Converting a corporating housing building to apartment?

[Jimmy Klein]

Ok so here is the deal. We are potentially looking at purchasing a corporate housing project that has 40 units. The project was built in 2010 and is pretty much classified as Class A (stainless steel appliances, wood floors, granite countertops, etc.). Anyways the corporate housing project is going at a cap rate of 11%. Current occupancy is about 90%. Given that this is corporate housing, the cap rates seem to be higher. Anyways based on the rent roll, the leases are short-term, 1 - 3 months, but most are month to month. Our goal is to convert each unit as it vacates. Then once we can lease this up with long-term tenants, we will look to sell for a 6.5% cap or so. We are seeking advise on what needs to be completed to achieve a full conversion.

Given that utilities are included for the tenants, we know we would need to switch this to metering for the units? Is this installation difficult to achieve?

We will also need to move out all of the existing FF&E for all units.

These are the only two items I can really think of. Otherwise, a conversion doesn't seem that difficult. I wanted to ask the community on what else we need to do. Thanks for the help.