All Forum Posts by: Jared W Smith

Quote from @Gino Barbaro:

@Jared W Smith

You're putting it mildly. It's a cluster, with months of uncertainty, and in my case 10s of thousands of dollars, because we had to upgrade the septic to accommodate the fourth unit, as if it wasn't working already.

I believe you 100%. Time lost is the most annoying aspect with projects like this. You could lose months or years and still not resolve the problem or realize you cannot do what you wanted. 

I've had some nasty stories. One where the lady was promised by seller and seller's agent that it could be converted legally. She closed and hired me for the conversion process and found out the Zoning wouldn't allow it at all. Then I had another one where the buyer brought as is under the impression that legalizing would be easy and found out it was not ever allowed and a portion of the structure had to be demolished because it was built horribly and a hazard as built.  

ALWAYS verify the unit count and Certificate of Occupancy with the AHJ (Authority having Jurisdiction) BEFORE purchase. No offense to realtors but how a property is set up or length of time it has been rented for has no bearing on the legality of the property records on file if they differ. CO will always trump that. @Karin Recalde

I've had to legalize circumstances you and @Gino Barbaro have stated. It gets messy since the property value is greatly diminished based on the actual unit count. It's usually a tall order to legalize it up to the unit count you want. As Gino said, find a local Architect to take this on. All the best.  

Quote from @Michael Belz:

The SROs are located in Suffern NY

This is part of my coverage area. If you’re looking to retain professional services to get the feasibility and zoning/conversion processes figured out, please reach out. All the best 

Quote from @Michael Belz:

I’m currently under contract on a mixed-use property that is zoned for CB (Commercial Business). The ground floor is occupied by a commercial restaurant, and the upper floor is designated as SRO (Single Room Occupancy) under a pre-existing non-conforming use. Additionally, the property has a pre-existing designation as an Artist Dwelling.

I’m looking for insights on the following:

1. What defines an Artist Dwelling? – Is it simply an apartment with a studio, or is it a designation that requires a formal process, such as registering as an artist?
2. Is it possible to convert the SRO units into Artist Dwelling apartments? – I’m exploring whether I can remove the SRO designation and replace it with Artist Dwellings, but I’m unsure of the legal requirements or how this conversion works.

If anyone has clarity on the definition of Artist Dwellings or proven strategies for making this type of conversion, I would greatly appreciate your input.

Thanks in advance for any insights!

SROs once populated much of NYC and has since been phased out through renovation, demolition and updates to properties. It's not liked by most Building Departments because it puts substantially more occupants in a building and each with locked individual quarters and highly taken advantage by slumlords creating fire hazards. Therefore working with and renovating SROs are typically deeply complex project and a great extent of due diligence is needed before purchasing. In NYC, there's what is called a Letter of No Harassment which must be on record from tenants since often the owner wants to kick out inhabitants to renovate and boost rent and their profit. This is highly regulated. You're in for a long ride to get it renovated with the SROs and non-conformance issues.  
Is the property in NYC or Upstate?   

Quote from @Michael K.:

Hi BP folks,

Does anyone have recommendations for a local architect who 1) works with multifamily and 2) works with rehabs?

I'm looking to do a gut rehab on a 2-3 unit property in the next 6-12 months and am in the process of selecting my team. Thank you in advance for any recommendations you can share!

I agree with others. As an Architect, to engage on a project there needs to be a property already selected or in the process of purchase. 

I'm going to DM you. 

Quote from @Adonis Williams:

Hey BiggerPockets Community ! 

I have about $180k in equity in one of my investment properties and I have a nice amount of cash on hand and I have an idea that I would like your thoughts on.  I want to build a home on a plot of land and I need your advice to confirm the process.

1. Find a purchase plot of land 

2. Get approved for construction loan (This is normally a loan at an 80% LTV, right)

3. Hire land use attorney to confirm what home type I can build 

4. Obtain permits and approval from neighbors to build 

5.Hire GC to build home 

6. Obtain certificate of occupancy to sell home (from county or city)

7. Refi loan from construction to owner occupied loan (preferably conventional)

8. Sell home on MLS

My logic is that that price at which I will construct the home will be considerably less than the price at which I will sell, thereby giving me nice profit margin . I plan to do this in D.C or in a suburb of D.C. Is my logic/approach here correct?

