All Forum Posts by: Bin Chen

I don't want to be the bearer of bad news but in good old tenant Haven NYC it can take a year to get tenants during normal times. Right now it's literally impossible. No evictions until Aug according to Cuomo. If he doesn't extend that date, then the courts will start going through the backlog of cases they haven't had. We've been trying to evict someone since last July and still have not gotten a court date. Once we get a court date tenants can come up with excuses to reschedule and push the date back further. 

good luck man

There's a lot of confusion on who pays right now. In the past it was usually the tenant that paid the commission but there was a new guidance that stated tenants cant pay more than 1 month rent 1 month security and 20$ application fee on lease execution. So according to the states guidance the landlords agent cannot make the tenant pay a commission. If the tenant hires you as a tenants agent then they can still pay you a commission. Now in practice it gets a little grey because the realtor boards are suing the state to try to get rid of this new rule so as of right now I believe it is not being enforced. Problem is I also heard that if the realtor boards lose the case a tenant is entitled to get their money back so some brokerages are already not allowing their landlords agents from collecting commissions from tenants. 

But this is still ny real estate you still see all sorts of crazy stuff happening

Hi, I'm looking to purchase chase my first mix use building. It's a new construction so I have no data to estimate the expenses. There's also a tax abatement for 8 yrs left on the property. I estimate the gross rent will be around 33k if it has no vacancy but I have no idea how to find the expenses to calculate cap rates. Does any one have any experience on where I should look to find out? Do you value it based off property tax after abatement? Where can I find out utilities cost. Do buildings require waste management plans or does the city still take garage? Thanks for the information in advance.

Hi everyone,

I am fairly comfortable with small 2-4 family multi fam houses but I would love to scale up. I am considering a development deal but am not entirely sure how to approach it. Any advise would be appreciated.

The deal:
A lot 50'*100' in NYC with a buildable SF of 11,000 not including the cellar and deductions. 

From that we can get about 14 2BR units 780ish sf which rent for about $2400 each and 7 parking spots for around $250 a month.

Total income $404,950

Now I need to do some more research about the property tax. I looked for a similar property to check what the property taxes are like and they're only paying 2.5k a year because of a tax deduction

 Does anyone know where I can find property tax numbers without the reductions?

The land would cost about 1.3m

the construction rough estimate I was told $250 a sf. So 11,000 sf+ 2500 sf cellar *250 = 3.375m + pavement and yard work let's just say 3.5m

I estimate 2 years for plan approvals and construction.

does that seem right? Anyone have experience with this?

Now for funding I can sell a property for 1.3m and 1031 exchange it for the lane to avoid cap gains.

I have another property that I can sell for 2.1 m - 300k I still owe on it to fund part of the construction but I would need to take a loan for the rest. Also I would need to find a way to get a loan to finish the project. Are construction loans high rate? I wouldn't be able to defer taxes for selling the house to use for construction right?

i would be losing the 2 properties (7 units) about 150k noi and still need to get a 1.7m loan.

is something like this even worth it?

On the other hand I have another option right now to buy a 2 family for 1m 20% down cash flow 700 a month after expenses. Good location and will likely appreciate. I know for a fact I'll make money here. 

Any advice, input, even pointing me in a direction to do more research would be appreciated.

thank you in advance

I have partners so I am not the sole proprietor. We have a separate ein. The thing about sole proprietor is a little weird to me. Basically the LLC is to keep your asset separate from you and each other. If you ever get sued and the lawyers try to come after you they will try to do what they call piercing the corporate veil. Which is basically to illegitimize the LLC and link the assets to you. That way they can sue you personally instead of just the LLC. What I heard is if you're the sole proprietor it's much easier for them to do that but again it's judged on a case by case basis.

We used the property address. 

We used a service to set up the LLC and they handled everything for us. Didn't want to make any mistakes since you're doing this for protection and if there's and error your protection can go out the window.

I'm actually not sure about that. I was advised to publish right away so I just published at formation. I hear it's a way to make your LLC seem more legitimate. Making it seem more like a buisness entity instead of just a holdings entity. Personally I think it's more about if you get sued or not. If you get sued before you publish they would have an easier time linking you directly to the LLC nullifying the protection

This is accurate. The banks don't want you to do it since they're giving you the mortgage and if you move the property to an LLC then you don't technically own the property anymore. That's where the protection comes in since if the LLC is set up and run correctly you are separate from the LLC. They have a clause in the mortgage that gives them the right to have you pay the mortgage back in full if you do this but it's widely known that banks don't enforce that clause.

As for llcs not having mortgages, that may not always be the case since some llcs have commercial financing instead of a mortgage. That's actually the legit way to do it but yeah a lot of ppl just do what your lawyer is advising

https://zola.planning.nyc.gov/...

you mean this one?

How much of a difference does a cellar vs basement make on the appraisal?

For example a house has 2 floors and a basement, each level is 600 sf, the county records will show that the house is 1,800 sf.

A house with 2 floors and a cellar, each level is 600 sf, the county records will show that the house is 1,200 sf. 

Technically the houses are the same size but the cellar just doesn't count towards the square footage. Does this make a huge difference in value when the house is appraised? 

Thank you in advance.  

My experience with HELOC is it has to be your primary residence. You already went through the credit union and they approved you for it? If this is the case then that would be your best option. Getting a mortgage from a portfolio lender would require you to take the amount upfront you will be paying for the interest of the whole loan right away. I also believe the closing cost is much higher. The reason they cap how much they will lend is because they need to make sure you can pay back the amount 1.1m is actually a lot if the rent is 6.3k. They usually look for a 1.25 debt service ratio. I'm guessing your mortgage payment for a 1.1m loan is about 6k a month. If you tapped more and you don't start making money with it immediately, you can be in big trouble. HELOC also allows you to pay interest only which is great in case your project gets delayed.

I had a HELOC in the past when I owned a 2 family house but I have been using portfolio lenders now because I don't qualify anymore. I've only tried banks but they require it to be 1-2 family and also your primary residence. How I approach buying is, I talk to the lender to see how much they can lend me for the property, then I got to the seller and offer a cash offer. Once I get the offer accepted I close on the refinance and then close on the new property. This way I avoid as much interest as possible. If you have a HELOC you can just write the check when you're ready to close. It's so much better.