Home News Local firm buys East End apartments with condo conversion in mind

Local firm buys East End apartments with condo conversion in mind

by admin
0 comment

The new owners of Villas at Oakwood plan to convert the rental units into condos for sale at approximately $150,000 each. (Photo of Mike Platania)

Using an unconventional real estate operation, a local company is trying to bring over 100 affordable homes to the East End.

The investment arm of John B. Levy & Co. recently purchased 130 units of Villas at Oakwood apartments for $10.7 million and plans to convert these units into condominiums for sale, priced at approximately $150,000 each. is a dollar.

According to Bram Levy of John B. Levy & Co., the 56-year-old complex at 3526 E. Richmond Road was originally built as apartments before being “demolished” and converted into condominiums around 2007. They say it has changed.

Bram Levy

About 30 units were sold as condominiums before the property market crash in 2008, and the rest remained as apartments after the Great Recession.

Levy said the company embarked on the project after realizing that there were often fewer than 10 homes available for sale in the Richmond market for less than $150,000.

“It’s funny that a family can buy a house for that price,” Levy said, adding that it also offers opportunities for homeownership in the predominantly black Oakwood neighborhood east of Church Hill. I was.

“There is a 25% racial gap in home ownership between white and black families, the largest in the last 100 years, and the location of these apartments and current demographics are communities of color,” says Levy. said Mr. “East He sees an opportunity for us to bring 130 homeownership opportunities to Richmond.”

Apartments, which are currently 98% rented, can be rented for about $1,050 to $1,100 per month. If the unit had been a condominium sold at a target price tag of $150,000, Levy said the total monthly payments for residents would only go up by about $100.

But before they can begin the process of converting, renovating and relisting the apartments as condominiums, the company said it would first need to find four more lenders to sign on to the project.

Andy Little, principal of John B. Levy & Co., recommends treating loans as “portfolio loans” and keeping prospective condo buyers on their own books rather than selling them and selling them. said it needs a lender to agree to Secondary market securitization through Fannie Mae, Freddie Mac and others.

Andy Little

“This is an opportunity for (lenders) to put some loans on the books and take risks to create long-term wealth in these communities,” Little said.

Levy adds: But we still need four portfolio lenders. If you don’t, you can’t pull it off. That’s the missing link. ”

So far, 40 of the 130 units have been pledged by two lenders. Levy said he will be ready to start selling condos once his remaining 90 units are under contract. His original 30-unit condominium, sold in 2007, was not part of the project and remains privately owned.

The current tenant covered by the loan has the first right to decline the purchase of the unit.

“We want to convert renters into homeowners. That would be the best outcome here,” Little said.

Little and Levy said the unit will undergo a major renovation when it becomes available. Plans include replacing carpet with wooden floors, redoing bathrooms, fixing the roof, and replacing appliances.

“When we’re done, they’re going to feel a lot cleaner and more modern,” Levy said.

The company, which typically acts as an investment bank to help developers finance their projects, is seeking the advice of local housing nonprofits to help make this project a success, one person said. Levy hopes to be able to rebuild elsewhere in the future.

“The affordable housing crisis is often led by nonprofits. They all say, ‘We can’t do it alone. We need private capital.’ ’ We said, ‘Wait a minute.

Little added: If we can get this model right…if we can get these portfolio lenders on board, I think we can really move the needle on[affordable housing]issues. ”

You may also like