Legal 2F with in law what do I need to know? - Posted by aj

Posted by Frank Chin on February 24, 2003 at 08:25:16:

Hi AJ:

Here are some issues involved, as I have purchased and Refi’d some of these:

1- Here in NYC, they’ve gotten tougher on such units, so lenders react accordingly.

2- As a rule, if they tolerate the unit, they won’t count the rental for it.

3- My lender tells me they won’t touch it unless the unit has two means of egress - even if the unit itself should not be there.

4- Some lenders now require the such units be removed as a condition of a refi.

5- BUT, there’s properties all over built like this. If you want to go by the book, rent the 1BR unit to someone looking to have a home office, in addition to to their residential unit. I rent to a WEB designer right now using the 1BR as an office, and lives upstairs. He’s paying market rent for both, and happy that he’s not paying market rent for a place a mile away. Well, at least I convinced him while its market rent, its convenient, though he thinks he should get a two for one discount.

6- If you want to have the lender count the income, convince them that you can rent the both to one tenant, as I did. The unit may not be legal for someone as a residnece, but perfectly legal for someone to use as an office living upstairs. Do a little market research.

Frank Chin

Legal 2F with in law what do I need to know? - Posted by aj

Posted by aj on February 23, 2003 at 19:25:49:

Found an investment which I would owner occupy, Legal 2 F 2BR/3BR and 1 Br law apt. TAW currently in the in-law paying below market rent, I would like to owner occupy this space or potentially the first floor, if TAW is sincere about about accepting a 50% rent hike. I should be able to breakeven,i.e. live for free in a very tight market

I am slightly concerned about this situation as this is my first purchase. I would like to get credit for this inccome for financing. What is the best way to present property to a lender? is there any pitfalls I should be aware of?
Should I attempt to get