All Forum Posts by: Barry Sanders

Is there anyone that invests in New York City multifamily that has successfully de-stabilized/deregulated a rent stabilized multifamily apartment building in New York since the 2019 changes to rent regulations? 

It seems that the only way to destabilize/deregulate a rent stabilized building at this point is to do a condo or co-op conversion. I have been fortunate enough to come up on a potential off market deal which would work for condo conversion (i.e. already over 50% vacant for close to a decade).

Is my understanding that only a condo conversion would work correct? Are there other ways to get the units to market rate with out doing a condo or co-op conversion?

For those that have completed a condo conversion (architects, investor, attorney etc.) in New York (whether a rent stabilized building or free market) is there anything that I should be looking out for as I analyze this deal?

Hi Charles, Welcome to BP, this is a great community online for learning, there are also many events across NYC where you can meet active investors. Good luck on your journey. Feel free to reach out if you ever want to connect or brainstorm some ideas

Hi Alex, you will have a harder time cash flowing on zero down but im sure its possible if you buy right. 

First educational thing you need to learn is what it really means to cashflow. Its not just covering your mortgage payments.

If you can get off market listings and buy underpriced that is your best bet but if you have few connections and havent yet built a network you will need to buy MLS market deals.

First action step i recommend you do is talk to a lender and see what max loan size you qualify for in the single family and duplex property type. And how much money you need for closing costs. 

Once you do that find a house for that price or less where you can at very minimum cover mortgage and utility expenses with your rents while living there for free

You may have to be creative ie: using your living room, attic, etc. as your bedroom to make it work but depends on you and what you are comfortable with. I only say these things because it has worked for others

Sounds like you will end up at the bank in 2 years anyway. If you can get a bank loan now with long term at a low fixed rate youll be better off. 

Would you be open to partnering with someone and buying them out later? 

Or letting the owner keep a portion if the equity? ie: bank loan with owner financing on top or sharing the profits from rents in exchange for a lower purchase price 

Thanks for the clarification Chase. Do you include rental income as well as other income in your GPI or only Rental income?

Have been building out some financial models and want to make sure Im doing this correctly. When formating your Profit and loss statements do you include an allowance from gross potential rents for all three of the following or just 1, if so which ones? 

Physical vacancy

Economic vacancy 

Loss to lease

Are these allowances  applied to rent income + other income or only rent income to determine effective rental income/operating income? 

Thanks in advance

If you live in the property do it yourself as these arent just your tenants they are your neighbors. If youre a hands off owner or have a large portfolio then get an agent

Focus on family, friends and referrals first. That will build the skill needed to make strangers comfortable investing with you. You will also need to "court" strangers for a longer time before they actually invest.

People invest in the syndicator/ sponsor(You) not the deal. You're more so displaying your character and competence, if they've known you for a while they may already know how competent you are. If they are a stranger you need a track record or other way to show this  ie: experience partners

There are a lot of barriers to being a new syndicator, even more so when you are limited on your own personal capital.

Attend networking events and find a partner. Spend time getting to know them before committing. During this time educate yourself so that you know what role in the team/ partnership would be best for you. and practice those skills

Just a heads up it may take a while to land your first deal, maybe 1+ years from when you start looking depending on you education level and partners experience.

If studios rent for 600 and 3 bedrooms rent for 1100 and you set your room rental between 400 - 600 the math is simple which makes more money. 

As far as attracting worse tenants - you have to screen all tenants whether its a room or apartment being rented

You have to know your market. In bigger cities this is very common and  one of the few options people have to finding affordable housing. Not everyone may be able to afford a studio or know 2 other people in town to rent an apartment with them. This doesnt make them low grade or undesireable. Look up co-living. Its a movement.