Brooklyn Multi family rent control question.

[John Hickey]

Found an interesting deal in Bushwick. Need to do some digging to see if it's a deal. 8 family 1.7m. Building has been under 7A management for years. rent roll is 6k per month. I know the taxes are 8k. No cash cow. The building is Brick, in good shape, 6k sf. The rest of the expenses haven't been made available but I'm talking with the 7A soon so that should be cleared up. I have the DHSCR with all rents listed. None are over 1000. Most are around 500 one apt is 208. I'd be looking to raise the rents closer to market. I pulled the last 25 years of registrations and they show rents of 1350-1500 within the last ten years and then rents dropping down to the current rates while under the 7A. I'm pretty familiar with Bushwick rents. I don't have any units there but I'm close by and I keep track of rents near me. I would say the apartments would rent for around 2500 each if they were free market. I'm not too familiar with rent control, so I'm looking for anyone that has dealt with preferential rent/legal to chime in. I'm sure I'll need a lawyer that's dealt with rent control(my lawyer is clueless to RC) so if anyone has one I'd love to hear.

[Remo F.]

From what I remember rent control is the least ideal situation for an investor with 6 units and above. It's worse than rent stabilized buildings as tenants in rent controlled buildings can challenge a rent increase which I believe the max rent increase is 7.5% EVERY 2 years. It could take decades for the building to become a cash cow.

I may be wrong but I've looked into purchasing these kind of buildings myself and after talking with a couple of landlords in Brooklyn who are in their late 60's 70's I decided to stay clear from this type.

Both landlords actually own rent controlled building and advised me to stay well clear of rent controlled buildings. They also mentioned many of the rent controlled apartments were passed down to family members due to the cheap rent and they still had a problem trying to raise rent and evicting tenants in this situation.

If you have some patience then you may want to entertain rent stabilized buildings but those too can take a while to get the rent going but not as long as rent controlled

That's my 2cents, hope it helps