A Word About Flipping Condos

My Realtor passed along some news to me regarding flipping condos. She said to be careful because sometimes it's hard for buyers to get loan funded. It seems some lenders will not loan to people buying properties where the majority of people are renters. Here in Arizona, if a property is being rented, it is supposed to be registered as such with the state. Of course, enforcement of this is lax and there are many properties that are not registered. In fact, just Thursday, there was a front page article in the Arizona Republic about this.

In my particular case, I did a search on-line and there were no units in the development I'm bidding in that were registered as rentals. Given the above paragraph, this doesn't mean there are no renters. I also attempted to contact the president, vice-president, and treasurer of the development's home owner's association to see if they could tell me anything. Only one of those three had a listed number and no one answered that when I called. I did find a property management company that used to handle the development, but they no longer do.

So, I think in my case, it should be ok. I imagine most lenders are big corporations and possibly even out of state. If they check for rentals at all, I think they would most likely check by using the assessor's on-line search like I did and wouldn't find anything. However, this is something to keep in mind for the future.