Purchasing part of an Apartment Building

[Rufus White]

Hey,

Just had a question, there is currently 2 lower units of a small 4 unit apartment building in my area for sale. They are the Bottom 2 units. Would you ever consider purchasing part of a unit, if another owner still owns the other two? It is not the seller.

My thoughts are this is a foot in the door to possibly owning a full small apartment building.

[Matt Devincenzo]

I'll throw my 0.02 in on this and say it could be a great deal!

There are several lesser known ownership structures that came about during the same time as condos and their associated HOAs became the go to. One is a co-op, which is more common in NY than elsewhere it seems, which is a purchase of the shares to a company that owns the building. Another is a Tenants in common (TIC) that is set up as a unit ownership structure...I've heard these exist more than elsewhere in the CA bay area.

Both of them are less common and seem to be a lower value asset due to their ownership structure and financing difficulties. But both could legally be converted into condos with HOAs, and realize an increased valuation by doing so. That would usually not be do-able due to the number of individual owners to get on board, but with only one other owner it would certainly by more viable to do it. 

Everything above might not fit your scenario, but it would definitely be worth looking into I think.