To many people who are new to South Florida (either as investors or second home owners), the concept of a Home Owner's Association (HOA) foreclosing on a property, before the bank even considers doing it for themselves, is a very weird concept. In many states, the HOA is not able to go above the bank in a foreclosure, which is why many attorneys in those states tell their clients to stop paying their HOA while they negotiate with the bank (they rightly assume that the bank will end up paying for your dues anyway). This dynamic is VERY different here in Florida, and it can be both a benefit for interested investors, who may not need to wait for a bank foreclosure to make lower offers to struggling owners (nor have to deal with the complication/strings of a judicial sale), and a headache for an owner who suddenly finds him/herself fighting the association for their properties.
If you are an owner who is underwater on your mortgage, but can pay the HOA, I highly reccomend that you continue to do so. Most properties, even the most expensive in Miami, are not above the cost of paying the mortgage, and you will probably be able to stay in your home for a long time before the bank decides to foreclose.
But, if you make the determination to not pay your HOA, for whatever reason, know that the association will more than likely take you all the way to the foreclosure sale if you don't pay. Every association is different, but the end result is the same.
What can you do? You can force the association to stall their own action against you if you can shortsale the property, since this option will cover most of the dues owed to them without complicating themselves too much. If you want to learn a few tricks that I know of how to achieve this effectively, please contact me and I can help you in the process. My fees as a Realtor are paid by both the buyer/bank, so you don't have to worry about digging into your own (already hurting) pocket.
A lot of people seem to think that because their properties are expensive (above $800,000) their chances of negotiating or selling are more difficult, but I can assure you that this is NOT the case if you deal with the right people.
**If you want help in getting yourself out of your HOA mess, stay in your property for free while we negotiate with the bank and sell your property, please call me and I will help you through the process: (305) 342 9742.
SHOULD I INVEST IN THESE PROPERTIES?
When it comes to those of you who wish to invest in great properties, you can benefit from homeowners that are facing the HOA in court (even better if they are in the earlier stages) and wish to sell before there is a judgement and/or sale date for their properties. I have personal knowledge of a couple of these very high end properties, some owned by corporations, that are ripe for investment. Not every building is great for this kind of purchase. If the building can't keep up with their expenses and are now in bankruptcy, you should always re-consider (or at least you should KNOW about it, so ask your agent).
Smart investing requires FOREKNOWLEDGE.
As a buyer, you may end up paying for some of the HOA dues, splitting fees with the bank, or covering other miscellaneous expenses (they are all contracted so don't worry), but these are clearly offset by the value of the investment. As such, these are part of your calculation. The good thing is that these deals are very flexible in how they come together, giving you a lot more flexibility in the process than most sales.
**If you are an investor and would like me to help you find GREAT investment opportunities in properties that are facing the problems mentioned above, call me and I will guide you through the process. Once you have the firm offer accepted, you will be able to sit and wait for the negotiations to end and acquire your property free and clear. Call: (305) 342 9742
You can also write me at: firstname.lastname@example.org