hey folks my name is chris hauset today we're going to talk about a pretty
interesting and unique topic and that is what are the risks of buying a condo in
a mixed use building
well this is
quite a delicate topic let's first begin by discussing what a mixed use building
actually is when we say mixed use we mean a building that has residential
areas so for example condominium units as well as commercial areas such as a
retail store front on the first floor which is one of the most common cases
maybe there's a like a bodega or potbellies or something like that on the
first floor and you know oftentimes especially if the building is a bit
newer you know that commercial unit will be
separately owned and sometimes separately owned by the original
developer of the building oftentimes it's very lucrative for the
sponsor developer to retain that commercial unit and just collect the
cash flow from the very stable rents that typically come through from the
commercial tenants so especially in this case where the
original developers retains the retains the commercial unit you really
have to read your condo docs carefully read the original offering plan
because i mean these guys are smart they're usually going to
you know write the offering plan in a way that you know might favor them more
so than the residential owners and this is why it's so important you know you
buy in a building that has something down there um you know obviously it's
quite rare for the condo for the condominium
association to actually own that commercial unit it's extremely rare to
see that so first of all check that because if you if they do own it it's
actually a coup sometimes you might see that in some older co-op buildings about
to actually get income from rent from commercial units that the
building owns and that's actually fantastic that's quite an asset to have
but you know generally i'd say that's quite rare so check to see you know
the offering docs to see who actually owns that that commercial unit
assuming that it's the developer or some other uh other entity
you know see see what sort of uh rights and you know
they have uh how much power they have in terms of voting on the board what
they're responsible for in terms of payments
you know contributions to common charges and such you know you'll see
sometimes very cleverly worded offering plans where the you know the commercial
unit might have a cap on how much they they owe for certain you know categories
of expenses for example or maybe some percentage like for example maybe
they're only responsible for two percent of you know all costs related to
electricity when you know they just by square footage basis maybe they
own like 20 of the building but you know they're responsible for two percent for
the for sort of the the building you know common areas or such
uh you know they might have a cap on how
much they're responsible if the building decides to levy a special assessment for
facade work you know maybe they they're responsible for only ten thousand
dollars maximum per year or something like that so you know these dogs will
vary by building and sometimes they're you know it's quite innocuous like it's
actually quite fair but it's definitely important when you
see something like that to check for potential conflicts of interest or you
know situations where it might be you know unfair to the residential
owners versus the commercial owner they might have some
structural advantage to really insulate or subsidize their their costs or their
share of the the common uh area sort of you know utilities or whatnot so super
important to find out it you know it may not really matter if the price is
right so you know it really depends but it's something to keep an eye out for if
you have any questions drop us a comment below shoot us an email
team@hauseit.com
and of course if you're looking to sell or buy we can help you we cover
uh well first of all we offer uh our Agent Assisted FSBO service where we can
help you save six percent all six percent and broker commissions
and if you want something more hands-on we have a one percent for full service
listing option and if you're looking to buy we can help you save uh two percent
or more on your home purchase by giving you
two-thirds of the buyer agent commission subject to us keeping a small minimum
and that can be quite substantial because uh you know buyer's agents will
typically earn three percent but they can earn more uh or less but uh for
example here in miami many new developments offer five six seven
percent of buyer's agents to incentivize them so two-thirds of that to you can
cover your closing costs and more we cover new york city long island
hudson valley all of southeast florida including
miami-dade county where we're based broward county palm beach county
saint lucie and martin counties my name is chris at Hauset and we'll see you on the
next one