Separating utilities in condo conversion?

5 Replies

Hello BP community,

I'm a newbie to the forum and getting back into multi-family investing after a long hiatus. The condo conversion concept is intriguing and not difficult to do here in Texas from a legal perspective. 

However, does anyone have input on approximate expenses or level of complexity involved in separating utilities for electric, gas, water and sewer? I've seen apartment buildings that were "all bills paid" that could be ideal condos, but I'd like to break apart the utilities so each unit can pay for their own expenses directly.

Thank you,

Kathryn

I'm interested in this as well. Have you done any condo conversions before? Did you underwrite the deal differently with that exit strategy in mind?

Originally posted by @Kathryn Stevens :

Hello BP community,

I'm a newbie to the forum and getting back into multi-family investing after a long hiatus. The condo conversion concept is intriguing and not difficult to do here in Texas from a legal perspective. 

However, does anyone have input on approximate expenses or level of complexity involved in separating utilities for electric, gas, water and sewer? I've seen apartment buildings that were "all bills paid" that could be ideal condos, but I'd like to break apart the utilities so each unit can pay for their own expenses directly.

Thank you,

Kathryn

 I think the answer is going to heavily depend on how the utilities were initially wired/plumbed etc.  I suspect there will be buildings where each unit is run separately to a meter/meterbox, and in those cases you will likely be able to do it relatively inexpensively.  There will also be situations where the community electric and units are wired together, and in those cases it could be all but impossible to separately meter.

@Bart H. Thank you for the input. I'll check that out when reviewing properties on site.

@Kathryn Stevens

Most all building could be separately metered  - if time & money are NOT constrained. 

Call the Local Planning & Zoning office. They may be able to refer you to one of their people in Utilities that could elaborate on how difficult the job might be from the provider standpoint.  

@Jim Cummings

Good suggestion! I can do that research before being onsite and to determine if I want to make an offer. Thank you.

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