Jersey City, NJ · Member since 2016 · 170 posts · 12 votes
Hi-
It seems there are these rent stabilized/ controlled properties in NYC/ Manhattan, where the tenant cannot be evicted by landlord. There're no exception clauses really, perhaps except if landlord is going to live there, and that too, with a pressing need.
1 - A quick Google says yes it is - but i'll still ask - is this correct?
2 - Does this mean not to buy occupied properties in NYC for a flip? Its never going to be evicted.
3 - Is there a way to tell if the Occupant is a Tenant, or the Owner?
Evicting the owner should be different and perhaps simpler, I suppose?
Has anyone had experience in buying Occupied in NYC, and evicting the tenant?
It is exceptionally difficult to evict a rent controlled or rent stabilized tenant. There are clear laws and regulations around not just this but almost every interaction and facet of dealing with them. I won't go into them but I will just say that some of the most experienced landlords in NYC have had a hell of a time trying to get rent control tenants out and try and use various methods to try and do so such as noise, leaving things in horrible conditions, putting in tenants that will be a problem for other tenants etc. The vast majority of landlords on NYC's worst landlord list got there because of rent control or rent stabilized tenants. Unless you know the system backwards and forwards or can hire someone who does you might want to stay away. You can face some serious fines and possible legal action due to your actions related to these tenants.
However assuming you are doing what you are supposed to its really a waiting game. The longer the tenant is there typically the longer you lose money. The hope is either the tenant leaves or that prices go up enough to justify your losses on the cash flow side. If tenants do leave it is generally a windfall for the landlord. However, its a slow process generally which is why tenants typically can command as high as six or seven-figure payouts to leave.
Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
9y
James W. what kind of flipping are you doing?
Not a lot of folks flip apartment buildings in NYC so I doubt your planning on doing that.
are you planning on flipping 1-3 family or 4 family or more? 1-3 you will find it easier to evict tenants. Not a walk in the park but easier.
When you look at occupied properties vs vacant that will affect your values, vacant is more expensive.
Check with a lawyer to determine what the costs to evict and how long it will take.
I think most would recommend cash for keys.
Investor · Sunnyside, Queens, NY · Member since 2015 · 213 posts · 159 votes
9y
Need more details. What kind of flip are you trying to do?
It is possible to get rent regulated tenants out but it can be expensive, time consuming and subject to failure. There are landlords who are quite well versed in this, but often times they are breaking laws and undertaking very unethical actions.
This - is exactly my understanding from googling around, and it turns out from your responses that the nightmare is more real than not.
Thing is, with such tight regulations and legal around rent stabilized tenants, we don't want to deal with this. Especially when ideally we're looking to fix and flip in a matter of 3-6 months max - who's got the time and energy to deal with this.
This is for flipping a occupied condo, one unit.
I have two flips going on vacant REO's, and they are coming along fine. This is going to be our first experiment with a occupied foreclosure. We're looking at units that are 200-300 grands under market, but are occupied - and we don't know if the occupant is a rent stabilized tenant.
As for cash-for-keys, I suppose if the occupant is not a rent stabilized tenant, it should be similar to eviction in other states where this law does not apply.
Question - is there a way to find out if the occupant is a rent stabilized tenant, or the owner itself?
I don't know, I never really had any luck with REOs so I can't say I have run into it. For me the broker or auctioneer always told me as I assume they must if asked.