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Frequently Asked Questions
Here's why you need to GO-CONDO!!

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Condo Conversion, what is it? How do you do it? And why should I do it?

Condo conversion is the division of existing units of an apartment building into separately owned and maintained units, separately taxed, under one association. As to "How", the professionals at At Home Realty Group, Inc. are prepared to walk you through this inexpensive and smooth transition from apartments to condos. And as to "Why" to do it, here are some reasons...

1) NO MORE TENANTS
2) Sell for up to 1 1/2 times what you could get if you sold it as an apartment building
3) Pay off your mortgage by selling off some of the units, while keeping the rest rental

The simple fact is that you make substantially more money by selling off pieces instead of the whole. That is exactly why hundreds of other complexes are doing the same right now. The numbers don't lie.
Go Condo Conversion Example

12 Flat apartment building with 10 - 2 Bedroom, 1 Bath apartments and 2 - 1 Bedroom, 1 Bath units being sold in an unremodeled state. Owner has had problems with occupancy, tenant complaints, and $HIGH$ REAL ESTATE TAXES. He wants out, what are his options? There used to be only one, to sell the apartment building as a whole. Now, he has another choice, GO - CONDO!
condo
$1,000,000 Total Sales
Unit # Price "As-Is" Style of Unit
1$129,900.002Bd, 1Bth
2$129,900.002Bd, 1Bth
3$129,900.002Bd, 1Bth
4$129,900.002Bd, 1Bth
5$129,900.002Bd, 1Bth
6$129,900.002Bd, 1Bth
7$129,900.002Bd, 1Bth
8$129,900.002Bd, 1Bth
9$129,900.002Bd, 1Bth
10$129,900.002Bd, 1Bth
11$99,900.001Bd, 1Bth
12$99,900.001Bd, 1Bth
$1,498,800 Total Sales
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Frequently Asked Questions
  1. Can the complex be converted to condominiums?

    This depends on the village/city that the target building is located in. The easiest way to get an idea is to look for other buildings in the same village/city that have already been converted.


  2. What does it take for this complex to be eligible for condo conversion?

    This depends on the requirements set forth by the village/city in it's respective condo conversion ordinance (if one exists)


  3. What about pricing?

    You don't want to give the condos away, but you definitely DO NOT want to price yourself out of the market and be stuck with product that won't move. There are many factors to price. When determining price points, comparables, number of units for sale, views, absorption, etc. must all be taken into consideration.


  4. What if I have an outstanding mortgage(s)?

    If you have a mortgage on your building, there are issues that arise. The optimal situation is that the bank holding the mortgage already has a partial release policy. So the bank will agree to allow part of the mortgage to be paid over the closings. If there is no policy in place, the bank may make arrangements. Your next option would be to set up an escrow account with the title company and deposit full proceeds from each closing until the balance on the lien is paid. Your third option and probably your most costly would be to refinance with a bank that has a partial release policy. We have relationships with banks that we can share with you if needed.


  5. How do I set up the association?

    An association is incorporated by our attorney, and an analysis of last years expenses are reviewed. A budget is prepared based on this review and assessment numbers are derived.


  6. What about insurance?

    All insurance policies must be changed over from a policy protecting an apartment building(s), into one that covers all the individual condos and allows the mortgagor of each individual unit to be on policy.


  7. What about appearance?

    It is of the utmost importance that a clean, well-maintained, uniform, renewed common area feel is kept throughout the selling process. In many of our projects, when things like hallways are old and drab, we go ahead and renew them in the building or buildings that have the models and complete the rest after 75% of the units are closed. There have been instances in which we had to replace all the windows and sliding doors. People like to see the common areas and aspects of the complex to be neat, new, and clean.


  8. What do I do with my tenants?

    The first thing we do is to try and contact everyone currently living in the units and explain to them the advantages of owning versus renting. Historically only about 5-15% of tenants end up buying their units. There is no rush to remove the ones which choose not to buy, but I would no longer renew their leases. Try to keep them on month to month if possible. Some villages allow the tenants to break the leases. This information is found in the village/city ordinance.


  9. Why should I convert even if I don't plan on selling right away?

    One of the advantages is to convert into condos now, before the village/city passes ridiculous and/or cost heavy requirements. Another reason to convert is to pay off a mortgage and keep the remaining units as rental. There is also the advantage of liquidity. You are in a position to sell off part or all your interest at any point. Also, the value of separate units is higher than if it was still an apartment complex. This means you have more equity to borrow against, not to mention that it is easier to borrow against condos than it is against a rental commercial property. Remember, also, rates of interest are lower on non-commercial properties.


  10. How do you sell the units?

    • We are a licensed real estate brokerage; this allows us to list the properties on the Multiple Listing Service.


    • We provide a licensed sales staff with regular on-site sales center hours and/or after-hours appointments.


    • We provide take away marketing material.


    • We advertise through television, radio, newspaper, and other means we find effective.


    • The project would be featured on our website www.athomerealtygroup.net


    • We provide signage, both on the outside of the property and in the sales office.


    • We sell to our own database of investors/buyers that we have built up over the years.


    We try to sell as many units as we can "As-Is", it makes it easier on everyone. But in order to sell "As-Is" effectively, you must offer a remodeled unit at a price that most will choose to remodel themselves. The price difference of about $25,000-35,000 is usually sufficient. But you must be ready to remodel if someone chooses it. We have reasonable, quality construction companies we can recommend.


  11. Do we sign a listing agreement?

    We require an exclusive listing agreement to be signed between the Owner(s) of Record and At Home Realty Group, Inc. All units that are converted need to be covered under such agreement.


  12. What are your fees?

    Our commission rate varies on project size, demands, and how much involvement required in the conversion process. Most brokers charge a percentage of sales price, "line 1." on the HUD and that's that. We charge against the true sales price, sales price minus any concessions given to the buyer. People are always asking for closing costs credits. If someone needs $3,000, we write the contract for $3,000 more and agree to give said amount at closing to assist the buyer. Now why should you pay commissions on this fluff money? We don't think you should.


  13. What do I do with my proceeds from the sales?

    Now I've cashed in, what do I do with my money? There are different views and routes to take. First one being that capital gain rates are at an all time low, and it may be a good idea to pay them now instead of possibly paying at a higher rate later through a 1031 Tax- Free Exchange. It hasn't been that long ago that the rates were at 28%. The second thought being just that, a Tax-Free 1031 Exchange. But the problem is finding the right next investment. My professional staff and I can help locate the property that fits just right for your individual situation. We have helped many of our clients in the past this way. The third option encompasses both, 1031 Monies and/or post tax profits. When we search the Chicago land apartment building market looking for the next great conversion, we don't want to pass up a quality project just because the capital required is not there. So we pool monies from investors to have for any additional capital outlay needed to secure projects. For more information, see our investments section of this website.
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