All Forum Posts by: Ariel Cohen

Joel Orford which area is the property in? How many units are currently in the building? How bad is the fire damage? My partner just renovated a fire damaged 3 unit property. Property was in an okay neighborhood so it was done with a low level of finishes. Construction was around $120k all in. We are also doing a 5 unit renovation in a nice area of bed-stuy and spending $300k all in without any fire damage. So depending on the level of renovations you need to do, your budget may or not be accurate.

Tiffany Campbell there are still plenty of deals out there in Brooklyn... If you live there and know the people then talk to them and see if anyone is willing to sell. Most of the good deals happen without the properties ever coming to market.

John Hickey renovations look great! It's amazing what you find covered up in these properties. Nice brick fireplace hiding behind some Sheetrock... I am about to start a full rehab on a 5 unit brownstone in Bed-Stuy... A lot of original details still remain but looking forward to uncovering some goodies.

I guess my question is more related to some areas where rents are below the limits that section 8 will pay. Why can't I put section 8 tenant and change $2,000 when the max that I cash paying tenant will pay is $1,500. 

I haven't had any experience with program tenants in NYC yet but I am considering purchasing a building that has program tenants in it. So I started doing some homework to learn the programs.

One part that I haven't been able to understand yet is the disparity between the HUD FMR (Link to HUD site) which sets the FMR by county. So for example in Brooklyn (Kings County) the FMR for a 3BR is $2,021. There are some parts in Brooklyn where a 3BR would rent for double that and other places where a 3BR would go for $1,500.

Being that Section 8 will give the tenant a voucher for $2,021 why doesn't every 3BR in NYC rent for $2,021 regardless of location?

I am sure I am missing something ;-)

@Scott L. are the rentals empty  or are there tenants in there? What type of units? 1BR? 2BR? What are the rents?

I might have a guy or two to recommend depending on the type of work you are planning on doing. 

@Dave Fosterthanks again for the feedback. I will report options back to the seller to help made a determination. I will reach out to you for more detailed assistance as it becomes necessary. 

@Dave Foster Thanks for the detailed response... Your analysis confirms my understanding of how a 1031 would work in this situation. I believe she mentioned that her basis is $750k based on an appraisal obtained when the property was transferred. She inherited the property from her parents in 2010 who purchased the property in 1958.

Does the gain need to be allocated proportionately across all the units? So if the total gain is $750k ($1.5mm less $750k basis) she can only allocate $125k of the gain to her primary residence? 

Also can the gain be partially deferred by using seller financing on the transaction?

@Account Closed No as is a 1031 is not possible with a purchase of a lessor value, or no you can't completely defer the taxes?

I was under the impression that a 1031 can be accomplished for a lesser value property but the transaction will require taxes to be paid on the cash received.

I am working with a seller who is looking to sell her 6 family property that she is living in and purchase a 2 family house where she will occupy one of the units.

Assuming the 6 family property is sold for $1,500,000 and she purchases a 2 family house for $750,000 can she use a 1031 exchange to go from the 6 to the 2? 

If she agrees to seller finance part of the transaction to defer the taxes on the cash she would otherwise receive, can she use a combination of 1031, 121 & installment sale?

I am trying to help the seller with the best possible structure that would work for both of us.

Thanks.