"Clever" Real Estate Scam to Watch out for

[puporing]

So.. I have been involved in cracking down on theft in one of the condo style Airbnb's I run and have learned some things along the way. This is what could happen if your apartment is seized by a corrupt President sitting on the Board of Directors (that is supposed to represent owners), apathetic and illiterate owners, and basically a criminal business disguised as a Condo Management Company.

Since most people do not want to read things like Budgets or sort out Balance sheets, understand Condo Laws and Owner Rights, nor have reference information on what their budgets should look like, there are clever companies out there who operate based on fudging numbers on the balance sheets, enabled by another corrupt President/person in power. Along with uninformed/absentee owners/landlords, this is the perfect recipe.

Since I happen to have had some experience with Condo Management companies, there were many red flags that had popped up for me since I purchased the unit in this one particular building. And as I dug more and more into it the more I found. It was sort of sheer luck that I also have another Airbnb of a very similar age and sized building that I could compare the Budget with.

By fudging numbers on balance sheets with things like power and gas cost going up, "vandalism", undocumented "losses", gaslighting them that these numbers are legitimate, and intimidating owners with "they own the place" or high interest rate on overdue charges; who are mostly immigrants in this case, these guys have been getting away with theft for about a decade.

The theft had come in many forms such as punitive unjustified charges on small incidents an owner may have, higher monthly condo fees than normal, Special Assessments without consultation and almost no work being done afterwards.

This is just my warning to you guys who may own or one day own a condo unit. This seems to be more possible with lower end condos that is made up of mostly less informed demographics and absentee landlords. Most older owners rather than trying to organize and chase out the bad management, have simply sold their unit for dirt cheap than what they would be worth on the market otherwise. 

Attachment: the case study.

2024-03-19_ComparisonofCandemavsMagnumYork.pdf

Edited March 20 by puporing