Some developers choose to offer a portion of the units for cash-only sale, while offering the others as apartments for rent. Cash only offers a benefit to developers, since many commercial mortgage companies won’t lend for a building that is less than 51 percent sold. By offering a smaller number without financing and holding on to others and taking in rent revenue, developers are able to profit even during tough financial times.

As with other complex real estate transactions, these types of developments take a lot of legal planning and coordination with local government officials. Many different types of laws effect whether or not these types of developments are possible, and it is not always clear whether a particular location will be eligible.

Source: Detroit Free Press, “Rules limit condo financing, so sales in some developments are cash only,” Greta Guest, Sept. 16, 2012.

Our Detroit law firm handles a wide variety of complex real estate transactions. More information can be found on our website.