All Forum Posts by: Paul Jump

@Josane Cumandala in that scenario, it would be a max spend of $1 million with potential (though understandably very risky) to settle for far less. I'm interested in determining the amount of risk in this situation. It may be that the tenant is willing to relocate. It's also possible to further negotiate using that risk as leverage on the seller. I agree that it is speculative though, but with enough cash to explore options, it could be a diamond in the rough.

Does anyone have strategies for determining the risk of a specific tenant before making a purchase? 

@Jason Lee the estimated return is averaged annual return based on purchase price and value after tenant has vacated, based on value of recently sold units in the building. 

For example:

Vacant neighboring unit: $1 million 

Tenant occupied unit: $250k

Fees: $1000/month

Rent: $500/month

Would a buy-out under $750k be logical especially if it is to be owner occupied? I understand there is risk that someone would not take a buy-out, and the it's far easier to just buy the $1 million unit, but those who buy several of these types of investments have to start somewhere, right? 

@Josane Cumandala @Jason Lee and @Frank Chin thank you so much for your insight and opinions. My grandmother is 98 years old, and still has another 10 years in her. I'm also not nearly cold enough to think about kicking someone like her on the street. I'd be interested in some kind of win-win. That said, I am having a difficult time moving on from this one (and similar opportunities for that matter) because the math seems to work even when I can't immediately move-in. And to clear a few things up, this is a Co-op not a condo (apologies for not making that more clear).

For example: buying into this co-op and paying HOA fees for 20 years yields an annual return of about 10% (and obviously more for less time, i.e. 10 year would be a 18% yearly return). That's not an amazing return, but it beats my stock portfolio.

Has anyone approached rent controlled, tenant occupied co-ops as a specialty (or have creative ideas on how to make it work)? I imagine there could be some notion of "underwriting" tenants before making an investment.

In this instance, with amount of information available online, I've been able to figure out who actually lives in the unit. It's definitely a grey area to do anything with this information, but what (if anything) would be ethical? Could I contact them asking about their willingness to relocate? Everyone has a price, unless you're my grandma...

I am evaluating an under market for a rent controlled unit currently occupied by a tenant in NYC. The property is a foreclosure so I can't get any information from the previous owner. The rents collected are about half cost of the HOA fee.

My situation is that I am actually looking for a primary residence and would be willing to live in this property for several years. 

So, the risk is if I can’t do an owner use eviction, I’ll essentially be substidizing the tenants rent every month out of my own pocket. 

Any advice how I can either gauge the likilihood of an owner use eviction being legal for this particular situation beforehand OR somehow legally raise rents to close the expense gap?