Realty firm owner Caroline Auza, left, describes the floor plan of a condo conversion unit to potential home buyer Soraya Best.

David Sanders / Arizona Daily Star

Other articles by Sarah J. Bell:

Interpretive signs sought to point out what will be in store for future OV park Emergency partnership Check out Oro Valley's bigger, better library Oro Valley hopeful's Web site violates campaign law Oro Valley art in spotlight Gala will be a crucial fund-raiser for Oro Valley arts New name, new recipes Official helps renter, 82, stay in her home Tucsonans come through for Food Bank, big-time Food Bank event will honor ex-mayor Murphy

Trades/Construction
RANCHO RESORT
MAINTANANCE POSITION General
A1 Communications
Cable Techs Health Care
Sierra Tucson
Eating Disorders Program Coordinator

Getting a good deal on a condominium in Tucson could be as easy as renting an apartment.

Speculators in Tucson's sizzling real estate market are using advance knowledge of which apartment complexes are about to go condo to get good deals by moving in before it happens.

When investors buy an apartment complex and convert it to condos, renters living there can enjoy up to $25,000 off the price of buying the unit, just because they already live there.

"It's an underground real estate market in Tucson," said Dino Paone, president of Paone Mortgage Corp. "There are people that look at an apartment complex and rent a unit on speculation that it might be converted soon."

Caroline Auza, a broker and owner of OnSite Realty, said there's no way to document how often people rent in anticipation of a conversion, but her "best guess" is about 5 percent of the condo market.

The experts say there are many ways to learn about an upcoming conversion, such as talking to a construction worker doing a pre-conversion upgrade project.

Savvy renters-turned-buyers scour the Assessor's Office to see if an apartment complex was sold recently, talk to apartment tenants or drive around to see if major improvements are being done on a complex, the experts said.

Some would-be buyers will rent a unit, then sublease it while waiting for the complex to be converted, Paone said.

If they sell a unit rather than live in it, the market is working in their favor right now.

"The condo market is going very well here in Tucson," Auza said. "Prices are escalating, and tenants have a great opportunity."

The benefit of buying as a renter is that tenants get first right of refusal, and they get a discount if they decide to buy, said Auza whose company specializes in condo conversions and site sales.

"We like to sell to tenants," Auza said.

The reason for the discount: Those selling the units "don't have to do anything," Paone said. "We don't have to pay Realtor commission; we don't have to find buyers."

About 15 percent to 20 percent of apartment tenants end up buying their units, Auza said. After tenants are given the option, Auza said, she has had no problem selling the rest of the units.

Those taking advantage of the prices and shorter lines are primarily first-time home buyers or those making second-home investments. Investors also keep an eye out.

James Servoss decided to rent at Pinnacle Canyon, near Sunrise Drive and Kolb Road, to get an insider's opportunity.

Prices for the Pinnacle Canyon condos have not been released, but Servoss, an agent for Long Realty, said he plans to buy — and he has been renting for three months to do so.

"I want to live in north Tucson, but I can't afford to buy," Servoss said. "This is something in my price range."

Servoss said his main motivation to rent was that he wouldn't be stuck on a waiting list, and he isn't sure how much of a discount he'll get.

"I did it because our market is so hot, and for me it was the only way to get into the unit I wanted," Servoss said.

Renting to buy happened more frequently at the height of the market when people wanted to just "get in," Paone said.

"The market really hasn't cooled," he said. "People are still buying at record numbers, but you don't have people sleeping outside waiting to buy a condo like they did in 2005. Four months ago, there was no shame."

Auza said that last March, people started lining up outside her office a day before 120 units in Tierra Catalina, at Skyline Drive and Campbell Avenue, went on sale, many camping overnight. All 120 units were sold in three hours.

She now has a waiting list of 300 to 400 people wanting condo units in the northern part of the Tucson metro area.

The Catalina Foothills, Oro Valley and the area around Ina Road are the primary places where apartments are being converted, Paone said.

The attractions: good location, resort-style living, nice views and the price. Single-family-home values have priced out a lot of potential buyers, Auza said.

"Just about every apartment complex in the north part of town is being converted," Auza said. "The price is so much better than a single-family residence."

"If you are already renting a unit and you have the opportunity to buy one, it's almost crazy not to," Paone said.

● Investor buyouts of apartment complexes have forced an 82-year-old woman to move twice. All she wants is someplace to stay put.