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March 14, 2005
making a condo
Has anyone else tried this?
My wife and i are buying a brownstone with another couple. It is already cut into two apartments ( a legal two family) but currently owned by a single family.
We're getting a mortgage together to buy it, but plan to go condo as soon as possible, at which point we will each get our own mortgage.
I'm researching the costs associated with doing these two transactions, particularly what taxes we might have to pay twice. Additionally, I'd be interested to know how long it has taken others to convert a two unit townhouse into a condo.
Comments
From what I understand the process takes about a year and will cost approx. $20k +/- $5k. The process, time, cost, etc. to convert a 2 unit property is the same as a 200 unit property, the same paperwork, legal aspects, etc. have to be filed.
It's a couple of months to put everything together and then 6-9 months to get it approved so all told about a year to complete the process.
Once the property is converted the RE taxes will be recalculated and will go up, condos are taxed differently (higher) than a 2-family.
Regarding costs you will pay twice I believe it will be most of your closing costs. Title insurance, legal fees, mortgage recording tax(check this one, on a refi you can avoid paying it again but I'm not sure this will qualify) your lawyer, bank's lawyer, etc.
All told it will cost a good chunk of change.
It sounds like you want to do this to divide the ownership btwn you and the other couple. I think the better option would be to look into buying as Tenants in Common. I don't know all the details about this but I believe you can buy like that from the start, without having to go through a costly and lengthy conversion process.
The other option is to set up an LLC that you both own 50% of and grant each party exclusive leases. If one party wants out they can sell their shares in the LLC. Kind of like setting up your own co-op but much easier.
Run all this by a good lawyer to verify your options but these are my thoughts based on the partial information I have.
Good luck
Posted by: Ben at March 15, 2005 4:38 PM
I am also in interested in converting a 1 family to a four family in brooklyn. Any information or conversation would be welcomed.
John
Posted by: john at September 18, 2005 10:51 AM
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