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Real Estate

Condo Conversion Arbitrage

Buy a rental building; convert to individual condos; sell for 30–70% premium.

Overview

Acquire a multi-family building at rental-income cap rate, then legally subdivide into individual condo units and sell each retail. Per-unit retail pricing typically exceeds bulk cap-rate value by 30–70%. Requires zoning eligibility, HOA formation, structural/engineering compliance, and local condo-conversion approval (some cities restrict). Best in supply-constrained urban markets.

Best fit
Value-add multifamily investorsUrban infill developers1031 buyers seeking retail exit
Estimated impact
30–70% value uplift per building

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