What to do now to prepare for a sale in a year of your Harlem SRO

Please note that the below is not legal advice or meant to substitute for it. Always consult with your attorney when dealing with matters of eviction, rent stabilization etc…

If you have some time before you are going to sell your Harlem SRO, there are several things that you can do to better position your property in the market to get the most money and with the least stress later. Here is my checklist.

1-Apply for a certificate of no harassment  (CNH)
2-Relocate or encourage the tenants to relocate especially tenants that are not paying.
3-Overall maintain a great relationship with the tenants
4- Make sure all services like heat and hot water are always provided and repairs are done swiftly
5- Minimize DOB,HPD violations

1-The CNH process takes anywhere from 5-7 months so in order to not delay your closing later, apply for it in advance. For more on why it’s important read this previous post.

2- Since the next owner will likely want to alter the building to a 1-2 family, their plans will be delayed by tenants that still remain. As a result, the majority of buyers except the most savy will steer clear of occupied SROs. Tread lightly here because you can not do anything that would be considered harassment. If a tenant is not paying, you need to get an attorney and do an eviction asap. I have seen many cases where the tenants who do not pay rent are the ones who want the most money to be bought out of their apartments. So if a tenant is not paying, stay on top of it. Other tenants may leave on their own or be bought out. Just be careful if word spreads to other tenants that are buying tenants out, prices tend to ramp up. Also consult with an attorney as an SRO probably will fall under rent stabilization laws so tenants are entitled to renewal leases and the rents should be registered with DHCR.

3&4- Keep in mind that in order to obtain a CNH, HPD will ask the tenants both past and present within a 3 year look back for evidence of harassment. So while landlord-tenant relationships can get strained at times, always maintain a good relationship with your tenants. Also, move quickly to perform any repairs and you must maintain all basic services like heat, hot water and electricity within the building. Failing to provide basic services is a red flag of harassment.

5- Make sure to register your building and address any violations that you have on the building. It is easier to address issues little by little then let violations accumulate along with fines and penalties.

In most cases when I am called in to list and sell a Harlem SRO, there are many things we can address and a few that we should. However, if you have some lead time, things can get done in advance and we can get you the most money with the least amount of stress as a result of a little proper planning.

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every neighborhood from Battery Park City to Washington Heights.

 

 

400 Central Park West Building snapshot

If you are thinking of buying on the Upper west one of the most desired building is within the postwar Park West Village. It is located at the corner of Central Park west and 100th street. The building features studios to 2 bedrooms (540 sqft(50m2) to 1140 sqft(105m2)). There are 1 bedrooms and 2 bedrooms with balconies. Apartments face either north or south due to the building being sideways on Central Park west and the 2 bedroom apartments have a second exposure either west or east.

Inside the building, there is a full time concierge, live-in-super, on site property manager, exercise room, children’s playroom, and laundry. Bike storage, storage and parking are also available on a wait list basis with parking in the outdoor parking lot going for only $204 per month! It takes about 1 year to get a space in the 400 Central Park west parking lot as of this time.

Best of all, 400 Central Park west has very low monthly charges. A 2 bedroom/2 bathroom which might sell for between $1.6-$1.9 million will have a common charge of about $900 and taxes around $400. For this reason, there are a limited number of apartments for sale in 414 unit building. Owners tend to purchase and stay or hold their properties long term.

The building also shares a playground with the neighboring buildings plus there is another playground inside Central Park at West 100th street. Many of the southern facing apartments have wonderful views of the Park and a Citi bike station is located across the street at Central Park west and West 100th street on the park side of the street.

400 CPW Lobby

Listings in 400 Central Park west

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every Manhattan market from Battery Park City to Washington Heights.

 

How to avoid taxes on the sale of your Manhattan investment property

One of the easiest way to save money on the sale of your Manhattan investment property is to do a 1031 exchange also known as a like kind exchange. The gist is you sell an investment property, and purchase a property of similar value. The property must close within 6 months of the sale of the first property and you need to identify it within 45 days of the closing of the sale.

Let’s take a look at an example.

You have an investment condo worth $2 million that you have owned for 20 years that you bought for $500,000. Instead of paying tax on the profit, you buy another property worth $2 million and roll over the gain. The purchase can be another condo, multi-family, vacant land etc… When you close the sale of the condo, you have 45 days to identify potential purchases and 6 months to close or you lose the opportunity to do the 1031 exchange. Speak to your CPA and attorney for details on how to execute this process. But once you execute the purchase, you trade one property for the other and have deferred the taxes. With the typical Manhattan condo investment property returning 2-3%, you can probably buy another property either in New York or another statement that will return two to three times the net cash flow. In addition, if you have owned an asset for a number of years, it is likely you have depreciated it possibly even to the max. By starting over, you can begin depreciating anew. Again, speak to your CPA.

Keep in mind that a 1031 exchange is not for your primary residence but rather a property that you have rented it as an investment. But with this technique in your arsenal, you have the ability to sell and defer the taxable gain!

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every Manhattan market from Battery Park City to Washington Heights.

Manhattan luxury real estate market doing well

21 contracts were signed last week above $4 million according to the Olshan report. Dollar volume is up since January as well.  This was the 6th straight week with at least 20 contracts signed above $4m.

