Condo conversion on multi-family that is joint mortgage financed?

[Peedy R.]

Hello!

This is a follow up to the thread I posted here: https://www.biggerpockets.com/forums/311/topics/59...

It appears that multiple buyers can get a joint residential mortgage together, so that is solved.

My question now is around condo conversions. From what I've read, after a condo conversion the parties on the deed will now each own X% of each unit rather than each own a unit themselves.

How can the units be individually owned, and what happens to the mortgage? Can the individual parties re-fi and get their own loans for their new individual unit?

This is in Southern California, Los Angeles County.

Your sage advice is greatly appreciated!

[Janet Voss]

I actually did a condo conversion in San Francisco. We bought a two unit building as a TIC (tenancy in common), and had a shared mortgage. We had some work to do on the building before we filed for condo conversion, and that took a couple of years to finish (as we had the money), so we stayed a TIC while that happened. Once we had finished all of the remediation, we filed for the condo conversion and had the building inspection. After we had changed the building to condos, we each refinanced out of the shared mortgage into individual mortgages. We had legal agreements both as a TIC, and later, as a condo association (with association dues).