All Forum Posts by: Bruce D. Bolton

Typically the re-zoning to condos will be a pain point. The sum total of taxes of each of the 4 units will usually be higher than if it were apartments. An HOA would have to be formed. Mostly tho, make sure there is demand for your product. I'm assuming it comps out otherwise you wouldn't consider it, but buyers have greater thresholds for quality than renters. Especially in today's high interest rate environment, a low income buyer is usually going to be better off renting than buying.

Hi Bruce, i'll start by saying i'm a mortgage person, so please understand the context in which my response is coming from. 

you'd need to create CC&Rs/bylaws and establish an HOA in order to do this. You'd also need to establish a budget, and secure a master insurance policy. i THINK you need to do these things before reaching out to your municipality to have it converted officially with the county or city but they would be the first ask for steps in order.

i will add, this would make financing on these units a bit challenging, as in the mortgage world, at least initially, they would be considered "non-warrantable" condos. Tons of rules here which make a condo association "warrantable" vs "non-warrantable" but just one on the list: one owner owning the majority of the units alone will typically make them non-warrantable. This will affect things like required down payment, rates, and even which lending institutions would be willing to finance. 

i encourage you to look up warrantability for financing just so that you don't have surprisses when your 20% down buyer cannot finance that way. That said, I've been seeing the TIC (tenants in common) becoming a popular alternative to converting to condos. may want to look into that as well.

none of this is intended to discourage you from moving forward, just some food for thought. 

Hope this was helpful.

Good question, Bruce

I have the same question so thank you for posting. As for the Indianapolis market goes, I imagine a RE attorney or Title company will be a great starting point for me. I would make sure a bundle of rights for ownership are available individually, per unit of course, then worry about warranty and purchase options. I would be happy to take 20 percent down, and owner finance each unit, if banks are that picky. 

Good luck to you, I will watch the thread for other posts with personal experiences.

Chad