Rent controlled building

[Schneur Yecheilov]

Hi,

I found a great deal on a 6 unit building in Brooklyn NY. It is a rent controlled building for another 6 years, then the rent control falls off as well as the tax abatement. Its under the SIP Special Initiative Program.

I have a few questions:

1) Once the program ends, am I able to pick up the rent to whatever the market rates are at the time? are there any restrictions?

2) If the answer is yes and the tenant refuses or cannot pay the new rent, will I be able to evict them? and if yes how hard would that be?

3) If a tenant moves out before the program ends, when I put in a new tenant do they get the same rate as the previous tenant or can i pick them up? and if yes by how much?

4) While under the program am i able to Increase rent yearly? and if yes by how much %?

Thank you in advance.

[Mike Adams]

Originally posted by @Schneur Yecheilov:

Originally posted by @Mike Adams:

Are you a seasoned investor? If not, pass. NYC is not for the novice at heart.  There is no guarantee that the building will turn market and should you want to evict a tenant, it can take up to a year under normal circumstances; with COVID, it looks closer to 1.5 years+.

Unless you have really deep pockets, like Uncle Scrooge McDuck pockets, hard pass.

Once this program ends in 6 years, is it possible that the government can continue the program or would it be totally up to the landlord at that point?

The price is a steal for the property and location that’s why I’m very interested in this. 

Yes. Laws change as well as programs. There is zero guarantee that they will allow this to happen. With the way landlord / tenant regulations are going, I would bet that it will be revoked. They changed a lot of the laws in 2019, so that just shows you that they will do whatever they want to obtain votes and stay in office. Tenants want free water, utilities, rent, and now you may also be subject to provide the building with free Internet.

If it was such a deal and a steal; I assure you someone or some company with larger pockets would had bought it already.