Should I set up an HOA for an investment property I own? How do I do that?

Question

I own a tri-plex with some family members. One of the other families wants to sell their unit. We're concerned that it will be sold to someone outside the family and we'll have troubles dealing with them on things like maintenance and use of the property. We're thinking we need to set up an HOA to protect ourselves. Is an HOA the best course of action? If so, how do we go about doing that? Thanks.

Answer 1

Yes, you can do that.  Just see a licensed real estate attorney and they can set it up any way you want to.

Understand that what you may want to do is set up a Co-op arrangement instead of an HOA...this is very common in cities like New York City where they will "interview" someone before accepting them into the building, see their financial portfolio, etc.  HOA will not give you the same rights.

This will also give you the first option of purchasing the unit to sell it to who you want.

Answer 2

You would have to first convert the single property (triplex) to multiple properties (condominiums).  Right now you have joint ownership of a single property.