Condo Conversion
Question from a newbie.
I am buying a building wherein the owner had finished the paper work for condo conversion, but has not begun to sell as condo. So I still have the option to keep as rentals if I would like.
Problem -
-what does a condo conversion actually mean to a prop? is it better or worst?
-It currently only has 1 deed to the place, so does that mean it has not been fully converted?
-I was told that condos are not subject to rent control rules, is this true?
-what does a condo conversion actually mean to a prop? is it better or worst?
The better part is that you get to sell the property for a tremendous profit, and still keep a monthly fee for condo fees and management of the building. The worse part is that you will have to manage it, depending on what you offer for your fees, is how bad it can get. Check the roof, plumbing and electric, as those will be your biggest expenses down the road. Personally I think there are more pros than cons owning a condo conversion.
-It currently only has 1 deed to the place, so does that mean it has not been fully converted?
If it were fully converted then you would be buying a condo association with units. You will need to set up a corporation either C or LLC to run it, if thats what you choose to do. Get a book, or hire a management firm, with you as the overseer.
-I was told that condos are not subject to rent control rules, is this true?
That depends on the area, as far as controls in place. Dont mix policy with law either, as administrator you would set the policy as to any controls, but you should have a list of the condo laws associated with your state, city, and county for reference. If the county or city has set up rent controls, it will be listed there. If the job is big enough it may behoove you to hire a consultant to set it all up, since its your first. They could save you enough to warrant there salary, or make you more than there salary.
Good Luck,
Kyle
What if you want to purchase a multi, do a conversion, set up a condo association then sell the units and be done with it. Is it difficult to set up a condo association to manage it? How do go about doing this? Just curious about an exit strategy once you have sold all the units...
Once you have sold all the units you do not have to be involved. The homeowners will need to form a non profit association to govern the property. They will elect a pres etc and can hire out the management of the duties or they can do it themselves. Stuff like paying water bills, getting yards cared for, trash removal etc need to be managed. There are property management companies that specialize in such.
Good LUCK and Thank You
Hope this helps some
Ted Jr