Converting a multi-family rental to condos with a mortgage

[Christopher Hikel]

Hi all,

I am brand new to the game; so thank you in advance for your advice and support in getting me started. To cut to the chase, I am currently under contract to purchase a 4-unit multi-family rental building, in which I currently live in one of the units. I still have an out in the contract, should I decide to use it. My desire and intention is to convert the building to condos two years from now and sell them. This is a very hot condo market, and I expect that I could make a nice return without putting much more work into the units.

Here is the kicker: I would be financing the purchase of the building with an FHA mortgage, because I do not have the 20% down required for a commercial loan. However, I am not up to speed on whether I can convert to condos while I have an FHA loan. I am also unsure of what it takes to refinance to a commercial loan down the road, if that is what I would have to do.

So, can anybody tell me: 1) is it possible to convert to condos with an FHA mortgage? 2) If it is not, how difficult is it to refinance a building to a commercial loan that would allow me to do this?

I am trying to avoid getting into a bad situation, so any timely advice would be greatly appreciated. I have 5 days to use my out in the contract.

Thanks,

Chris