All Forum Posts by: Harriet Baldwin

Definitely ask a professional for advice, and make sure that professional is familiar with the relevant departments in the town where the property is located.

We don't currently have any LI properties, but we have over the years...I recall one example from Town of Oyster Bay with a longstanding but unofficial conversion from SFH to 3 unit - in a zone where multi was allowed. This became an issue when the property was sold - what seems "okay" for the prior owner may not fly after a sale.

A different example, in the Town of Brookhaven for repairs required post-rental inspection, we did much better with an expediter and an attorney than with an attorney alone (this was not for multi-unit conversion).  

Sometimes the closing date is such that the first Section 8 payment after closing goes to the old (selling) landlord - make sure you remind your attorney and have an agreement and/or escrow in place so you're not chasing the old landlord for your Section 8 rent.  

In our area, Section 8 processes payments on the 15th of the prior month for issue on the 1st; any changes made after the 15th are not reflected until the payment 6 weeks later, and Section 8 does not "take back" money from one landlord to issue it to the next landlord (it can re-issue funds that go to a closed bank account, ask me how I know lol).  It would be easy, if you close your purchase on the 1st of the month, to have the old landlord get not just 1 but 2 months of your Section 8 rent if you aren't careful.  If you are careful, it's straight forward to get that all yourself!

I suggest you get the change of owner paperwork from Section 8 in advance of closing, so you know exactly what you will need to provide and are able to get it to Section 8 ASAP.

Thanks for the link @Michael Temple. Two thoughts - 

1-Corollary to what @Michael Temple, @Bjorn Ahlblad and @John Underwood have said - WSJ piece doesn't address this, but it seems likely that in an economic downturn, the rental market could to see more turnover of tenants.  I agree that demand is likely to stay solid at the middle & bottom of the rental market and that demand at the top of the rental market will probably soften (perhaps dramatically, in select markets).  But even the middle & bottom of the rental market are likely to see shorter tenancies and/or more frequent early lease exits - so, slightly higher vacancy rates and/or turnover costs, even if demand is strong.

2-Once upon a time (25+ years ago) I worked for a top Wall Street analyst who followed regional banks.  I learned that the recession always comes eventually, but that the banks mess up a different thing each cycle - that so far, the banks haven't messed up the same thing two times in a row.  So the next recession is unlikely to be lead by or dominated by housing. Not that housing won't suffer, but it is unlikely to be the center of the pain.  As always, past performance is no indicator of future returns lol.

Aside - that WSJ graph on homeownership makes the 69% peak in 2004 look like the outlier, and the current 64% rate more typical over the long run.  Might have to go online and find pre-1980 figures to see what longer ago looked like...in my spare time lol.

@Daniel Levin could you clarify?  I'm going to type away making a bunch of assumptions lol.  

I am not an electrician.  But I've helped do lots of paperwork and field visits with our electricians, electrical inspectors, and utilities...which means I know just enough to be dangerous!  Check your plan with your local inspector, not with me.

Electrical systems are unique for each unit; usually there are many choices of how to go about separating services, especially if you are doing it sequentially instead of all at once.  If you're lucky, there are already separate breakers boxes and no overlaps.

Do a search to learn about sub-metering, that may cost less and get you to direct billing a lot faster.

If you want separate services (not sub meters) - then, in many cases, going from units A&B on meter 1 and units C&D on meter 2, to (assuming you are in unit B) unit B on meter 1 and units A-C-D on meter 2 isn't any more of a hassle than doing it so unit A is by itself on meter 1 and B-C-D are on meter 2.  If you can do that instead, unit A is paying directly way earlier.

Around here going from 2 units to 3 units on a given meter would likely require a new entrance cable and shutoff or breaker panel, unless that meter has a lot of unused amperage.  You may find it easier in the long run to add a service now for your unit - then you'd have 3 active meters, one for A, one for B, and one for C&D.  If you go in this direction, it is often easiest to prepare now for your eventual 4 meters (or 5, if you need a house meter).  

Whatever you do, stay safe!

"Accounting" is simple - journal entry.

Tax records, more complicated.  Check with your tax advisor (I am not one).  Personally, I have in the past written a check to "Mr. Painter Friend or cash", gone to my bank with Mr. Painter Friend, cashed said check and handed cash to Mr. Painter Friend.  I have managed to avoid this for a while (contractors have gotten more comfortable paying a check cashing fee at my bank, apparently).  ianal or an accountant, but you'll want Mr. Painter Friend's tax ID on a W9 to be totally compliant.  If it was a small amount, you may choose to be less punctilious.

For craiglist items, a money order may be the way to go.  If literally "cash only", get a receipt from the seller and/or take a picture of the cash laid out next to the item you are purchasing.

If it's not too late, why not start with a separate meter on one of the rentals?  That gets you to getting tenants to pay on their own sooner than separating off the owner's unit.

It may vary by jurisdiction, but sometimes if you're the owner, the regulations are either more lenient or less enforced - if this applies in your area, @Matthew Kimber have you considered living in the basement unit & renting out the upstairs instead?  Obviously you'd still want to make sure it was safe in the basement.

This is a good example of why it's ideal to check into such issues before closing on the property.  But hey, we've all been there, asking important questions *after* closing.

@Frank Chin, @David Edwards and @Nik Moushon all raise good points.  In addition, there are requirements in our area for how the basement egress windows are accessed - basically, to be an acceptable egress there are a bunch of requirements, not just size of window/exit.  Nothing a local architect or possibly engineer can't deal with - depending on the existing structure, it may be a simple fix or it could get complicated and expensive.  Basement conversions have many requirements, egress may just be the beginning.

We were in a similar situation (but not owner occupied).  We had our contractor write up a report - since yours says the roof is good for 5 years, that should do it.  If not, change insurance companies.

If it is a single tax lot with multiple SFH's, you don't need an HOA or an easement imo.

What @Nathan Gesner said.  

In addition, what do your leases say about individual SFH's use of the land? You can spell out tenant access items (private yard, shared use of driveway, designated parking for said SFH) in the leases.

Is your PM looking to put an A tenant in a C property or similar mismatch? That would be another explanation for lengthy turnover lags.