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Washington D.C. Real Estate Q&A Discussion Forum

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Dan Robinson
  • Investor
  • Alexandria, VA
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Buy Occupied Apartment Buildgin

Dan Robinson
  • Investor
  • Alexandria, VA
Posted Jul 30 2019, 06:23

I've got a contract on a small apartment building in DC that is partially occupied. I'd like to eventually facelift the units and raise the rents. I'm aware of the TOPA requirements, and I have clauses in the contract that the seller must provide copies of leases and security deposits. It will fall under the rent control requirements for DC. Any advice for other actions to take to ensure a smooth handover and/or tips on how to encourage current residents to move along so that I can remodel and raise rents besides buying them out?

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Michael Garofalo
  • Rental Property Investor
  • Washington, DC
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Michael Garofalo
  • Rental Property Investor
  • Washington, DC
Replied Aug 5 2019, 03:58

@Dan Robinson one creative idea might be to play "musical chairs" with the units and tenants. In other words, renovate one of the vacant units first and then move an existing tenant into it, then proceed to renovate that tenant's previous unit etc. You could do this for all existing tenants and then look outside for fresh tenants to fill the remainder of empty units. You could raise their rents to an amount that is in line with rent control guidelines and slowly bring everyone up to market over course of a few years, if current owner is under-charging.

Everyone has a different strategy, but I think it would be best to avoid kicking current residents out of their homes unless they are really causing issues or the rents are so grossly below market that it would take an excessive amount of time to get them up to their fullest potential.

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Frank A.
  • Rental Property Investor
  • Montgomery, AL
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Frank A.
  • Rental Property Investor
  • Montgomery, AL
Replied Nov 11 2019, 10:43

Hello all, I'm planning on moving to the DC area and I'm planning to house hack with a MFR owner occupied quadplex. I've also been trying to understand the rent control laws. Does the below excerpt from the rent control pamphlet mean that a 4plex would be exempt from the rent control laws?

"The Act applies to all housing accommodations and rental units in the District of Columbia. The rent
adjustment section of the Act does not apply to rental units that are specifically exempted by the
Act. The most common exemptions are rental units in these categories:
 rental units (including condominium or cooperative units) owned by a natural person who
owns no more than four rental units;" - https://dhcd.dc.gov/sites/defa...

Thanks for the help in advance! 

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Russell Brazil
  • Real Estate Agent
  • Washington, D.C.
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Russell Brazil
  • Real Estate Agent
  • Washington, D.C.
ModeratorReplied Nov 11 2019, 11:39
Originally posted by @Frank A.:

Hello all, I'm planning on moving to the DC area and I'm planning to house hack with a MFR owner occupied quadplex. I've also been trying to understand the rent control laws. Does the below excerpt from the rent control pamphlet mean that a 4plex would be exempt from the rent control laws?

"The Act applies to all housing accommodations and rental units in the District of Columbia. The rent
adjustment section of the Act does not apply to rental units that are specifically exempted by the
Act. The most common exemptions are rental units in these categories:
 rental units (including condominium or cooperative units) owned by a natural person who
owns no more than four rental units;" - https://dhcd.dc.gov/sites/defa...

Thanks for the help in advance! 

5 or more units and you are subject to rent control. Newer buildings are also exempted.

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Frank A.
  • Rental Property Investor
  • Montgomery, AL
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Frank A.
  • Rental Property Investor
  • Montgomery, AL
Replied Nov 11 2019, 22:52
Originally posted by @Russell Brazil:
Originally posted by @Frank A.:

Hello all, I'm planning on moving to the DC area and I'm planning to house hack with a MFR owner occupied quadplex. I've also been trying to understand the rent control laws. Does the below excerpt from the rent control pamphlet mean that a 4plex would be exempt from the rent control laws?

"The Act applies to all housing accommodations and rental units in the District of Columbia. The rent
adjustment section of the Act does not apply to rental units that are specifically exempted by the
Act. The most common exemptions are rental units in these categories:
 rental units (including condominium or cooperative units) owned by a natural person who
owns no more than four rental units;" - https://dhcd.dc.gov/sites/defa...

Thanks for the help in advance! 

5 or more units and you are subject to rent control. Newer buildings are also exempted.

@Russell Brazil Awesome, so to be clear if I purchased a 4plex with renters, I would be able to raise rents at will? 

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Russell Brazil
  • Real Estate Agent
  • Washington, D.C.
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Russell Brazil
  • Real Estate Agent
  • Washington, D.C.
ModeratorReplied Nov 11 2019, 22:55

@Frank A.

If you dont own any other units in DC, then yes. You have to do some paper work with DCRA to get your rent control exemption. Youd also want to be careful about a drastic rent raise, as a judge could conceivably view it as a constructive eviction.

Also be aware that occupied multifamily properties are subject to TOPA. So the tenants have the legal right to blackmail the seller or buyer for money to waive the TOPA rights.

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