Has anyone done a condo conversion?

Question

Has anyone ever done a condo conversion project? Where you'd take an older apartment building convert to condos and sell them off? If so can you elaborate on the process, what to expect and is it worth doing? I'm considering doing one building here. Maybe try to sell them off to investors in blocks of 3, 5 or 10 or just even to the general public.

Richard B · Answer

From a lenders prospective. You need to have want is commonly called “skin in the game” which means a combination of cash, equity, out-picket expenses already spent on the project, joint venture partner, cross collateral-able property etc typically equaling 20% of the loan size lent. You must buy right, like livitup said above. Plus the lender MUST feel absolutely comfortable that you will complete the project on time and pay them back.

I’ve been in the loan biz a long time and I never met a lender who wants to loan to own. The guideline above will insure the borrower is motivated, experienced. If the whole project goes to hell the lender will typically want to wholesale the property within 30 to 90 day to get their money out.

Peter Vekselman · Answer

i did one about 1.5 years ago.  the key to to these conversions it two fold.  yo must have the correct contruction company doing the conversion so that it is marketable at the end.  and you must understand the market you are in.  are these conversions selling and what the price point they are selling at.

N/A N/A · Answer

i almost went through with one in Tampa, but backed out when i saw condo market was glutted--you MUST make sure price you pay is RIGHT--THAT is where you will make your profit--
where is it?
how many units?
did you do construction costs for buildout?
lawyers fees?
permits required?
line up financing?
in the end, the most important thing is buy- in price, and LOCATION--are they saleable after conversion
good luck!