The Struggle of Selling a Package of Condos (Part 2)

If you’ve ever wondered what it really looks like to sell a cluster of condos in the Upstate, this episode pulls back the curtain. The host walked through months of hard knocks, near-wins, and a crash course in condo financing that could double as a masterclass. What started as one big package turned into several smaller ones, and along the way came ghosted contracts, underwriters with ironclad checklists, and a tidal wave of buyer inquiries that felt like a second full-time job.

Struggle of Selling a Package of Condos

This is the thread that ties the whole story together. The struggle of selling a package of condos wasn’t just about price; it was about product, paperwork, portfolio loans, and people—on repeat.

From one big bow to four moving parts

The initial listing was a 15-unit package inside a roughly 100-unit condo community. The units weren’t contiguous. There were four different sellers, including the host (who owned four outright and three with partners). Because of those ties, he also had a direct line to the board, the property manager, and other owners. That network made it possible to assemble a single offering—seven units he owned (alone or with partners) plus eight more from other owners—into one public launch.

Interest exploded. Phone and email lit up. A cash buyer stepped up first…and then ghosted at the finish line, forfeiting earnest money. Round two looked better: an out-of-state buyer (an attorney with strong banking relationships) from California. On paper, it seemed bulletproof—until financing unraveled.

That second failure forced a rethink. Keeping all 15 together clearly limited the buyer pool to a razor-thin slice willing and able to close under tricky lending conditions. The pivot: break the whole into parts. Ultimately, the offering morphed into four separate packages—4, 4, 3, and 6 units. Two units originally planned to be included dropped off for capital gains timing; another owner with four units joined later, bringing the total marketed to 17. The phones got even busier.

Why financing condos can be a labyrinth

Here’s where the struggle of selling a package of condos really tightened the screws: lending guidelines. When the host purchased his own units earlier, local portfolio lenders stepped up with practical solutions. But buyers trying to use big-box conventional loans hit a brick wall for several reasons tied to warrantability and risk.

Two big warrantability hurdles:

1. No reserve budget. Conventional (Fannie/Freddie) products want to see at least 10% of the HOA budget dedicated to reserves. This community had zero at the time. There was history here—an old management company had embezzled funds, a new company stabilized cash flow, owners got current, and the community returned to the black. Still, without a formal reserve line, underwriters balked.

2. Owner-occupancy ratio. A large share of the community was non-owner-occupied. The site was overwhelmingly rentals (roughly 5% owner-occupied), far off the typical Fannie/Freddie posture.

Even when lenders weren’t rigid about those two, other red flags popped up:

• Concentration risk: One owner held roughly 35% of all units. Portfolio lenders viewed that as governance/control risk (even though day-to-day control effectively ran through a property manager handling about 80% of the complex).

• Out-of-state guarantors: Local banks would lend to South Carolina borrowers, but not to an out-of-state guarantor using a South Carolina LLC when the bank had no presence in the guarantor’s home state. If something went wrong, chasing a default across state lines would be slow, costly, and impractical.

The take-home: yes, local portfolio banks could do these for local borrowers. Many out-of-state buyers and their big-brand lenders simply couldn’t thread the needle.

Vetting offers like a bouncer on Friday night

After the split, demand mushroomed. It wasn’t unusual for the host to spend 25–30 hours per week answering questions, debriefing loan officers, and walking outside agents through the realities of this community. A full-price offer didn’t automatically pass Go. If the buyer’s financing playbook was “four conventional loans” or a major national lender with no path for non-warrantable condos, the answer was: decline.

This wasn’t stubbornness. The sellers weren’t especially motivated; meanwhile, tenants were being disrupted by inspectors and appraisers, and failed contracts meant more visits and more friction. The mandate became: only accept offers that can actually close.

A few patterns emerged:

• Pre-diligence before due diligence. It often took one to two weeks of back-and-forth just to determine whether a buyer could submit an offer that had a realistic shot.

• Not all urgency is real. Some buyers wanted to “bundle conventional loans.” Not possible here: these were individually deeded condos, not a fourplex.

• Multiple offers—later. With condos like these, multiple offers didn’t arrive on day three. They often hit after weeks, once everyone had time to vet lenders and sharpen pencils.

Along the way came a few teachable (and occasionally testy) moments—like the non-local agent firing off long lists of hyper-detailed questions (right down to the condition of a back fence no one used). There were also agents who candidly admitted, “I don’t know multifamily—teach me.” The latter conversations were far more productive.

Progress, closings, and the moving goal line

The approach worked. First four units went under contract, then the six. In the following weeks:

• 10 units closed.

• 3 more (the remaining co-owned set) were scheduled to close on December 2.

• The final 4 were slated for early January—though an appraiser on that file inspired…little confidence.

It was a slog. But that’s the point of this story: the struggle of selling a package of condos is equal parts strategy and stamina.

What the transaction taught (and reinforced)

• Exit strategy matters—even when you think you’ll never sell. The condos were terrific cash cows, but selling them required threading needles. That’s now part of the calculus for any future acquisition.

• Portfolio lending is about people and place. Local banks with local borrowers can get creative. National overlays rarely bend.

• Multifamily inventory is scarce. When supply is thin and rent is steady, you can wait for the right buyer rather than chase the wrong one.

• Not all “motivated” is equal. In this case, none of the sellers needed to sell. Declining near-full-price offers (e.g., $290K on a $300K list) made sense because time wasn’t the enemy—weak financing was.

• Education saves time. The fastest path to closing was setting expectations with agents and lenders before a contract ever touched the table.

Results on the investing side

While the market hard-mode was real, the investments themselves performed:

• One 4-unit package—bought for $158,000, sold for $340,000 (with repairs/renovations along the way and rental income throughout).

• One 3-unit package—bought for $98,000, selling for $230,000 (target close: December 2).

Cash flow during ownership plus equity on the way out added up to strong outcomes—even if the sale process required grit (and countless phone calls).

The bigger picture of condo communities

Context matters. This community had rebuilt after a rough management chapter (including embezzlement under a prior firm), moved the owner's current, and stabilized operations under a new manager. Yet without a formal reserve line and with a low owner-occupancy mix, the property still didn’t tick the boxes conventional lenders wanted. Add one owner with ~35% of units and a heavy reliance on a single property manager for most day-to-day work, and you have enough “risk optics” to spook institutions—even if daily operations were humming.

That’s why the local-borrower + local-portfolio-lender pairing made the difference. It lets banks drive the property, meet the players, and hold the paper—a model that national underwriting can’t mimic with spreadsheets.

The human factor (and the time sink)

Beyond the money and math, this was a people marathon:

• Weeks of explaining non-warrantable vs. warrantable.

• Daily calls with loan officers and agents.

• Tenant frustrations with repeated access requests.

• Appraisers who needed more guidance than usual—and sometimes still missed the mark.

By the end, the “minimum wage per hour” joke about commission felt close to home. But the payoff—in lessons, closings, and redeployed capital—was worth it.

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Bottom Line

The struggle of selling a package of condos is rarely about finding interest—it’s about finding qualified interest. In this case, warrantability hurdles, reserve shortfalls, owner-occupancy ratios, single-owner concentrations, and out-of-state guarantor issues created a maze only certain buyers could navigate. Breaking the portfolio into smaller bites, vetting lenders first, and favoring local financing paths turned chaos into closings. The investments were performed, the sellers stayed in control, and the road—though bumpy—led where it needed to go.

Ien Araneta

Journal & Podcast Editor | Selling Greenville