From a LENDING perspective, how are you managing condo conversions where a single mortgage is already in place, and pay as little in transactional fees as possible?
- Create a new holding LLC and sell aggregate units to it
- Refi, buy out the old mortgage, and transfer all debt to one of the units
Boston, Investor, Developer, Architect
I believe typically you get financing for the building which will allow partial releases as you sell the units, at a preset percentage pay off per unit ie. 115-125% if that unit percentage of the whole. You’d never be able to refi the whole place with only securing one of the units.
We've actually been able to refi the whole place based upon one of the units when the value was there. But it cost us a lot.
So, sounds like you are saying you'd finance the building conversion versus trying to do it post-conversion?
@Peter Vanko you might get more responses if you posted this in the multi-fam or commercial forum. This forum is "in general" for people seeking mortgages on individual units. Please leave this post up here in case you get more people to chime in but I think you'll get a few more responses under the other forums.
Thank you, Andrew!