real estate

Vultures may taint condo deals

What to look for 
Wilkas suggests individual buyers who think they have found a steal of a deal should ditch the rose-colored glasses and take a clear-eyed look at what they're getting into.

"Before you do anything," she says, "take a look at the minutes of the board, budgets and everything else you can get your hands on, going back at least a year -- two years is better. That'll give you a picture of what's going on in that complex. How well-run is the budget? Are they in good financial standing? Do they have a lot of short sales? That's an indicator of problems.

"It really is caveat emptor. A buyer shouldn't attempt it without professional help. For example, if the association says we can't see any documentation until after we make an offer, we make contingencies all over the place so the client can walk if it doesn't look good. And by and large, a professional Realtor will know which are the well-run associations and management companies."

Advantages 
Not all the news is bad, observers say. Bulk buyers want to be able to resell their properties in a recovered market at premium prices, so in the long term there could be advantages for resident owners with patience.

"In the near term," Gordon says, "it's going to be a numbers game. What they'll be able to return on their investment will be the overriding factor. If you're a lifestyle buyer, this may not work out for you."

But bulk buyers often will also try to create value, so some will look for opportunities with "elements that end-users are going to seek out," he says, "such as pool facilities, a good amenities package, higher-end finishes and granite countertops."

Anyone who can imitate the big buyers by scraping together the wherewithal to buy a unit or two at today's prices could do very well, McCabe says. "It's the savvy investors who will make a lot of money in the next five to 10 years. If you can buy units in the $40,000-$50,000 range in an area that will see population migration once the recession ends, and if it's in a good neighborhood for end-users, the next few years may be the best opportunity to acquire real estate at bargain prices.

"But you have to be very careful."

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