Posted by IB (NJ) on June 14, 2004 at 11:31:10:
nt
Advice on not-quite-legal 3 family in NYC - Posted by Sammy
Posted by Sammy on June 07, 2004 at 15:58:48:
I’m within an inch of making a deal on a 2-family house being used as a 3-family. There’s nothing unsafe, but I don’t think it’s up to code on separate utilities, things like that. The house is going for $345,000, and the rents would cover my mortgage payments while generating about $600/mo in positive cash flow. I’ve got no problem with mortgage and downpayment, but does anyone know anything about making the 3-family arrangement kosher?
Any suggestions would be appreciated (in-forum, sorry, I hate all the spam I get). I really want to make this deal happen.
One more thing - Posted by Frank Chin
Posted by Frank Chin on June 08, 2004 at 05:11:49:
Sammy:
Do not put “three mailboxes” in front of the building, unless you want ot advertise its a 3 family. A building inspector told me when they respond to a compliant, check the house next store if its got three mailboxes, and he know its a 2 family zone.
The first thing I did was remove the mailboxes when I buy one of these, and put a mailslot on the front door.
Of course, there’s doorbells. Most people got two for the legal units, and may or may not include a third one. You’ll have to check the neighborhood to decide.
Frank Chin
Re: Advice on not-quite-legal 3 family in NYC - Posted by Frank Chin
Posted by Frank Chin on June 08, 2004 at 05:01:41:
Sammy:
These type of houses are very common in NYC, so common that Mayor Koch once mentioned that if he enforced the law on the illegal units, they’ll be hundreds of thousands homeless in NYC.
There are several things you should look out for:
1- The illegal unit should have at least two exits, or a bank would not finance till the illegal unit is removed. This is due to lender liability concerns. I own such a property, and I had it refi’d two years ago and the bank advised me of this. The illegal unit has a backdoor in additon to the entrance form the lobby, so the bank had no problem.
2- Somewhere along the line, someone can still file a complaint on you, and they can still make you remove the illegal unit. Currently, they respond to complaints, and does not go out looking for them, unless they have something on file.
The buildings department did in fact check out an illegal unit of mine, for another building, and told me to remove it. We hired an architect, and we filed plans, and instead of removing it, legalized it to the best extent possible. They will allow a toilet and sink, but not a bathtub for instance. My kitchen is now a “bar”, with a kitchen sink replaced by a “Bar sink”.
This cost me several thousand in fees. Only the bathtub was removed, but the plumbing inspection cost $500.00. Then I had to file permits, file plans, which cost another few thousand.
3- You’ll have a problem doing evictions. A sharp eviction lawyer will get a C/O and notice its for two units. If the tenant on the third floor does not pay the rent, and you want to evict him, and he knows you have three tenants, he’ll have your case thrown out till such time the illegal tenant is removed.
So you’ll have to do a month to month on the illegal unit, or you’re stuck. But one enterprising realtor who owns these evict the illegal tenant on the ground that the tenant is in an illegal unit. While that’ll get the eviction done faster, he opens himself up to a lawsuit from the tenant.
In my lease addendums for these units, I put down something that “should the tenant be asked to leave because of governmental actions, the landlord is only liable for a months rent in damages”.
There’s neighborhoods full of these buildings, and I, my mother in law, and many other people owned them for years and years.
Frank Chin
Re: Advice on not-quite-legal 3 family in NYC - Posted by IB (NJ)
Posted by IB (NJ) on June 07, 2004 at 20:08:09:
You definitely want to talk to Frank Chin BEFORE you do this deal. He’s a regular NYC investor on this board who spoke a few times on this issue. Look him up in the archives by entering his name along with ‘illegal’ and ‘new york city’. You should also be able to email him direct.
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Thanks so much - Posted by Sammy
Posted by Sammy on June 09, 2004 at 10:51:49:
Thanks, this is really helpful.
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Boy Frank… - Posted by IB (NJ)
Posted by IB (NJ) on June 08, 2004 at 14:36:29:
I feel like Commisioner Gordon, sometimes. Everytime I throw up the bat lights, there you appear out of nowhere 
I hope you save these responses in some type of file. It seems like you have to answer these every few months or so.
I wouldn’t normally associate Frank Chin with… - Posted by SeanB (NJ for now)
Posted by SeanB (NJ for now) on June 09, 2004 at 16:30:32:
“illegal” and “New York City”, but in this case it works…
thanks Frank
Hey Sammy - where in NY did you find this property?
Hello, Commissioner Gordon … - Posted by Frank Chin
Posted by Frank Chin on June 09, 2004 at 09:12:24:
IB:
That’s funny LOL.
Definitely have to get a special phone line in the Bat Cave for “illegal 3 families”. Got my “cloaking device” ready for the code inspectors.
Hear the Penguin is going to report 100,000 illegal housing units to get the authorities busy so he can pull his next heist.
Is Gotham ready for 100,000 homeless families wandering the streets?? Tune in to the next episode on “Illegal 3 families”
Frank Chin
Re: Hello, Commissioner Gordon … - Posted by Chuck Rosenberg
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Re: Hello, Commissioner Gordon … - Posted by Chuck Rosenberg
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