Just A Thought?
If I bought a 4 or 5 unit complex which is rented out would it be possible later down the road to turn them into condos and sell each one?
It was just a thought and was wondering if anyone had any insight on the topic or knows how to make this possibility become reality.
Thank You,
Michael
You will have to find out the local regulations & process for condo conversion.
Go to the city department & see what is involved in the process & the cost.
Yep - definitely possible. Just make sure it is feasible.
Some states require you to give the tenants first right of refusal to buy the units and to give them up to 1 year to get out, once the conversion is complete.
Also like mentioned in the other posts, condo docs must be filed and Home Owners Association must be formed and filed with the Secretary of State. You will need an attorney for the Docs, and to work with the local municipality to split the deed and of course if there is any financing, you will need to make sure your lender will give you partial releases as the units are sold. Not too many lenders are crazy about doing this.
Definetly profitible, but in some cases may take 1-2 years to get going. Much easier to do with an empty or new building, go avoid the tenant issues.
Good Luck
Thanks for your response.
I will consider metering each property separately.
I have friends that own the two largest Mobile Home dealerships in a nearby city and they will handle all the sales.
I will give them a few spaces to set up models and use them to help sell into the park.
Thanks
Dave
Well David, the numbers for your situation look good. If you can get $450/mo, which seems reasonable for your location. Here in the Louisiana/Miss area, top rates are $125-$180. So I was basing my response on local tendacies here.
The other point on the board is a good point. You can make lots of side cash if you rehab mobile home or just keep a small fund to offer pennys on the dollar for them. They are relatively expensive to move, so people tend to stay years...not months.
Good luck
Thats the thing, No wet lands or anything. Again it was already surveyed into three buildable lots, after the reassment I will pull out the equity of 1.5 mil. Pay off my little loan and have 1.1 as profit. And the rent at 5000 a month. Sit back or go for it. Calculating my expenses of construction cost and other expenses for the new town homes will double. Just not sure of really how to get it done right with as little mistakes as possible.
Vinyl, My question is? Why would someone be $700k off on the market value of a property. It seems to me that even a crazy person would closer on the value of land. What about property tax? when you get it reapprasied to do the loan, the county may come after you for $$$. Closing costs would also be high. If you have legit answers for these few questions....My recommendation is close this deal quick, I wouldnt talk about it much again until the deed was in my hand...literally. Time will only cause things to go wrong...
Sorry as far as being 700 of on price. It is because when I go through the appraisal, it will be based on the lots and what I am going to do, along with the existing building fix up.
keep in mind as far as getting a loan on property you will need to own it for 1 yr to get credit for the appraised value VS the purchase price. During the
1 yr lenders will only want to loan on the purchase price.
Sounds like you have a winner.
Good Luck,
Robert
[addsig]
what type of properties? How sure are you of the rents? mortages? tax? insurance? repairs vacancies? etc. If you are taking his word for everything - you will get screwed!
Provide your analysis and we can give our inputs.[ Edited by hoober on Date 06/07/2006 ]
I was told apraisials were in progress and he would provide rental histories for the last five years. currently all properties are rented some are month to month others are long term. here is a breakdown of the properties and each of the rents. he
Break Down:
1.du-plex:
Income:1375 mo.
4 bed 2 bath./ 2 bed 1 ba.
2. tri-plex. 3X 2 bed 1 ba.
Income: $1800 mo.
3. 2 single family same parcel(side by side) 3 bed 2 ba. ea.
Income: $1600 per mo.
4. houses 1 parcel.
a. single family. 3 bed 1 ba. /basement single story.
b. bungalo 1 bed 1 ba.
c. Bungalo 2 bed 1 ba.
Income: 2,000 per mo.
5. Duplex:
2 bed 1 ba. / 1 bed 1 ba.
Income 1150. per mo.
6. Single Family: 2 bed 1 ba .
Income 1225.00 mo.
7. Duplex: 3 bed 1 ba. half basemant. / 3 bed. 1 ba. half basemant.
$1600 income.
$10,750 total.
As of right now thats the only info I have.
Also neglecting to calculate maintainance, repairs, management, vacancies, &etc.- rough ballpark 25%. And do you pay any utilities?
Chris