Q: I own a multi-unit building in Provincetown and I am thinking about converting it to condominiums. What do I have to do?
A: Hire an engineer to create a site plan and individual unit plans. The engineer will come to the site and measure each unit as well as the entire lot. When the engineer finishes, he/she will give you a preliminary plan. From that plan, you will decide which areas of the property will be exclusive to which units, where the parking spaces will be, and any common storage areas. You will then have an opportunity to mark up the plans. You should review them with your attorney and based upon that review, your engineer will amend the plans and make them final.
Next, work with an attorney to take the plan and draw up condominium documents. Your attorney will create a Declaration of Trust and a Master Deed. Part of the process will include a description of the units and a determination of the percentage of ownership for each unit. Your attorney will arrive at these percentages after you let him/her know what you intend to sell the units for. Your Broker can assist you with pricing the units based on recent sales. The percentages of ownership are based upon value.
Your attorney will also need you to provide: a master insurance policy, a description of the property, (i.e. is the heating oil, propane or electric, is it private septic or sewer, are there separate electric meters, are there any other costs associated with the common areas of the property? What rules would you like to see in the association (i.e. will weekly rentals be permitted, will pets be permitted, etc). Consult with your Broker when you are considering the rules and restrictions and when you are ready to create a budget. Your Broker can shed light on the reactions of buyers to certain rules.
When documents are complete, the attorney will record the Master Deed and Declaration of Trust with Barnstable County. At this time, you should establish a bank account for the Condominium Trust.
Now you are ready to sell your units. It is best to complete this process before you list the units for sale. It will save you many headaches in the end.
The Broker Team at Atlantic Bay Sotheby’s International Realty has assisted countless clients with this process. If you are thinking of a conversion, contact us first. We can connect you with all of the necessary players to get your job done properly and efficiently.
Thursday, March 27, 2008
Thursday, March 20, 2008
Buying a Guest House in Provincetown
Q: My partner and I have had a long time dream of owning a Bed and Breakfast, and we are thinking more seriously about starting to look in Provincetown. Can you tell me about the process and how much we will have to put down?
A: There are over 85 Guest Houses in Provincetown, and at any given time, approximately 10-15% of the properties are on the market. There are currently 12 being offered for sale, priced from $699K to $3,000,000. Most often, Guest House properties are sold completely furnished and equipped.
It is important to speak with a commercial lender at the beginning of your search so that you can determine the price range in which you should be looking. Will one of you continue to work at your present job while the other runs the inn? Do you own other properties? Do you have any outside sources of income? The lender will ask these types of questions and use all of your income to pre-qualify you for a loan. Generally speaking, you will be expected to put down at least 20-30% of the purchase price. This number will vary, depending upon your personal financial strength and credit history while also taking into account the income of the property you are considering.
Once you have identified a property and chosen a lender, you will work with your agent and your attorney to negotiate all of the details of the sale. The lender will order a commercial appraisal of the property and in some instances, an environmental inspection. The appraisal is a critical part of the process, as the appraiser will use the income to value the property. The lender may also ask you for a business plan.
The present climate is very favorable for commercial loans – rates are lower than they have been in some time and there are some great loan products available. In addition, there is money available through the Small Business Association (SBA).
Once you own your inn, the fun part starts! You will meet people from all over the world and become a part of the local business community.
For a complete list of all of the bed and breakfast properties currently on the market, please email us at info@provincetownrealestatenow.com.
A: There are over 85 Guest Houses in Provincetown, and at any given time, approximately 10-15% of the properties are on the market. There are currently 12 being offered for sale, priced from $699K to $3,000,000. Most often, Guest House properties are sold completely furnished and equipped.
It is important to speak with a commercial lender at the beginning of your search so that you can determine the price range in which you should be looking. Will one of you continue to work at your present job while the other runs the inn? Do you own other properties? Do you have any outside sources of income? The lender will ask these types of questions and use all of your income to pre-qualify you for a loan. Generally speaking, you will be expected to put down at least 20-30% of the purchase price. This number will vary, depending upon your personal financial strength and credit history while also taking into account the income of the property you are considering.
Once you have identified a property and chosen a lender, you will work with your agent and your attorney to negotiate all of the details of the sale. The lender will order a commercial appraisal of the property and in some instances, an environmental inspection. The appraisal is a critical part of the process, as the appraiser will use the income to value the property. The lender may also ask you for a business plan.
The present climate is very favorable for commercial loans – rates are lower than they have been in some time and there are some great loan products available. In addition, there is money available through the Small Business Association (SBA).
Once you own your inn, the fun part starts! You will meet people from all over the world and become a part of the local business community.
For a complete list of all of the bed and breakfast properties currently on the market, please email us at info@provincetownrealestatenow.com.
Thursday, March 6, 2008
Assessed Value
Q: I have been looking to buy a property in Provincetown. Can you explain to me what the Assessed Value of a property is and how that relates to the actual value of the property?
A: When you see a figure for the assessed value, this number represents a value for the property that the tax assessor has placed on that property. It is the number upon which a property owner’s taxes are based. The tax assessor arrives at this value by relying upon information from the property owner or by actually inspecting the property. Sometimes this figure is very close to the market value of the property and other times it may be quite different.
For this reason, we suggest that you not place too much weight upon this figure in your search. A more accurate measure of a property’s value is an analysis of similar properties that have sold within the past six months. When you have narrowed your search and you arrive at a property that you would like to pursue, ask your Buyer’s Agent to run a report for you of COMP SALES. This will be the more helpful to you than the assessed value in deciding what to offer for a property.
Remember, a property is only worth what someone is willing to pay for it, and an examination of comparable sales is most helpful in figuring out what a property is worth.
A: When you see a figure for the assessed value, this number represents a value for the property that the tax assessor has placed on that property. It is the number upon which a property owner’s taxes are based. The tax assessor arrives at this value by relying upon information from the property owner or by actually inspecting the property. Sometimes this figure is very close to the market value of the property and other times it may be quite different.
For this reason, we suggest that you not place too much weight upon this figure in your search. A more accurate measure of a property’s value is an analysis of similar properties that have sold within the past six months. When you have narrowed your search and you arrive at a property that you would like to pursue, ask your Buyer’s Agent to run a report for you of COMP SALES. This will be the more helpful to you than the assessed value in deciding what to offer for a property.
Remember, a property is only worth what someone is willing to pay for it, and an examination of comparable sales is most helpful in figuring out what a property is worth.
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