All Forum Posts by: Michael Belz

It’s located in New York State, and I was informed (though I haven’t seen it in the auction contract) that all mortgages and taxes will be settled by the seller at closing. Attached is a copy of the auction description for your reference.

Title & Liens: Property is sold with title of record, free and clear of adverse liens or encumbrances at closing.

I am checking with the municipality to verify if there are any open violations. As for the mortgages, everything appears to be up to date.

Does anyone have experience purchasing a mixed-use property on an auction site sold "as is" with a quitclaim deed? I'm wondering if outstanding mortgages, taxes, or violations carry over.

The auction states that the title is free and clear of liens, but the contract only mentions a quitclaim deed without explicitly confirming a clear title. This is my first auction purchase, so any insights or advice from those familiar with this process would be appreciated.

The SROs are located in Suffern NY

I’m currently under contract on a mixed-use property that is zoned for CB (Commercial Business). The ground floor is occupied by a commercial restaurant, and the upper floor is designated as SRO (Single Room Occupancy) under a pre-existing non-conforming use. Additionally, the property has a pre-existing designation as an Artist Dwelling.

I’m looking for insights on the following:

1. What defines an Artist Dwelling? – Is it simply an apartment with a studio, or is it a designation that requires a formal process, such as registering as an artist?
2. Is it possible to convert the SRO units into Artist Dwelling apartments? – I’m exploring whether I can remove the SRO designation and replace it with Artist Dwellings, but I’m unsure of the legal requirements or how this conversion works.

If anyone has clarity on the definition of Artist Dwellings or proven strategies for making this type of conversion, I would greatly appreciate your input.

Thanks in advance for any insights!

 the purchase is 1million 

Hey all,

I’m currently looking at a mixed-use commercial property that includes some SRO (Single Room Occupancy) units, and I’m running into challenges with financing. From what I understand, banks tend to avoid financing properties with SRO units due to the perceived higher risk (inconsistent cash flow, transient tenants, zoning issues, etc.). Has anyone dealt with this before? Any insights on how to navigate this?

Additionally, I’ve secured seller financing for half of the purchase price, but I’ve been told this could complicate things further since banks typically prefer being in the first lien position. Is it true that this would make it harder for me to get a loan from a bank for the remaining balance?

Lastly, what’s a reasonable interest rate to offer the seller on their financing? I want to ensure it’s competitive but also makes sense for both sides. Any advice on what typical seller financing rates look like in the current market?

I’d appreciate any tips or personal experiences. Should I consider alternative financing (e.g., hard money lenders or bridge loans) or focus on getting a subordination agreement with the seller? Also, would making improvements to the property (e.g., converting SRO units to apartments) help with future refinancing?

Thanks in advance for your insights!

Thank you all for your comments and insights. I recently spoke with the town's zoning inspector, who confirmed that the building is in a GB (General Business) zone. The SRO units are likely grandfathered in, so converting them to multifamily isn’t allowed. However, the inspector mentioned that the 2nd and 3rd floors are labeled as "Artist Dwellings," though he wasn’t sure what that fully entails.

He suggested applying for a special permit to present the space as artist studios or dwellings, with the hope of eventually converting them into long-term rental (LTR) apartments under that designation.

Does anyone have experience or insights into what qualifies as an "Artist Dwelling"? How can I design or propose these apartments to meet this requirement while making them functional for long-term residents? Any thoughts or examples of similar conversions would be greatly appreciated!

I’m currently reviewing a fully occupied mixed-use commercial building with 8 SRO (Single Room Occupancy) units but have never dealt with this type of property before. The rents are collected weekly instead of monthly, so there are more rental periods each year, but I assume expenses may be higher as well.

Does anyone have experience with SRO real estate? I’m also curious if it's possible to convert these units into regular apartments, as this property is located in the NY suburbs. Any insights on increasing rents or updating the units would be greatly appreciated!

Thank you, Gino, for the great questions. I'll be sure to request that information from the seller. It's incredible how much valuable insight comes from the BiggerPockets community, and I really appreciate it.

Great insights, Thank you all