Condo Conversion

[mandi]

Can anyone tell me how a condo conversion works? For example:

If I buy a six unit building and convert it to condos, how does it work when I sell off the individual units? Do I have to refi. the original note or do I get the proceeds from the units I sell?

mandi

[Wes]

If you know you are going into the deal to convert and sell off each unit, you would obtain a "type" loan consistent with this plan.

This should include a release clause that allows you to sell units without effecting the overall loan.

As long as you make it clear to the lender funding the loan that this is your plan, they should have no problem structuring your loan in this way.