Small Landlords for Rent Stabilized Multi-Family (Queens, NY)

[Dennis D.]

I'm seeing more 6-family rent stabilized homes for sale now in Queens, NY.

Based on my research, most people suggest staying away from these properties (e.g. More regulations, tougher to evict non-paying tenants, etc.). One landlord even suggested that a mortgage-free 6-familly still isn't worth it here!

I'm curious if there is anyone here that can share any success on making these properties work? How did you do it?

[Abel Curiel]

Quote from @Dennis D.:

Thanks, Lydia — this is super helpful. I have a question about the tenant review part you mentioned.

Is it actually possible to find out things like a tenant’s age, income level, or DHCR registration history before making an offer? Or do you usually only get that info once you’re in contract or during due diligence?

 Hello Dennis,

Agreed with @Lydia Winn ! These are long-term plays. Also, all deals are different and can have unique selling points.
For example, we have a client selling four 6-unit rent stabilized buildings in Ridgewood Queens. 
The NOI hasn't been the most attractive over the last 2-3 years. However, this is for a good reason. The portfolio has been family-owned and operated for decades, and they've spent the last 2+ years gearing up to sell it by investing in CapEx items like the roofs, boilers, and more.
Now that these improvements have been made, the expenses on the buildings will go down to about 35-40% compared to 50-60% over recent years. 

Regarding finding out about tenants' age, income level, registration history, etc., many property owners will be willing to share information after a serious offer has been presented. 

The majority of this information can be obtained before a fully-executed sales contract, while some information will be released once the deal is officially in contract. Timing depends on the sellers and attorneys.

Lastly, I'd request detailed financial information on any buildings you're interested in. NY rent-stabilized buildings that I've recently looked at have grossly underreported their expenses. I've found buildings with 40-45% (actual) annual expenses when their original marketed/reported expenses were around 25-30%.

All the best!

Abel