the building up to code ifFor more information on Minneapolis lofts and
there is any rebuilding to be done.or condos in The Mill District, contact Andy
Understand exactly what the associationAsbury of The Asbury Group. Andy's a
policy covers. Again, all this research willMinneapolis REALTOR® specializing in loft
clarify the future potential for aand condo transactions.
not-so-great, or great investment. Take the



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