GET TOP DOLLAR FOR YOUR CONDO.
Contact us for a free consultation.
WHAT IS A CONDO DECONVERSION?
A deconversion is the process where all the owners in a condo building sell their units simultaneously to an investor who manages the property as an apartment rental building. In Illinois, if 75% of owners vote to approve this sale, it becomes binding on all owners. Deconversions are specifically designed to rescue condo owners from high monthly assessments, bad mortgages, and undervalued or hard-to-sell units.
APARTMENT BUILDING TO CONDO BUILDING TO APARTMENT BUILDING
If your condo is in an older building (built before the 1960s) chances are it was an apartment before it was a condo. (Remember: the difference between an apartment and a condo is that an apartment is rented while condominiums are owned.) During previous real estate cycles, condos were in high demand. So owners of apartment buildings converted the units into for-sale condos. Now, high rents, increased rental demand, and low inventory have created a situation in which multi-unit condo buildings can be profitably deconverted back to apartments.
BENEFITS OF A CONDO DECONVERSION
Achieve a better price than if condo sold individually due to high investor demand for rental buildings
Ability to sell your condo and remain as a tenant if desired
Transaction costs can be lower than conventional sale
Avoid need to paint, rehab, or update unit before selling
Escape from high ownerships costs or from a unit that otherwise is difficult to sell
WHAT KIND OF BUILDING IS AN IDEAL CANDIDATE?
In an area with strong rental demand
50% or more of the units are occupied by renters
Many unit owners who bought before the Recession
High/rising maintenance costs and HOA dues
HOA in or facing poor financial situation
Facing litigation or lawsuits
Ineligible for FHA loans due to 'concentrated ownership' (single entity owns more than 10%), too many renters, or too low reserves
"We had some really difficult challenges with our building, including a few owners that were severely underwater on their mortgages and others who were resistant to the whole idea. AJ spent months working patiently with our owners, found a buyer and price that made everyone happy, and put out about a dozen fires that I thought would sink us. His professionalism was noticed by all of us and I would highly recommend him to any other boards who are considering a deconversion."
-Tim Schannep, HOA President, 2000 W Birchwood
"AJ gave a presentation at our board meeting and we decided to give a deconversion a try. AJ spent countless hours on this - from making sure all the owners understood everything they needed to do, to arranging showings and inspections, all the way through to closing. After receiving four offers, we eventually sold the building to an investor for a 30% premium to the market price."
-Susanne Ali, HOA President, 6436 N Hamilton Avenue
"We had an offer on our building and I wasn't sure if we were getting a good price. I contacted AJ to do a value estimate for me and I realized that the price we were being offered was fair. AJ was very knowledgable about the numbers and I appreciated his advice."
-Christina D., Unit Owner, 182 W Lake Street
A condo deconversion is a complex transaction with many moving parts and potential pitfalls. CCDS, along with chosen legal counsel, will guide your condo board every step of the way to ensure a smooth and successful closing. We'll handle it all - from presenting the concept to your fellow owners, to pricing and marketing the asset, to negotiating offers - all while following the strict rules that govern this type of transaction.
We will prepare a detailed presentation for your board meeting to answer questions and explain the process to your fellow owners.
We will run a financial analysis, study comparable sales, and research local cap rates to determine an appropriate listing price.
We will make sure all steps are met to comply with the IL Condo Act and ensure a smooth closing at top dollar for your condo.