Townhouse Rent To Townhouse SFH Conversion
Hello All:
I found a 75% owner financed 8 unit townhouse multifamily property. The terms of the financing aren't great, but enough for about 500 bucks of cashflow per month.
My real interest lies here:
The purchase price per unit is about $45,000.00. The units are in really good shape and are about 1000 sq ft.
I think you could buy the property, spend about 10K per unit and make them appealing to a homeowner.
In other words, I was thinking of putting a deal together to buy these, spend the 10K per unit, then sell them for about $80K a piece.
All said and done, this would be about a 200K profit deal.
Has anyone done this on this forum and what was involved? Would there be any planning and zoning issues since they are already townhomes, just rented instead of owned?
Thanks for your input.
Go talk to your local zoning & palnning for what's required
As I understand, in order to sell units individually, you need to convert them to condominiums first. That includes establishing Home Owner Association, etc.
I don't understand. Are the properties separately deeded at this point or is it one property with one deed consisting of 8 apartments?
Hi Nancy:
It is one property under one deed with 8 units.
I've been working on a deal like this. It can work well, especially since you've got a ready made market. If you can convice the people living there to buy by making an effective sales pitch by showing that the cost to buy is similar to the cost to rent and, with applicable tax deductions, can be less than renting, you should be able to sell some, maybe most, of the units to the existing lessees.
That is correct. Because it is one tax parcel, you won't be able to segragate it into 8 different ones (at least cost effectively). Look into converting the units into condos legally, no need for subdividing them, and if the profit margin is there, you can make some money.
I am currently financing a deal like that - 48 units converted from rentals to condos and sold off individually.
Quote:
On 2004-12-13 15:20, cl312 wrote:
As I understand, in order to sell units individually, you need to convert them to condominiums first. That includes establishing Home Owner Association, etc.