Converting Multi-family

[Bob Milen]

Hey all,

I currently own a 6 family in Astoria, NY. Currently, the apartments are setup in a 2br/1bth railroad style (think 5 really long rooms one after another). I have notice some owners across the street converting to 12 family. Most are split into a studio/1br combination. I asked a gentlman across the street who has 2 converted 12 family building on the block. He says, "DONT DO IT!" I'm not sure if he means well or just hiding something.

The upside: rent increase. value goes up based on rent multiple.
The downside: fixed cost to convert (fire stairs in the front), +1kitchen/+1bath, moving water pipes, gas lines,
time - can't kick people out and say "hey, im going to cut your apt in half" - need to be done when people mov out gradually, variable expense (heating oil/water bill/repairs), insurance, etc.

I need to obviously run the numbers but what are your thoughts? Does someone have an idea of tax implications of converting? Do i need a permit to move water/sewer/gas lines in the apt? is there a resource out there that would help in terms NYC legal/code?