Convert to Equity
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27 September 2010
There are several reasons an owner of a multi-unit structure might want to convert the building to a condominium regime.
- The owner might want to realize the equity in the building NOW as opposed to waiting until the rental operation pays off the existing mortgage.
- The total amount of money received by the owner might be more when the building is converted into condos and then sold individually as compared to selling the building outright.
- The owner might have a need to enjoy the equity in the building now due to liquidity problems associated with the downturn in the national economy.
- The owner might want to pay off the existing mortgage by selling a certain number of condos and then enjoying the rentals from the remaining units.
- The complex/building may need rehabbing but the cost is not justified in a rental operation but might be justified in a condo conversion.
- The rental market in the local economy may be soft but the market for condos may be very strong.
