I need help with first RE deal

I need help with first RE deal

Melrose, MA · Member since 2016 · 25 posts · 4 votes
My wife and I have been approached by her parents about purchasing the house that she grew up in and that we live in currently. The property itself has an older two family building on the lot and then a newer duplex attached by a breezeway (the city would not let them split the lot into two separate properties and any new structure had to be built attached to the old building). Three of the units are rented to tenants, one unit is where my wife's sister lives, and my wife and I live in an unrecognized basement unit which is technically unrentable because it does not have a second egress point. My wife's parents ultimately want to split all of the units into condos so that they can keep one for my wife's sister and sell us the older building with a chance to buy the third unit in the future. His one sticking point is always having one unit for my wife's sister to live in. Is there a way to avoid splitting the property into condos while putting in the sale agreement that the sister will always be able to live in her one unit? Also her parents are interested in owner financing the deal, but they still owe $170,000. Would we be able to take out a loan to pay off what they owe, and then they finance the remaining balance. Can anyone provide any insight to how we could structure the financing through her parents/the owners? Any help would be greatly appreciated. Dave
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  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    8y

    @David Bellmont - You would need to figure out the local zoning to see if you an even split it into condos.  In my area it is not very easy because most of the mechanicals are in the basement and to be condos the electrical panel, HWH, and furnace must all be in unit - so you basically have to gut the property and re run all the electrical, plumbing, gas lines.  

  • Melrose, MA · Member since 2016 · 25 posts · 4 votes
    8y
    @Brie Schmidt thanks, that's definitely something to look into. I know that in the older building the mechanical room for all units is in the basement.
  • Melrose, MA · Member since 2016 · 25 posts · 4 votes
    8y
    @Brie Schmidt I found the following under the Massachusetts general laws defining condos: ''Common areas and facilities'' shall, except as otherwise provided or stipulated in the master deed, mean and include:— (1) The foundations, columns, girders, beams, supports, party walls, common walls, main walls, roofs, halls, corridors, lobbies, public stairs and stairways, fire escapes and entrances and exits of the building; (2) Installations of central services such as power, light, gas, hot and cold water, heating, refrigeration, air conditioning and incinerating; (3) The elevators, tanks, pumps, motors, fans, compressors, ducts, and in general all apparatus and installations existing for common use;
  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    8y

    @David Bellmont - are you active in your local REIA's? That would be the place to start and ask around for someone who does this kind of thing.

  • Melrose, MA · Member since 2016 · 25 posts · 4 votes
    8y
    @brieschmidt Finding a local REIA is one of my next goals as we get closer to making our first purchase. There is so much to learn and consider and your advice was really helpful, thank you. Unfortunately it looks as if we will be passing on the deal for now. My father in law seems convinced on splitting the property into condos if he is to sell. This was a great learning experience and we will keep looking for our first deal. I'm sure i will have many questions in the future. Again thanks for you help.
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