Posted by Dave on April 29, 2007 at 18:51:17:
Great advice, Jason. Sounds like you know this business. Thanks a lot!
Pricing Converted Condo Units - Posted by Dave
Posted by Dave on April 27, 2007 at 11:33:05:
I’m looking at converting a 6-story apartment building situated between a residential neighborhood and a large office campus into 2/1 condo units. Does anyone know of a rule-of-thumb for guestimating the retail price of converted condo units based on surrounding 2/1 homes or current rental rates for the units or any other means? Thanks for any advice.
Re: Pricing Converted Condo Units - Posted by Monica Villasenor
Posted by Monica Villasenor on May 30, 2007 at 02:29:29:
Jason’s advice was good. You will need to pull comps of other condominiums in the area and then price slightly lower so they move. Financing and carrying costs are expensive. Just out of curiousity-which state is the property located in? Also, one major obstacle I had to overcome with finding a lender, in this real estate environment was this comment “She has no condo converison experience.” even when all entitlements were done, budget/reserve study was done, CC & R’s were drafted, and the building permits were applied for (and as of a couple of weeks ago approved). They just didn’t get it that everything was done. So, if you proceed, please tell the lender you have experience with condo conversions-use my project name if you have to-because it will come up.
Re: Pricing Converted Condo Units - Posted by jason SC
Posted by jason SC on April 29, 2007 at 17:25:23:
price depends on the area and what your goals are. I would look to see what is selling locally that is compairable. You want to pick a target and release units in phases. Generally we target the first phase or phases towards investors who would be holding them as rentals. We normally discount the first units because - nobody wants to be the first buyer in these projects. Then as sales go on you raise prices to whatever the market price is. Useually when you hit the market price you will have 30% or so of you units left to retail and little or no debt left.
I would also start looking for a lender/bank to finance the end units - This will make the whole thing go so much smoother.
If you find the right bank you can be very creative. We have offered intrest paid for a year - 100% financing plus closing costs - HOA paid - We have guaranteed rent for a year. The options are endless if you bought right and are open minded
jason sc