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Painted Lady, Other/Just Looking in Hudson County, NJ

Expense and Advice for Condo Conversion...

Asked by Painted Lady, Hudson County, NJ Mon Jul 30, 2007

I am curious about the average legal and filing expenses for doing a condo conversion in Hudson County, NJ. Also, I realize it varies, but on average, how long does it take? Does it make a difference in any of the above details if the building is 2-4 families or 5 /mixed-use? Any suggestions for some experienced professionals (ie. lawyers, consultants, experienced developer/flippers) to speak to would be much appreciated.

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To expand on my answer, a building consisting of 10+ units is also a candidate for conversion. Pretty much the same process as under 10 units but more expensive. Legal fees go to somewhere between $15k to $20k not including state and filing fees.
0 votes Thank Flag Link Tue Oct 23, 2012
I am doing several conversions in Hudson County NJ. My conversion attorney out of Hoboken handles most of Toll Bros things in Hudson so he is experienced, good, and has great connections. Under 10 units is going to cost around $10,500. This covers your initial disclosure exemption required from the state, master deed, all state fees, approximate management company fee to establish HOA, etc.. Attorney fee is typically $6,500 and the rest is state and filing fees.

It's actually quite a simple process. Knowing the market is critical and knowing your tenants situation is even more critical. Have fun trying to evict an older person who has lived in the building for 30 years. Non-payment is the easiest way to get them out but not the only way.

We have a specific area we target and we are doing extremely well for conversion/flips and conversions to hold. Also, if you are financing your building pre-conversion, the attorney will need to apply for certain release provisions in the mortgage. Without that, bye bye conversion idea without refinancing. You want the best condo conversion specialists in the NY Metro area? Call me and we can meet with my attorney to discuss the concept. People in 2002 made millions doing this in Hudson. The timing is eerily similar today for that same opportunity and how the market is rebounding. Click on my link below to see an article I wrote about conversions in NJ.
0 votes Thank Flag Link Tue Oct 23, 2012
Depending in what state you are looking to do this condo conversion it all depends. In NJ first and foremost find an attorney who has experience in condo conversions, it is less of a headache if you find the right one, Vincent Lapaglia in Hoboken NJ is a really good one. The average cost of a condo conversion between master deed and hiring an architect for floor plans can range from $10-15K. Also in NJ a condo conversion 6units and under are relaltivily easy and fast, over 6 units can become more complicated and time consuming.
Web Reference: http://www.OurNJhouse.com
0 votes Thank Flag Link Sat Sep 15, 2007
The conversion process involves converting your existing deed into a master deed, and then creating individual deeds per unit. Figure around $10k in legal costs. You also need a ratio of parking spaces to rental units, although it doesn't have to be 1:1. You also need a way of getting taxes, water and sewer bill and insurance, to be paid by the condo association, which is yet to be formed. So, you get to figure out the percentage of ownership per unit, and people will pay these costs based on their percentage of ownership. For example, if you have a 6 family building you're converting, each new owner has a 1/6th share of the building. If your taxes are $5,000/year and water and sewer=$2400/yr and insurance is $4400/year, your overall fixed expenses=$9,800/year, so as part of the condo dues, you figure 1/6th of $9,800 is the minimum, plus cost of snow removal and building maintenence. Make sure you separate the boilers for common areas vs per unit by hiring a plumber if you haven't done so already. In other words, the building is now longer owned by you, the landlord, but is being sold into individual deeds, so the owners of the units need to manage those expenses combined that you used to manage yourself.

Another thing to keep in mind is the "right of first refusal". That means, your tenants have the first chance to buy the units, before they are offered to the general public. So, if you are collecting rental income, you need to file with sufficient notice to your tenants, of your intentions of condo conversion. If you are going to be spend money on converting each apartment from "rental quality" to "condo" quality, it helps if you can prequalify you tenants for what will be a mortgage payment rather than a rent payment. Likely, if your tenants can afford the unit once it's improved and updated, if you work with them to improve their credit and ability to purchase the unit. On the other hand, if you have a mass exodus from the building, be sure you can carry the note completely on your own, without rental income to offset your carrying costs while you do work on the apartments and then subsequently sell them. Good luck and I hope this advise helped.
Web Reference: http://www.sashagonta.com
0 votes Thank Flag Link Mon Aug 27, 2007
The city planning department will have the best answer for you. The biggest issue with apartment to condo conversions is the amount of parking spaces. Normally, the building will need to abide by current requirements for parking. Unfortunately most apartment buildings were not built to meet today's parking requirements. In San Jose, 2.4 parking spaces per 2 bedroom unit is required. Most buildings in my market have just over 1 per unit + some guest spaces.
0 votes Thank Flag Link Mon Jul 30, 2007
Mario Pinedo,…, Real Estate Pro in Beverly Hills, CA
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I believe less than 10 units is goes quite a bit quicker and less expensive,but I am not sure of the costs involved? Good luck....
0 votes Thank Flag Link Mon Jul 30, 2007
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