Full coverage from The Real Deal

Understanding buyer due diligence on a Manhattan residential purchase

Once a contract is sent out, the buyer’s attorney and associates do their due diligence. What exactly happens?

The buyer in the purchase of a Manhattan condo or co-op will examine the last 2 years financials, the original offering plan, any amendments to the offering plan, board application package, house rules and may even read the minutes of the Board of Directors meetings.

When I almost purchased a co-op on the Upper east side, my CPA actually reviewed the building financials and told me that the building was losing money and my maintenance will increase over time sharply and advised me not to buy. So your attorney or even your CPA will try to steer you clear of any building with finance issues at the least.

Also when they look through the rest of the building documents they are looking for any hint of a major expense on the horizon or perhaps a troublesome neighbor. They may even send their own questionnaire to the building management. I have seen this done by one attorney.

If you were buying a townhouse, they would look at the certificate of occupancy to see if it is consistent with the current layout as well as any inspections that you may have conducted that would turn up any major potential expenses that you may incur like a roof, or mechanical systems.

During this period of time, they will review the contract sent by the seller’s attorney and will also make comments or add a rider to the contract to best protect your interests.

Typically, the due diligence period will take about a week or so, and once completed the lawyer will give their approval/advice to you as the buyer so that you may sign.

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every Manhattan market from Battery Park City to Washington Heights.

Why the NYC market will continue to attract foreign investors

There are many reasons why the US market and specifically gateway cities such as New York will continue to be attractive to foreign investors. The Commercial Observer takes a look at the investment goals of foreign investors and explains which markets should continue to be attractive to them. Basically, they are looking for stability in both political and the economic sense. Some other markets such as South Africa or China might have a higher rate of return but they come with a higher potential of risk. While rate of return of investment may be slightly up or down depending on the point in the cycle, high net worth individuals according to the article are looking at their overseas holdings as a bank account. The Manhattan market continues to be attractive as that bank account and liquid. As such, Manhattan continues to attract foreign investors.

Read the full coverage

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every Manhattan market from Battery Park City to Washington Heights.

Manhattan rental and sales market update

According to the Real Deal reports, the rental market stayed flat in February which is not that unusual given the time of the year.Full story here The sales market saw over 800 contracts signed with roughly half being co-ops and half being condos. The $1 to $2 million range continues to do well, accounting for nearly 30% of all deals.

Full coverage from The Real Deal

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every Manhattan market from Battery Park City to Washington Heights.

 

As Manhattan new development sales slow, developers offer incentives

Developers do not like to lower prices in their Manhattan offerings so when sales slow, they offer incentives. A TriBeCa condo with an unsold penthouse is offering a free parking space to go along with their nearly 5000 sqft penthouse. At 71 Laight street, the only unsold unit is offering a 12 by 24 spot below the lobby as an enticement.

At 1 West end avenue (1WEA) 80% of the units are sold and the developers is offering $25,000 in custom closets for potential buyers on the remaining units to entice buyers. 1 WEA launched about 1 year or so ahead of the Waterline Square development just to it’s west which has a shared amenity space called the Waterline Club, a starchitect pedigree, and better views of the Hudson due to it’s location.

At the Beekman Residences downtown, the condo connected to the famed Beekman Hotel, the sponsor is offering $10,000 towards services in the adjacent hotel.

Developers in buildings with unsold units prefer to offer these incentives (instead of reducing prices) which are not recorded on a deed so that it will not affect the future sales of other units in the building.

Read the NYT article

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every Manhattan market from Battery Park City to Washington Heights.

 

Differences between co-ops and condos part 3

In this continuing series we will take a look at a couple more differences between co-ops and condos.

1- Co-ops tend to be located in prewar buildings while condos tend to be newer, shinier and more full of amenities. So if you love prewar lobbies, crown moldings and other details of prewar buildings, you probably will be looking at more co-ops. Almost all new offerings in the last 10 years plus are condos so condos tend to satisfy the wants of Manhattan buyers who are looking for newer buildings with amenities like swimming pools, roof decks, bowling or golf simulators. Some co-ops will have nice amenities as well but very few co-ops have been built in the last 20 years or so.

2- If you are a foreign national or US based investor, condos will most likely be your choice. Co-ops tend to examine a plethora of documents as previously mentioned including US credit. Since a co-op can turn down someone without providing a reason, if you are foreign national purchasing as a primary residence or a pied-a-terre, your safer bet will be a condo. Also, if you are purchasing for investment, almost all co-ops will require you live there first then there will be restrictions for how long you can rent.

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every Manhattan market from Battery Park City to Washington Heights.

Are you ready for elevators that go sideways?

As Manhattan buildings continue to go up and up, elevator companies are racing to provide the technology for these supertalls. Among the features are elevators that not only go up and down at a max velocity but also go sideways. Click on the link below to read the full story from the Real Deal.

Full coverage from The Real Deal

The Author-  Brian Silvestry , a licensed real estate broker, has been selling residential and commercial real estate since 1999. He has sold in every Manhattan market from Battery Park City to Washington Heights.