Condo Conversion to Apartment Complex

[Johnny Garcia]

I live in a condo association with a total of 70 units, a majority owned by investors who rent the units out with about 20% give or take being like myself that own and live here. The complex has a lot of deferred maintenance that our current HOA dues are not sufficient to handle the maintenance and owners have been adamant about not wanting to increase HOA due. At our last board meeting I brought up the option of selling to an equity fund that would buy out each owner and convert to a solely owned apartment complex and the question was well received.

I work in private equity space and have some potential buyers for this project, I'm looking for advise, counsel or an experienced investor to shed some knowledge in this process. If the desire is to be involved in this project, that's an option as well as it is very early on in this process.

If this is an area of expertise for someone on here, please reach out. I can message, hop on a call or meet in person to discuss. 

Thank you and I look forward to hearing the comments about this. 

 

[Sergey A. Petrov]

Those 80% that are rented (56 units) - are they owned by just one or two or three investors? Or are those 56 units owned by 50+ individual investors? If just one or two investor groups, get their buy in first. Or maybe they will be interested in a partnership to retain their ownership stake. If you have 70 individual owners, guarantee you, you’ll have at least half a dozen that will need A LOT of convincing to sell. And at least one who will decide to be a hold out and demand double the value for their unit.

Outside of the above your condo docs (and State Statutes) include a section titled something along the lines of “Termination of Condominium”.