I Own Half, But The Other Person Won't Sell
I have a 2 unit property that I want to convert into 2 condos. I have a contract to buy 1 of the 2 units.
There are currently 2 owners on title, the lady who is selling to me, and the other lady who owns the upstairs.
the lady who owns the upstairs refuses to convert the bldg into 2 condos (which would allow us to sell or keep or rent or whatever)
I am going to buy the one lady's interest. Once I do that, what can be done to force the other lady to sell....
You could file a partition law-suit, but offering a piece of the action usually goes a long ways.
I would be very interested in knowing why she doesn't want to convert to condos!!! Would be a good idea to find out why, may be some preconcieved notion that you could addess. Let us know !!!
Well a partition lawsuit is an option. As are a large number of partnership manoevers. I assuming that the woman doesn't want to sell because she wants to continue to live there. How old is she? Whats the cash flow look like if you just rent the first floor?
She doesn't want to convert to condos b/c she thinks it's too much "Trouble"
She doesn't want me to be the president of the condo association, nor does she want that responsibility.
I have to pay cash for the place, b/c I could never legally take out a mortgage against it since the title isn't clean. I have to pay 38k for my half, then put about 15k of rehab into, to be able to rent it for 1k per month.
So tell me about the lady who wants to sell. And what is the nature of the title encumbrance? What do you think that the condo units would sell for?
What is the NOI before debt after your $1,000/month rental. Do you have to pay utilities? How much are the taxes?
How about a deal like this, go to your seller and explain that because the other half won't co-operate you cannot pay all cash. You'll give her 30% down and the balance on a 15 year note. Do your rehab and rent or sell your half on a contract sale at a big markup. In one way the neighbor lady is right-- there is a certain amount of hassle for a two unit condo conversion. My guess is that if you structure the notes correctly you can make almost as much money without the hassle. Plus you can do almost exactly the same deal again when the lady upstairs changes her mind and decides she's ready to move.
I am confused so maybe it is just my problem.
Who owns the building now? Is the current ownership tenants in common or something similar? How are things that are common dealt with now (roof, exterior walls, etc)?
John
[addsig]
It's tenants in common.
As of now, they have a friendly agreement. However, since the lady won't convert to condos, the relationship is no longer "nice and friendly"
As for the hassle of converting to two condos point, she isn't being very smart, as the lady who is selling to me and myself are paying for ALL of the fees associated with the conversion. She's getting it for free.
Plus, I offered to pay for the 1st 3 years of the other lady's condo fees...still no dice.
OK, so assuming the expense numbers aren't too high (like half the income) then your cap rate here is fine. Rent the unit out-- pocket the $10,000 per year and wait the reluctant co-tenant out.
Still haven't heard about the title difficulties, that would concern me more.
cj,
No need to move her out. The condo conversion is a simple paper transaction-- file condo decs at the county recorders office.
The problem is that she refuses to sign the condo conversion docs..she thinks it's too much of a "hassle"
BTW, she doesn't even live there, she's renting her unit to her newphew.