NOTE: Typically you won't get #2 without #4 being completed prior. Traditional Construction loans want to know in detail what you are building and pinpoint the value of it when it is complete. Usually requiring a full set of plans, details and specification of the build. Some want it approved by the AHJ (Authority having Jurisdiction). This is the soft cost of building which you/someone will likely have to front before the loan is approved.  

Hello All! 

I am researching a market to jump in and purchase some rental properties for buy and hold out of state. This is likely to be an area I would like to stay in long term and build a portfolio.

I did the @Dave Meyer live pro workshop to find a market and have the following insight. (This is in the Southeast part of the country.)

Market Fundamentals

Population Growth: 1.8%
Median Household Income: $77,573
Wage/Income Growth: 7.3%
Unemployment Rate: 4.2%

Job Growth: 2.7% (slight decline last 2 yrs)
Home Ownership Rate: 59%
Median Age:  35

Employers are stables between Health, Tech., National Retailers & Shipping Companies, local schools and Banking

Crime is 1.06 Violent Crimes & 9.82 for Property Crimes

Schools are on average 6/7 out of 10. 

Landlord Friendly state and locale. 

Housing Market Conditions

Median Sale Price: $395k
• YoY Price Growth: 8.7%
• 5-Year Price Growth: 50%
Housing Inventory: Less than 7,000- low (Below pre-pandemic levels)
Property Tax Rate: 0.42
Average Insurance: $1,680

Median Rent: $1,895 (single-family house)
• YoY Rent Growth: 1%
• 5-Year Rent Growth: ???
Rent-to-Income Ratio: 29% 
Rent-to-Price Ratio: 0.48 

Looking at single family and possibly duplexes. Would like multi-family (3-4 units) but not many in this locale. As I expected this is a very different market than where I live (in NY). I feel pretty good about this market as the market data shows it being solid. I am even more comfortable having several family members in the area which I visited annually throughout my childhood/adolescents and every couple years now as an adult. This gives me some boots on the ground. I don't want to perseverate too much and allow analysis paralysis to prevent me from jumping in. Having family there and a pretty good market, time to pull the trigger. 

Comments? Thoughts? Any tips or advice welcome. Thanks!   

Quote from @Devin James:

Most residential developers specialize in one of three areas:
- Entitlements & Permitting (Paper Lots)
- Horizontal Development (Finished Lots)
- Vertical Development (Finished Homes)

Some developers focus on multiple, depending on the market, their risk tolerance, and other factors.

Historically, we've focused on entitlements and permitting, with some horizontal development.

Now, we have a few projects where we plan to do all three.

What do you specialize in?

Hello!

I gaining traction in the Architecture portion of development for all three areas you mentioned however, typically on lots that are already established and/or infill development in urban landscapes. I have been going through entitlements for clients for the last 5-6 yrs to allow substantial/major renovations and new developments. Licensed in NY & CT currently. Looking to expand into the Carolinas (NC & SC) for REI and developments soon.

The goal is to move into adding the financial side of Development to do my own projects since I am already accustomed to a lot of the other tasks necessary.  

Quote from @John Warren:

@Ali Farhat adding a basement unit starts with a great architect and a great GC. It is an expensive project, and probably only pencils if you have a 6 figure budget... this isn't what most investors want to hear though. You will quickly learn about footings, water service replacement, electrical load calculations, and a bunch of things you don't know about. 

This topic comes up a decent amount here in Chicago because of the amount of grandfathered in "non-conforming" units. The amount it costs to "do it right" normally makes new garden units cost prohibitive. 

This is the same advice I give, almost exactly, for people looking to do this type of renovation in the Tri-State area (NY, NJ & CT). It's a tall order to do it correctly and on record.