How to Convert Your multifamily Building into Condos
If you are trying to convert your multifamily building into condos, there are many things that you should keep in mind.
First ask yourself these questions: Is it financially worth it to do this? What is the fair market value as a two or three family house? What is the cumulative fair market value of the condominium units? In general, the cumulative fair market value of condominium units will be greater than the fair market value of the two or three family house. Consequently, you should either obtain the necessary fair market value opinions as a multifamily building versus condominium units from a local real estate broker. Any broker would be glad to provide you with a fair market value opinion with the hope that you would list your property to sell with that specific broker.
Secondly, you should check with a real estate attorney to make sure that the town or city in which your property is located does not have its own condominium conversion ordinances. If they do, this may require following a specific procedure in order to convert to condominiums.
You should weigh all your options and find out the best financial solution for your property before starting to take action. Our real estate attorneys have years of experience to help you make the right decisions moving forward.
First you will want to talk to a Cambridge condominium conversion attorney to see how much a condo would be worth in your neighborhood versus the multifamily building. This attorney would be able to refer you to the appropriate real estate broker who can provide you with a fair market value opinion on either the multiunit building or the condominiums if converted. If it turns out that your building, as a set of condos, will sell for substantially more than it would as a multifamily building, then it would make sense to convert the building into condos.
A local real estate broker can advise you on what kind of work would be advisable to have done on each of the individual condos, such as renovating the kitchen and bathrooms and other quality finishes that would be advisable to actually make these condos marketable. That real estate broker would also provide you with fair market value opinions on the units “as is”. Considering the work that you need to have done, in addition to realtor fees and home warranty fees for each of the condos, you want to make sure that you would still be turning a profit.
A real estate attorney will be able to help you with all the legal aspects of the conversion. They will create drafts of all necessary condo documentation and contracts. They will also put together deeds for each property. Each condo will need its own set of documentation.
There is a lot to keep in mind when you are considering a condominium conversion.
They will be able to apply their knowledge of the law to your situation, answer any questions that you might have, and guide you accordingly.