Is making your own condo conversion difficult?

Yes and no. If you don't have to do the conversion immediately, you can live in the house as co-purchasers, as long as you find a bank to approve the loan. (If you're paying cash it's even easier, obvs). I hear different quotes all the time regarding the legal/architect/filing fee costs, but I would set aside $60K just to be safe and make sure you will remain friends after it's done (more likely it'll cost closer to $30K). Then you have to refinance, though, once the conversion is complete. Also a pain. If you can, make sure you and your co-purchasers complete all needed upgrades prior to completing the conversion - you don't want to find yourselves arguing later about whose responsibility the roof is, since it only leaks into the upper condo, or whether the reserve fund should be tapped to carpet the stairs (since the noise only bothers the lower condo).

Even good friends can find this process challenging. But it can be a great way to maximize the value of your investment. Even if you're buying in Manhattan, you may find the forum pages at brownstoner.com helpful every step of the way - even if all you need is a place to vent your frustration!

Tina
(Brooklyn broker)

Thanks so much Tina! We are both all-cash buyers, so, for what gather from your post, it will be easier.

I gather

there are several problems:

1) Firstly after the conversion, you may have a LOT of problems finding anyone who will finance a unit in a 2 unit condo. This might not be meaningful to you today if you both plan on staying in the deal all cash, but what about when one of you wants to sell? I assume that's the impetus behind making the condo in the first place.

2) Tina's points

3) I don't know what things are like where you are looking, but in the deals I've seen over the past few years, there's a PREMIUM on a single family, so you would be devaluing the property by dividing it. Do you guys really need to live together in your own building badly enough that's it's worth buying at a premium and then immediately devaluing the property?

Celebrity gossip: from what I remember, when they were still together, Uma Thurman and Ethan Hawke first bought the largest unit in a brownstone on West 13th Street in a 3 unit building (the unit was more than half of the building). They then bought the remaining 2 units and converted it to a single family. When they split, it went on the market and I asked the broker who was handling it a series of questions about how they "undid the Coop" and didn't receive what I considered to be satisfactory answers. From what I heard, James Gandolfini was in contract to buy it, but didn't basically over the very same issues I had queried the broker about when it first went on the market and there was some litigation over it. If only the broker would have paid attention at the beginning............ old story.

Mimi,

Did you speak to a lawyer about leaving the bld as a single family, owning it as an S-Corp or LLC and having an agreement between your family & the other family, which would divide the bld into 2 units?

"it went on the market and I asked the broker who was handling it a series of questions about how they "undid the Coop""

I agree w/ 30yrs. I think condo-ing the bld can leave to complications down the line. Also, will it be hard to find financing?

30yrs, financing a condo in a 2 unit condo makes it harder to finance because of the liability (2nd unit defaulting, etc)?
I like the idea of buying a brownstone, but 1) in spite of the almost total lack of closings in the last few months, the owners are not at reasonable price levels yet, making it harder for me to afford one andand 2) I live overseas, and controlling the reno and the rentals from far away can be a headeache.

dwell, my lawyer advised against buying with other party unless we convert, because of the possible problems ahead (one wants to sell the other doesn't, etc.) and 2) I live overseas, and controlling the reno and the rentals from far away can be a headache.

Tks all for your posts!

"financing a condo in a 2 unit condo makes it harder to finance because of the liability (2nd unit defaulting, etc)? "

1) It's just one of those "lending criteria" which don't need to be explained, explainable, or rational to still be enforced by lenders.

2) yes, think of a 100 unit building where 2 parties each owned 50 units. Only it's worse because at least in that case, it's POSSIBLE that the unit owner can sell some of the units, etc. where as here it's "all or nothing".

3) they know there's no professional Management overseeing the "project" (i.e. all 2 unit condos are self managed, have no reserve fund, etc.)

4) more stuff, but you get the idea.

Thanks, Mimi.

Yes, the long distance thing is a drag. I wish you luck in your endeavor.

Mimi,

I wanted to stay out of this because your question was so specific . . . but here I go: I think it's a very bad idea to mix business and friendship. So unless the other person is neither a friend/relative, nor a friend/relative of a friend/relative, I'd advise you not to do it even with the legal separation that a 2-unit condo provides.

Separate from that, I'm not saying the other replies on this thread are wrong, but I know that in other places (like Chicago, Boston, and probably Frisco), three-unit condos are pretty common when old houses are cut up, and two-unit condos also exist for the same reason. Maybe something's different about NY law, or maybe NY lenders can't be bothered with unusual (to this local area) arrangements.