All Forum Posts by: Jason Lee

Not quite clear what you're asking. What do you mean by "party asking to sell will not pay" you anything?

If the shares were gifted to you, then not sure how you can avoid the cap gains. You should speak to an accountant about the tax consequences 

Rents are at their historic peak right now so if you're not going to cash flow with vacancy (you will have some vacancy) then you can expect it to be worse when the rental market softens and rents dip. Meanwhile the sales market is pretty hot and inventory is way down (about 25% YOY for condos). Given the info you provided, I would probably sell now and take advantage of the cap gains exclusion.

Condos can be attractive because of the simplicity as you mentioned. Most of my landlord clients own condos. Most own just one or two but I have a good number that own many units. It's very easy for them because they don't really require any PM and if it's NYC it's mostly A/B+ class tenants.

You have to look at the bylaws, and before you purchase your attorney will get to read the board minutes and look at the financial statements. In general, I would be looking at larger buildings with many units, and low common charges and taxes for economies of scale. I would stay away from smaller buildings, even if they have tax abatements, because unexpected capex can be crippling among fewer owners, and smaller buildings can more easily fall out of Fannie Mae compliance.

@Don Konipol No, that's not the case. No one converts to co-op now, only condos.

@Zalman Ives This is going to be very difficult, if not impossible. Under the new rent laws from 2019 you'd need 51% of the tenants to buy into the conversion plan. It used to be 15% and that was difficult, and typically achieved through steep discounts or buyouts of protected tenants. The 51% threshold will not leave enough meat on the bone.

We use On-site.com. It's $20.

I always recommend landlords charge the current fair market rate rent, whether it's low or high. If the 16% increase brings the rent in line with market rate then that's what you should be getting. Being a good tenant doesn't mean they should get a discount, just like being a good landlord doesn't mean you can charge more. The tenant will look around and quickly realize the costs and hassle to find another rental don't make sense. It's funny, most of my landlord clients pretty easily agree to rent reductions but have a difficult time agreeing to big rent increases. If you're not good at this or don't have the stomach for it, then find an experienced realtor to lease your unit going forward and they will handle the renewals. I just got a tenant to agree to a 31% increase today. This is par for the course now that covid leases are ending.

Lastly, if your turnover is in the winter then I would try to get the tenants to sign a new lease length that brings the turnover to the summer. You'll have more leverage and it will be a lot easier to negotiate renewals when the rental market is typically at it's peak.

I represent around 70 condo landlords in NYC. Many of them, like you, used to live in the condo as their primary residence and converted them to investment properties when they traded up or moved out of state. Many of them also used to try to find tenants on their own with varying success. For some it worked out fine, and for other it was a disaster. Most did not come close to properly verifying the tenants, for income, prior rental history, or background and credit, and many have no idea what the rent laws are in NY. They don't know what they don't know, and that can cause problems. On top of that the rental market changes very quickly here. Prices, inventory, concessions, who pays the fee... these tend to shift very quickly and most condo landlords can't keep up. If it's between a DIY landlord or an experienced landlord's agent (who's intimately familiar with what's going on in the market, meets with a thousand tenants each year, and reviews a couple hundred applications each year), I would strongly recommend the experienced agent. They will attract better tenants, property vet them, and probably net you more rent (including at renewal time).

Hmmm. I would recommend the exact opposite. I would only buy in a large condo complex where there are economies of scale. What happens in a 4 unit condo and one or two of the unit owners don't pay the HOA. What happens when it's time for major capex and there are only a few unit owners. Also, keep in mind if anyone owns more than half the units in the condo it becomes non-warrantable. Then financing options become more limited and prices tend to crater.

Owning a condo in NYC can be completely passive with no PM. Find a condo with 24 doorman, a live in super, a staff of handymen and porters, and a good realtor, and it can be entirely passive. Most of my landlord clients I have never met in person, most live out of state and haven't visited their properties in years, and most have never communicated directly with their tenants.

Maybe 3-4 of my landlord clients have somewhat of a passion for real estate, even then, they don't want to read books about REI or come on forums and learn about all the different ways to invest in real estate. They are busy doing other things, have other investments, and have an extra 500K to $5mm in cash and want to own an NYC property.

Let's get a couple things straight here. Most NYC condos aren't "anti-landord" and I don't know any that try to prevent the landlord's ability to rent. I don't know of any condo in NYC where you can't rent out unlimited from day one. Condo boards typically only have one way to prevent a landlord from renting to a third party and that's to not grant their waiver of right of first refusal. In that case you still get to rent it at the same exact terms and at the same rent, except to the condo itself... and I've never seen that happen.