Sharing a townhouse and converting it to 2 condo duplexes

I think this was pretty common in Park Slope, with many buildings having 4 or fewer units.

you should look into tenancy in common. It's an easy way of splitting a townhouse.

taxes will chane upward dramtically -- multiple unit fees

no offense nshipley, but don't do TIC. Probably better to form LLC. Best think is to consult a RE attorney. Please know exactly what the implications are, otherwise, you could lose your shirt.

Tenancy in common is fine if you intend to live there forever and ever with the same family. Nightmare when you want to sell. Taxes may change dramatically when you convert to condo, but maybe not - depends on the neighborhood.

Mimi,
Are you still thinking about an SRO?

mimi, takea look at this article. It's a bit dated but unless laws have changed significantly, it should still apply.

http://www.nytimes.com/1985/09/29/realestate/talking-two-families-the-merits-of-condo-conversion.html?&pagewanted=2

Do NOT hold as tenancy-in-common. Under such ownership, one party has the right to sell the ENTIRE property WITHOUT the other party's consent.

Yes, HDLC, that's what I thought. Also, your property interest could be jeopardized if another TIC has a judgement against them or goes bankrupt. And, there's potential for partition actions.

Would love to hear if someone knows this: What's the best way to go? condo or LLC?

Hi dwell. For what I could gather, the SRO is not so problematic if you have the cert. of no harrasment. The one I was looking at is the one at 699k (pre-foreclosure), and it has the cert. now. For what I learned, one will need to wait months and maybe walk out without the house, since this has happened before with this property. If it sells at this price, the bank would have to accept 699k instead of 1.65m of mortage the owner has. It also has tax liens. If you have the patience and guts, it might be a great investment.... Back to your question: I will only be interested in an SRO without tenants, with the certificate of non harrasment, and not in a foreclosure situation.

Thanks all for your posts!!!!!

Hi Mimi,

Thanks for the update.

An SRO in foreclosure: that's a double header!

At what point in the foreclosure process is it? I've always wanted to buy a prop pre-foreclosure, but, it's complicated, right?

How would you handle the tax liens? Would you pay them? Or you don't want to deal with foreclosre at all? I imagine an SRO in forclsr would be in really bad shape due to neglect & need lots of work.

Does the cert of no haras expire?
Agree that you should avoid occupied SROs.

Ballpark, about how much would it cost to turn an SRO into a legal 2 family? I imagine you'd have to gut the entire building.

Mimi, it's a very interesting project & whether it goes thru or not, you'll have learned alot.

Dwell, it is a pre-foreclosure. The owner got permission to extend his possibility of selling. He tried a couple of times at higher prices and couldn't (offers were not all cash.) I learned that when you buy from a stressed owner you have more risks than when you buy from the bank (nobody to go after is something is wrong) and if you buy in an auction the risk increases. Tax liens seem to be an issue, and other debtors can come along the way. The broker says that title insurance serves the purpose of having a clean title, and one shouldn't worry about that...
No idea if the certification expires. I have so much to learn!
The house is in bad shape inside, maybe you can save some floors and rescue the stairs. It is a total reno project.

My question has to do with the possibility to buy a townhouse (SRO or 1 to 3 unit) with other party and then construct 2 units and have 2 deeds.I just don't like the type of renos done by sponsors to duplexes.

"The broker says that title insurance serves the purpose of having a clean title, and one shouldn't worry about that..."

Mimi,
IMO, the broker is over simplifying a bit. Hope you have your own attorney to check title for you. One time, I was interested in a bld & I ordered a title report before I bid. So, you can ask your lawyer or a title company to order a title report now. The report is not expensive. I like to check title early on so I know what I'm dealing with.

Also a good idea to check violations at Dept of blds; you'll need the block & lot: http://www.nyc.gov/html/dob/html/bis/bis.shtml

You want to buy w/ another party & then have 2 deeds? Again, please speak to a RE lawyer now. I think that if you buy a building, you will receive one deed & later on, you can apply for separate tax lots & split it into 2 deeds. But, I think on your initial purchase, you will receive 1 deed.

As mentioned, you need a lawyer to explain to you the pro/cons of doing (a) 2 deeds, or (b) one deed, form a limited liabilty company (LLC) & have an agreement between the 2 co-owners, &/ or c) other possibilities

If you create 2 condo units, you will probly have to file an offering plan with the NYS attorney General, which will increase your costs, but may be worth it in the long run, I don't know.

Another suggestion: you be the sole owner & rent out the 2nd unit. Guess you don't favor this cuz you want to share expenses with a co-owner?

Yep, 900k + reno: over 1.5m. Would love it. Can't afford it.
I wrote the broker blurb about title just for information, I would never stay with his word...
I guess you buy a property jointly and then convert it to condo. Can't see any other option...

mimi
I used http://www.usaprotitle.com/ for a title search on a place I was trying to buy. V Good and prompt and it cost $69.
The previous time I went through a lawyer who charged me $700 for a title search and review. He asked $1000 the next time so I dumped him, and decided to try usaprotitle for $69, just to see. They were great, and I am never using that lawyer.
I don't know /understand much about the condo process -- it seems cleaner but expensive.
Forming an LLC is easy and if the LLC buys it the shares can be cleanly defined, as well as terms of ownership etc. However, I dont know what this does for taxes etc
A lawyer will be good to ask these questions.
Does anyone have lawyer recos?

oh so the $699k price on that property is a teaser -- they will really only go for $900k?
They may eventually be looking at 500 based on your description. It was not that long ago that shells were selling at that level.

It might go for 690. The 900k I stated was not for the SRO, was for townhouses in best Harlem location that need reno but still have details you can recover.

usaprotitle is a good resource, thanks joe.

Mimi, it's an interesting project, hope you'll post updates.

Has anyone done a condo conversion where one of the units (the bottom unit), is a commercial space? Like a corner store with two apartments above it?