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How do I go about buying a condo that is on leased land???

by mpiotr115 from Brohman, Michigan. Nov 4th 2020 Reply

Bert Carpenter (BertCarpenter)
#1 ranked lender in Arizona - 2,336 contributions

My advice to everyone who buys a piece of property is to have an exit strategy. Eventually you will want to sell it and move, or if you die, your heirs will need to sell it. Not every lender will lend on a home that is on leased land. Leases have expiration dates, and if the owner of the land decides to jack up the rent for the land to an astronomical price, your only option is to pay-up or abandon the property. Lenders don't like those options, so many won't accept a residence on leased land. First step would be to ask your local mortgage lender if they will lend on this condo project that is on leased land. If you have difficulty finding a lender that will, then so will the buyers when you go to sell. That means you would likely have to pay cash and then wait to find a cash buyer when you are ready to sell. That could be a long wait and a significantly reduce sales price. An exception would be if the land is actually owned by the SAME Home Owner's Association that the condo is part of, Typically in a condo project, the HOA owns the land and the owner pays an assessment that covers the cost of maintaining the entire property. If that's not the case, then honestly, if it were me, I'd keep looking. I fear you are in for some heartache if you go down this path. ~ Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ At NEXA, we've got you covered. We are licensed in all states except VA and we're pending approval in MA and NY. ~ 480-889-9000.

Nov 4th 2020
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