In today’s economy, it makes more sense to purchase a smaller property such as a condo unit, especially when it comes to first-time homeowners. If you happen to reside in a multi-family property, it’s time to think about converting it into a condo and turning a profit.
If it’s time to cash out of your multi family and you want to maximize your profit, you should definitely consider converting your units to condo’s. You could also pull out significant capital from your home and sell a portion of your home which will allow you to keep a unit for yourself and sell the space you don’t need. If you’re considering converting a multi-family property to a condo, here’s a brief guide on how to do it.
Be financially ready
The entire conversion process requires more capital than simply selling a single-family home. It also entails more legal assistance, documentation, and more fees. Since the units are being separated into separate ownership you will need architect plans to show exactly how the units will be divided and how common areas will be split or shared. When you develop a condo, you need money to make more money. Typical conversions require significant construction. Significant construction requires significant capital which is typically in the form of a construction loan. Use a lawyer who is familiar with the conversion process in your city or town. Some conversions can be pretty simple and some can be the exact opposite. It really depends on what parameters have been put in place wherever you live. The help of a realtor consultant, lawyer and architect team that has done this all before can be invaluable! Once you have a plan from the architect, you can now establish a budget for renovation. Budgets can vary quite a bit depending on how complicated the renovation is, what appliances you will use, how expensive your fixtures will be, what type of counters you choose, etc. There is almost no limitation to what can potentially cause a budget to skyrocket. This is where your realtor consultant can help you make informed choices. Once you have estimates and a budget can be established, now you can go to a local bank for a construction loan to get everything rolling!
Check zoning rules and state laws
Any multi family can be converted to condos as long as you keep the same number of units. If you try to add more units, that’s different and can involve zoning approval. Even though you own the property, it is still subject to the area’s zoning regulations. Some towns allow you to convert without permission, as long as you follow the building and zoning codes. Other town may have a condo review board, which is rare but possible. If your city has a condominium review board, you will need to submit your application with any documentation they require.. Once you get the approval from the condo review board (if required), you can proceed. Any major changes might have to be approved through the condo review board. The architect will submit finalized plans to the building department for a building permit and once you have your permit, you can finally start your conversion!
In summary, it makes it so much easier for you to go through the process, if you:
- Get a realtor consultant who is familiar with your market trends and has experience with local condos who can also direct you to your architect and builder team.
- Hire an architect who will check on the zoning and limitations of property additions
- Hire a lawyer for any zoning or board of appeals process that may be necessary.
Vacate the property
Turning your home into a condo doesn’t happen overnight. If your property is a rental, your tenants need to be notified ahead of time to give them enough time to relocate. The notice period varies from town to town or even state to state, but typically lasts from one to two years. For special groups such as the elderly, disabled, and low-income individuals, the notice period is longer and entitles them to relocation payment and assistance as applicable.
Divide and conquer!
Keep in mind when you split up your property, you are now creating self contained living areas for each homeowner with separate amenities for each. The Steve Bremis Realty Groups typically recommends the following amenities: luxury fully applianced kitchens, multiple baths (at least one with a tub), fireplaces (can be gas but electric is possible), in unit laundry’s and smart house technology (Nest, Ring, Alexa compatibility) As far as outside recommendations, Steve Bremis typically recommends exclusive designated outdoor yard space, typically a porch or patio (or both), bike racks and an outdoor charging station for electric cars, for example.
To ensure your plans are meticulous and the execution flawless, you’ll need the help of:
- Experienced realtor design consultants who know what buyers want. They’ll focus on design features that matter to the marketplace and forgo things that aren’t as important or valued to buyers in your local area. It’s important that your units are competitive but not ‘overbuilt’.
- An architect to review floor plans, unit amenities, functionality, and materials, including their price points.
- A real estate professional to create your projects identity, create a marketing campaign, stage your units, create a web site and market your units. Converting a multi to condos is a different animal and requires a different skill set from your agent. You’ll be spending a lot of money and mistakes can be costly, if not deadly! This is where experience and a diverse skill set counts in your agent!
Consult an expert
Converting a property into a condo takes a lot of time, work, planning,money, and expertise. Get an expert team to guide you through the process, from property acquisition and brainstorming floor plans, to conducting site visits and marketing.
Steve Bremis specializes in Condo Conversion Consulting and Condo Development Marketing. Steve is on the pulse of the market and can accurately advise you on your team, recommended amenities and an accurate market assessment of your units value and overall marketing strategy with over 40 years of experience. Our agents at Bremis and now the Steve Bremis Realty Group have decades of experience, having been in the business since 1955. We have amassed over $1 billion in total sales and have been honored with numerous customer service awards over the years. We pride ourselves in being the most knowledgeable real estate consultants and Realtors in Somerville, MA and beyond, and are committed to giving each client only the best services.
If you’re looking for advice on converting your multi-family to condos in Somerville, Medford, Cambridge, Arlington, or Boston, get in touch with Steve today at 617.828.1070 or send us an email.