In view of real estate professionals who have worked on many conversion projects, a number of indicators the probability of a particular tenant group completing the difficult, lengthy task of buying and converting its building.

The National Consumer Cooperative Bank has a variety of criteria it considers in evaluating loan applications from tenant groups, according to Margarita Sweeney, head of management operations of the bank's real estate division.

Nevertheless, for John Hoskinson, a partner in the D.C.-based real estate firm of Hoskinson and Davis, there are only two basic factors: good business sense and luck.

"Good business judgment is something of an intangible," said Hoskinson. "We don't know what it is exactly. It's easy to define after the fact, but hard to define before."

In working with a dozen tenants associations contemplating the purchase and conversion of their rental properties, Hoskinson has found the attributes most indicative of a group's business intuition include:

* A realistic appraisal of risk and return.

* A common sense approach to decision making.

* A recognition of priorities.

* A community of interest, of most tenants have the same goals.

* Good, intelligent, hard-working people on the board of directors, and

* Clearly defined leadership.

"When they reach a decision," said Hoskinson, "they back it up and someone is clearly committed to carrying it out."

The qualities needed of tenant leaders can change over time, according to Peg Stone, the former chairman of the General Scott Tenants Association. That group recently completed a 2 1/2-year effort to purchase and convert its Northwest Washington building.

"It takes different skills to organize -- which I have -- from the skills to do the renovation," she said. "I stepped down and let somebody else do the renovation and handle the details.

"The woman heading up the tenants association is real detail-oriented. She's more the moving-things-through-the-process type of person."

Another important part of a successful conversion is selecting competent advisers, a task that can be more difficult than many people might think, according to Hoskinson.

While a tenant group may talk with other associations a professional has worked with, this sometimes produces biased information.

"A conversion is such an intense experience," said Hoskinson. "It's almost the way it is between a psychiatrist and a patient. It's a relationship forged with so much emotion that it's not objective."

To obtain a more complete profile of a developer, for example, tenants should talk with lenders, subcontractors and architects who have dealt with that person.

A tenant group should know the limitations of its members' abilities. "There's nothing sensible about doing it yourself if you can get a good deal and let somebody else develop the project," Hoskinson said.

And tenant groups should be aware of how much jeopardy they are willing to accept. "Risking money does not guarantee success," Hoskinson commented.

The National Consumer Cooperative Bank looks carefully at the skills of tenants association board members that approach the bank for acquisition and rehab loans. The bank even requests copies of the board members' resumes, particularly for groups planning to manage their own projects.

This is done to measure the residents' ability levels, but also to estimate their willingness to learn any skills they lack.

All the bank's loan recipients must have an "education plan" for both current and future occupants, to teach them about co-op budgeting, members' responsibilities and preventive building maintenance.

The Co-Op Bank looks at a number of other criteria. If the tenant group has advisers or consultants, the bank checks on their prior experience with cooperatives and other types of housing projects.

The bank prefers tenant groups where there has been a history of substantial involvement by the building's residents, such as in negotiations with the landlord over a period of several years.

Tenant groups must show a willingness to risk some of their own money in the project. Before receiving any Co-Op Bank funds, the residents must incorporate their association and pay the legal fees for that on their own.

The bank investigates the building's neighborhood and has a standard appraisal done to see if the area is declining or rising and to seek evidence of supportive community activity.

The capacity of current residents to pay a higher housing bills is considered, along with the existence of any assumable low-interest financing on the building. (In the conversion to a co-op, tenant groups can sometimes take over an existing mortgage, since the building's acquisition and conversion is financed through a "blanket mortgage," one loan on the entire property.)

After providing a mortgage, the bank continues to monitor each tenant group carefully.

Since making its first real estate loan two years ago, the Co-Op Bank has granted more than $94 million to groups converting their properties or rehabing existing structures. Of the 94 loans made so far, only one has gone into default, Sweeney reported. The bank is now working with that tenant group to resolve the problem.

Low-income groups trying to buy and convert their property often are much more motivated than middle and upper income tenants associations, according to Sweeney. "There's an attitude of, 'It's my home and I'm not interested in moving.'

"Higher income groups often have many people who live in a building for convenience and status, rather than just a place to live.

"Money is a bigger issue for low-income people. There seems to be much more solidarity. There's that cohesiveness because there's no alternative," she added.

Regardless of a group's motivation and skills, good fortune is significant, too, Hoskinson said. "Tenant deals in this city have been no more or less successful than developer deals," he declared. less successful than developer deals," he declared. or tenants.

"Luck is every bit as important as good business judgment."