Realtor · Beverly, MA · Member since 2015 · 108 posts · 19 votes
I am analyzing a potential deal where I can flip a 2 family in Massachusetts. I am trying to decide what the better move is--flipping and keeping it as a 2 family or doing a condo conversion. I think that the condo conversion has a better upside and will fetch more $ in the end. My question is, what stops me from doing the condo conversion and listing the property as BOTH a 2 family investment property AND 2 separate condo's? Ultimately the underlying concern or question is if a condo is created, does it need to be used/sold as such?
Also, what are the costs to consider when doing condo conversions? I am not looking for $ amounts, but rather specific concerns to be focused on. The only variable that I can think of that would be different then just rehabbing as a standard 2 family is the associated attorney fees for creating the condo docs (master deed, etc).
Ah.. the best kind of conversion. I offered the rear unrenovated unit to my tenant at the avg price per sqft foot for the neighborhood and he wants to buy it.. So that settles my internal debate. If I need a lawyer for the conversion I will let you know.
once the condos are created, you'd need separate permits for each unit as well. Location is everything concerning condo conversions. In good towns they work. If the neighborhood has a lot of renters, you may sit on it awhile.
The beauty is that even if you sell one and the other is slow, your exit strategy can be to rent it and be okay (lease option or one year lease)
@Justin Repp I would suggest checking your comps. Single family and condo's will command a much higher price per sq ft than a multifamily house. If you're looking at maximum price, that would be the way to go.
It might not be so easy to convert it to condo's, given all of requirements.
I also agree with @Tim Wilkinson, once you convert it to condo's, it would not be feasible to go back, as such you will not be able to market it as a two family house, just two separate condo's.
I have done just this in Bedford, MA. It was not too difficult. I first had to pay for a master plot plan survey and have the structure surveyed. I had an attorney who consulted with the architect, The property was split with specific drawings of both condo units, we divided the land as "Exclusive use" as it was a side by side rather that "Common use property" this allowed us to have no HOA fees also as both units had their own driveways etc.
All utilities were already split.
A master insurance policy was required to cover the entire structure (This is the only shared fee from both units)
My attorney had to split the deed and file some other paperwork that i do not remember the details of but it was painless at the time.
Hi Justin, I have also been considering condo conversions in Beverly. It seems like a good town to try it in. What did you decide to do? Could you please give an update.
Justin, it totally depends on the where. It's more about the market for the end product, than about the increased cost. The increased sell price per square foot should more than make up for the increased cost.
But once converted, they are two separately deeded units, and can't be sold as a duplex with one deed. You can sell both units to one buyer, but that buyer now has two properties, with separate tax bills, etc. They have to go through a legal process to combine them back, if they can do it at all.
So if you are willing to share the location, we can better give an opinion as to whether to convert.
@JP Krueger project didn’t pan out. I do have clients who are doing a conversion of a 3 fam in Eastie into 3 condos right now. I have a great attorney I could recommend if you need it. Shoot me a DM if interested.
Thanks! Do you have their builder's contact? It seems like price per sqft in the Eagle Hill area of Eastie is all over the place. From $530 to $716. It's hard to dive in with that level of uncertainty.
Ah.. the best kind of conversion. I offered the rear unrenovated unit to my tenant at the avg price per sqft foot for the neighborhood and he wants to buy it.. So that settles my internal debate. If I need a lawyer for the conversion I will let you know.