I am interested in any info or expertise that anyone would have on converting existing apts. into condos. I believe I am in a market where there are still good deals on older apt complexs but there are a lot of higher end condos going up around the area. I would like to take advantage of that without all the cost and experience needed with new constuction. I am interested in any info that you would have, especially on how to change the deed/zoning? of the property, any legal info involved, potential pitfalls, if it is financed with a bank how to transfer partial ownership of the property, ect… Thanks in advance for any info! Avi
Where are you located?
You find a local attorney that does condo conversions for your area and then you ask him how it’s done in your area. You can forget about zoning variances for parking, lot sizes, and building requirements. Most likely, you will have to bring the whole building up to current code.
What are these new condos. The new ones around me provide concierge service, security, on-site fitness center, a pool, in-unit laundry, and modern floor plans. Can you over something comparable? Condos that are just 4 walls and floor are the biggest dogs.
BLL is right, you need professional experienced advice on a project such as this. Converting old apts to condos is a big process and a major headache unless of course you like headaches. Imagine when you have done all the work, sold the majority of the units and then try to transfer the condo association to the new owners. They then hire an engineer and inspector to figure out all the things you screwed up and you have to fix all of this prior to the final transfer at which time your headache ceases.
Thanks for all of the advice. I am located in Omaha, NE. I will continue to look into this and take your advice and try to find some local peaple that are already doing this and an attorney that does these all the time. I have thought about this for a long time but am just now starting to look at the details. I have an attorney friend helping me as well. I agree that condos that are 4 walls and a floor are not that attractive, especially in a market where the urban luxury condos are going up everywhere. I was thinking about going into the opposite (low/moderate income) market though and finding an apt complex at about $15k-$20 a unit, spending $10k-$20 max per unit and selling them for $50k-75$ per unit. I would make them nice with new appliances, laminate floors/refinished wood floors, new stone tile counter tops and fresh paint and carpet. I can do most of that work myself in a couple of units. Any thoughts on the lower end condo conversion? It really is not being done around here at all. Thanks! Avi
Aside from a attorney, you’ll need an architect (or equivalent) to draw up the layout for both living space and common areas.
In some previously hot condo conversion markets like FL, most lenders have suspended lending on new projects—make sure you have your financing lined up before parting with any earnest money…
Condos tend to be the first property type to depreciate (and the steepest declines to boot) in a declining market—look and measure before you leap…
Using your worst case numbers you would be spending $40k and selling for $50k? Where’s the profit? By the time you get done with holding costs, attorney costs, closing costs, overages, etc you will be completely upside down on this project. I just don’t see you easily making money or getting this financed.