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#1594151 - 08/19/11 03:07 PM Purchase office space to convert to apartments
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I know we've had the reverse discussion many times, but I couldn't find a thread (in a very quick search) that discussed the following:

A company is getting a loan to purchase a property that is currently vacant office space. They are using their own funds to improve the property and turn it into apartments. Is this a reportable purchase?

As I'm typing this, I want to say no. The funds of the loan were used to purchase an office building. None of the money went towards improving, refinancing or purchasing a dwelling. Now, if the money were to be used to purchase and turn the property into apartments would my answer be different?

Any one have any input on this?

Thanks in advance!
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#1594163 - 08/19/11 03:26 PM Re: Purchase office space to convert to apartments #12
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
The intended use of the property being purchased is to be residential. I would report it as a home purchase just as I would not report the purchase of a dwelling to be converted for non residential purposes as a home purchase.
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#1594171 - 08/19/11 03:32 PM Re: Purchase office space to convert to apartments Dan Persfull
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That's been my thought too Dan, but this one threw me for a loop, mainly because they aren't using our loan to do the renovation.

It's best to stay consistent though, and that's an easy rule to remember.

Thanks for your input!
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#1594182 - 08/19/11 03:41 PM Re: Purchase office space to convert to apartments #12
Dan Persfull Offline
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Dan Persfull
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Bloomington, IN
Quote:
mainly because they aren't using our loan to do the renovation.


I took that into consideration in stating my opinion. If they purchased a dwelling that was to be later converted to office space with their own money the loan would not be reported as a home purchase due to the intended purpose. I just applied that train of thought to the reverse situation. Their intended purpose is to purchase a dwelling.
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#1594194 - 08/19/11 03:57 PM Re: Purchase office space to convert to apartments Dan Persfull
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Thanks Dan!
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