paddingtonbear's Profile
- Aaron Lammer
- 2003
- 2008
- Brooklyn
- Prospect Heights
- Rental
- Male
- 27
Author's Posts
July 10, 2009
C of O for Rear House?
I'm looking seriously at buying a 2 family property in Prospect Heights, which includes a 3-story 2 Family in the front, and has a 2nd 2-story house in the back. While the back house is legally registered with the Dept. of Housing and Preservation, it's not listed on the C of O, and thus from what I've heard from brokers, it won't be used in the appraisers assessment of the value.
Based on this limited info, an appraiser allied with the broker I'm talking to thinks that the property will appraise for 950 - 1mil. The asking price is 1.2 million and the owner is firm - though would owner finance the portion of the price beyond what the bank will lend for the appraisal. So if the bank appraised at 950k, I would end up borrowing 250k directly from the owner.
Based on the projected rent roll (I would occupy and rent) for a 2 bedroom, plus a 3-bedroom duplex, plus a 3-bedroom standalone duplex house, I feel comfortable that I will be able to cover the mortgage (split between the bank mortgage and the owner financed mortgage. I'm concerned, however, about resale. Does anyone have any experience getting a standalone backyard structure added as an extra "family"? Can anyone recommend a contractor/architect/appraiser that I could discuss this with? I'm happy to pay to speak to someone or have them walk through.
To sum it up - I'm interested in how I could get a property zoned in such a way that it would be sure to appraise for enough money to cover a mortgage in the 1.2mil plus range.
June 30, 2009
Brooklyn Mother/Daughter Units
I'm strongly considering a 2-family property w/ an additional house in the backyard.
The front house is the 2 family.
The owner says that the back house (a 2-story 3-bedroom) is registered as a "mother/daughter" unit and thus the property is not a 3-family, though the back house is legal to rent.
Does anyone have any info on mother/daughter units?
I have spoken to a broker and his belief was that the mother/daughter unit would not be counted for anything at all in getting the property assessed.
The asking price (1.2mil) would be high for a smallish 2-family in Prospect Heights, so taking into account the rental income of the back house is essential to getting an assessment that would qualify me for a mortgage.
It seems like the owner won't be able to get a buyer at this price without the back house being included in the assesment, unless the buyer could put down around 50%.
Anyone gotten a place w/ a mother/daughter unit assessed? I'm still hopeful because the rental income would cover my mortgage payments nicely.
Mortgage Broker: Ted Morales
Does anyone have experience with a mortgage broker in Brooklyn named Ted Morales?
He was recommended by the seller, not much info I can find about him.
Author's Comments
The taxes are actually insanely low - under 1k per year because of an abatement.
I'd like to leave it 2-family while I own it to save on taxes, but was considering the possibility of converting it right before I sold, since I'll face the same problem when I sell: it won't appraise well, and if the lending climate is the same, it will be a difficult financing situation for a buyer.
Unlike the current owners, I probably won't be able to offer a buyer owner financing.
I'm not looking to flip it - but just want my outs covered and wanted to know what it would require to get it to a 3-family status so it would appraise for closer to its actual worth (which I realize is subjective).
Posted by: paddingtonbear at July 10, 2009 3:47 PM in response to C of O for Rear House?
I am not "pushing the assessment", I'm merely looking to take out a mortgage on the basis of the total potential rent income of the building.
Yes, I could buy a cheaper place without as many rental units, but the income of the rental units will be nice in the long term. Personally, I only want a 1 bedroom for myself (I'm in my twenties and single) so buying a larger place and renting out units will give me the opportunity to expand as I get older.
Not sure if I would refer to Prospect Heights as a marginal area, particularly within the Washington to Flatbush zone.
Thank you, Adam Dahill - I'll be in touch.
Posted by: paddingtonbear at July 1, 2009 11:37 AM in response to Brooklyn Mother/Daughter Units
I as a general rule agree, but for a few reasons I'd like to speak with him.
Posted by: paddingtonbear at June 30, 2009 2:55 PM in response to Mortgage Broker: Ted Morales
Responses to Author's Forum Comments
I'm available. :)
adahill@approvedfunding.com I've got references!!!
Posted by: Adam Dahill at June 30, 2009 3:24 PM in response to Mortgage Broker: Ted Morales
Pbear... Give Brendan Coburn of Coburn Architects PC a call. He did the exact thing you're looking to do on St. Marks Avenue in Prospect Heights back in 2002 or so. Two story brick shell behind a three family, prior manufacturing C of O, and converted it into residential... Won some awards as well if I remember. The property just changed hands for 2.4 million by the way. Nice guy. Used to post on Brownstoner back in the day.
Posted by: IMBY at July 10, 2009 5:37 PM in response to C of O for Rear House?
Paddington,
Yes, that house is kind of nice if it's one I'm thinking of. It has parking, no?
I didn't quite love the fact that the yard is nearly or is entirely paved with granite "cobblestone"/"Belgian pavers". But I'm sure you can green it up.
Good luck with it but don't over pay now.
Posted by: BrooklynGreene at July 10, 2009 6:29 PM in response to C of O for Rear House?
oops...IMBY, I think I may have been thinking of the property that Brendan redid...
If THAT property went for "2-point-four", I doubt it the same one asking "1-point-2".
Have a good weekend!
Posted by: BrooklynGreene at July 10, 2009 6:32 PM in response to C of O for Rear House?
I bought a similar property in windsor terrance in 2003. Three story attached in the the front with three apartments, and a two story rear house on the same lot. There was a C of O for the front but nothing for the rear. Most rear houses in NYC predate C of O statutes. I had similar problem with the lender appraising the total rent roll without C of O. We insisted that the seller obtain a "letter of no objection" for the rear house from DOB which would serve as a C of O. It took them six months to get it, but we would not close without it. Properties with a rear house often represent good value on a square foot basis and can be improved to create an excellent rent roll and cap rate.
Posted by: Derekinwindsorterrace at July 11, 2009 5:41 PM in response to C of O for Rear House?
It is interesting that the owner is willing to offer financing. Why not take him up on it? That eliminates the problem with financing, doesn't it?
Posted by: Jumbo at July 12, 2009 8:50 AM in response to C of O for Rear House?
Yes, I intend to take him up on it - the question comes into play when I sell it - since I will likely not want to offer owner financing to whoever buys it.
This is all theoretical - and 5+ years down the line - but I need to consider it.
Posted by: paddingtonbear at July 12, 2009 3:38 PM in response to C of O for Rear House?
Someone on my block just bought such a building. Plus this person is an architect. I wish I had more information. I only know about it because we share the same broker. It is a long shot but you might try calling Boerum Hill Realty and ask for Al Barcelon. He may or may not be able to help you as he is a realtor himself but I know he worked on a similar sale.
Posted by: boroughbred at July 12, 2009 9:54 PM in response to C of O for Rear House?
Yes, I intend to take him up on it - the question comes into play when I sell it - since I will likely not want to offer owner financing to whoever buys it.
This is all theoretical - and 5+ years down the line - but I need to consider it.
Posted by: paddingtonbear at July 12, 2009 3:38 PM in response to C of O for Rear House?