Converting to apts to condos, looking for advice - Posted by Chris in Alabama

Posted by ken in sc on October 28, 2004 at 11:57:03:

There is much discussion on this topic in the commercial forum. I would look there.

Ken

Converting to apts to condos, looking for advice - Posted by Chris in Alabama

Posted by Chris in Alabama on October 27, 2004 at 14:39:04:

I recently put an option on a fully rented, 16 unit apartment complex in a college town (walking or biking distance to campus). All units are 3 bed, 3 bath, about 5 years old. Bank financing 70% of purchase, raising money for down pmt ($400K). Monthly rent easily covers bank loans.

No modifiations required to convert to condos, as per city zoning dept. We are going to convert them and sell them back to college kid parents in the spring. Very hot condo market here right now, slow apartment rental market.

Has anyone here ever done a project like that? We need 6 presales also. I am working on all these things, sending out letters and making lots of phone calls. Offering investors a good return, (12-18%) but some prospects are hesitant to get in because they won’t be on a mortgage at all. Still, I would like some wisdom from someone who has already crossed that bridge and can look back from the other side. Primarily the point of giving them a secured interest in something that is not already split up… is it possible? If so, how is that accomplished if the bank will have a 1st mortgage on the property?

Any comments would be appreciated.