Updated over 7 years ago on . Most recent reply
Question about Condo Conversion
Thanks in advance for taking the time to look at my question!
Last year a partner an I bought a 4 unit property in MN. We got a local bank to finance it with 30% down and a 20-year note. My partner is the "money guy" and I am the "sweat equity" guy. The property is 3 residential units and 1 commercial units- hence the commercial loan terms. With that said our deal was: we would buy the property increase value (we have been able to increase rents and the commercial space wasn't rented at the time, we are about to rent that out) and then refinance, the thought was we could get the initial cash out after increasing the value of the property and repeat (sound familiar) - after which we would be 50/50 partners on the property.
To my question - since this is a commercial property, would it make sense and is there value in converting this to a condo, where we could get more favorable terms on the residential units (30-year mortgages and 20% DP) versus the terms we have right now?