apartment conversion to condos

Hi all-
I am a novice at this, but figured I need to start somewhere, although this may be over my head, it may not be, and even if so, it’s good to know.

So with that disclaimer, I have found an apartment building for sale, 8 units, great location, good shape, and the price seems reasonable, given the area, but the #'s as an income producing property aren’t adding up. I have requested the full offering package so I can see what’s going on with it. The building, on this piece of property should at least be going for what they’re asking, but for some reason the cap rate is insanely low, the net is too high given the gross, and the numbers are just out of whack.

What I was hoping someone could shed some light on is this(and it’s a doozy) what is involved in turning these apartments into condos and selling them off? Not looking for a super-detailed answer, obviously, but where would I even start and what metrics would I use to run #'s and see if this is feasable? What would be involved with zoning/deeds/taxes/engineering etc…?

Anyone know?

Actually your 1st stop is to your local zoning department. You need to find out if you can even convert them to condos and if you can what steps are involved.

Once you have those steps, then you can start adding up the costs involved.

It might be worth it to partner up with someone who has converted condos before.

Patti Porter

Good answer Patti.