Condo Conversion Opportunity

[Chris Gottshall]

I am entertaining a possible condo conversion opportunity and I'm curious if anyone out there has experience they could offer as to what to watch out for. I've never done one.

History: Two sister 4-plex buildings (distinct parcels) share a common driveway, parking lot, and trash facility. One person owned both of them in the early 2000s. In 2004-2006, the owner decided to convert all 8 units to condos and intended to put them all in the same HOA. In 2006, he finished the 4 units in the first building and sold them off, forming an HOA. Due to the economic challenges with the former owner, the second building was sold off separately as multifamily housing. I own one of the units in the converted building and the sister building is now coming on the market again. I'm interested in buying it to finish the job of having an 8-unit HOA. Our existing HOA is amenable to this idea.

There are a few factors I know I need to consider:
1. Financing: I am looking at FHA to buy as owner-occupied multi-family to make the initial transaction easier and then figuring out how to navigate the conversion later. The building will be vacant soon, so I won't need to worry about relocating tenants.
2. What are the costs involved with a conversion? While I'd like to believe it can be as simple as filing some paperwork to change the building from 1 parcel to 4 parcels for tax records, I'm guessing there's more to it than that.
3. Renovate and then convert or convert and then renovate? I'm inclined to convert it as is, make them separate residences legally, and then tackle converting them one at a time, keeping at least 2 units tenant-occupied throughout the process. Once a unit is converted, I can sell it off separately or keep it as a rental depending on the market.

What else am I missing in my evaluation of the opportunity?

If anyone has a connection to someone who has done this type of project before, I'd love to connect. Thanks in advance for your input.