All Forum Posts by: Ericka G.

I received an unsolicited offer to buy an apt that I own in upper manhattan (below 125th street). My unit wasn't on the market - a broker who lives in my bldg approached me with deal.  I change my mind daily on whether to sell or not.  Pls take a look at the numbers and let me know what you think.

My Purchase Price: $100k in 2005.  2bd/1ba,1000sqft unit, Doorman bldg across from park, short walk to to 2/3, Metro North, 4/5/6.  laundry, gated parking, courtyard. Former HDFC/HPD Bldg zoned for middle income built in late 90s. I love the apt and location.

Current mortgage balance: $52k.  Total monthly expenses: ~$1600 

Rent rev: $2500   (net: $900/mos)

Current offer: $400k, no inspection contingency.  The buyer has been verified.  

The dilemma:  HDFC/HPD income restrictions keep the prices low (for Manhattan) in my bldg. Those income caps will expire in 6-13 years.  

The co-op does NOT allow subletting, but I've had a grudging "family/roommate" pass since 2007. A lawyer sent me a cease letter in 2015 but I argued and they backed down quickly.  My cousin/roomie/tenant is moving out in August - not sure if I'll be able to move someone else in without trouble.  The seller I purchased from had $40k in co-op fines for subletting her place.

I could sell now and profit, but I sense that if I hold out until the income restrictions expire, the unit could be worth MUCH more (~$1mil wishful thinking?). I have a couple of solid deals pending where the cash would be useful.  

Do you think it is worth the risk to try to move someone else in/potential legal action/hold OR should I cash out now?  When I run the numbers, it seems like I should HOLD but it is hard to quantify all the variables that could go wrong IF the co-op board decides to come after me.  The stress of potentially having to duck/fight them for another 13 yrs makes me lean towards selling. Thoughts?

@Tyler Hill  I did something similar 9 years ago (without refinancing) and keeping my first home as a rental was one of the best decisions I've ever made.  If you can figure out a way to keep it and the numbers work out, I'd do that because you own in a highly desirable area.  

I started out making only ~$250/mos profit when I turned my primary into a rental and currently make ~$900/mos profit on the property.  I expect to raise the rent about $100/mos in Aug if I keep the place.  I have an offer to buy the place that I am strongly considering that will net me more than double what I would have earned if I sold back when I first started renting the place out.

Can you explain a bit more about why you are choosing to re-finance the current house?  I'm guessing that you are doing that to pull some equity out to afford the next house?  

If you aren't pulling out equity to buy the next house and/or aren't saving a ton on monthly payments, I'd say skip the refinance and all of its fees. Also, since you lived in the place, I don't think you need a property manager - you'll know the nuances of the house better than any stranger.  Do your own credit/reference check and keep a local handyman on speed dial if you aren't handy yourself... should save you some money.  Good luck!

@Richard Ball Thank you!  I will fill this out and try it at a local bank, in person.  I'll let you guys know how it goes.

@Steve Burt Thanks for the tip! I just sent a text to 2 of the brokers I've been working with to see if they have any HML contacts. I literally had no clue where to start on that one, so this was a big help.

I tried to pull equity out of one of our other properties, which I purchased before getting married. It appraised with plenty of equity but my bank denied me because I don't have a traditional 9 to 5pm.  I'm kicking myself for not setting up a line of credit before leaving my job, but didn't realize my bank wouldn't let me borrow against my own property without a "job" even though I've never missed a payment in 11 years and have the same amount of cash that I'm trying to borrow in my savings acct - just don't want to use my money.  That is a whole different rant.  I hate big banks.

@Michaela G.  I hear you, but in the city where we own, there are no rules specific to this matter like the ones you note...we passed our occupancy inspection with flying colors.   I just re-read all 314 pages of the zoning ordinance to double-check.  We got lucky by buying in a very airline employee friendly community.  If they change the rules, we'd be grandfathered in.

That said, I'm really glad you raised this point - I will check the rules in ATL carefully (specifically East Point and College Park) before we pull the trigger on opening a crash pad here.  

@Rick H.  Can you share some names/companies that deal in hard money loans?  Trying to get up to speed on this type of financing.  Thx!

@Chris Mason Ok, will check into that.  Also, I see there are a ton of other posts on hard money/private lending, so I'm digging into that on other forums...sorry for the repetitive questions.

@Scott Mclaren  Thanks for the tip! I will look into a hard money loan...I didn't realize 12% was the range...what I'd read said more like 30%.  I guess I'm not sure where to start/what organizations to approach for hard money loans - I'm guessing a smaller financial institution?  I looked into cashing out one of my IRAs but the fees scared me off...seems like there has to be a better way.

@Michaela G.  There is a wide range of crash pad set ups...we do not run ours like a rooming house - some landlords overfill the houses in what are called a "hot bed" crash pads.  We have 1-3 people per bedroom MAX (several tenants pay more to have their own room, less to share) and thus don't have legal issues from a zoning perspective in this city, which is full of airline employees.  But that is a good point - I will have to check the laws in ATL before we make our first purchase here.  Ours are set up like a home away from home for flight crews on reserve for 6 mos-2years, which is why we have a waiting list.