Is it worth to consider a brownstone fully occupied and with a 7A Administrator ?

I used to do filings for a management company that would attempt to turn around 7a buildings into profit. After a few tries he gave it up since it was not worth the time dealing with all this.

2 major things:

1) HPD will check on every other building you own if there are any outstanding HPD violations.
2) You must show them proof of having at least one million in liquid cash available.

brooklynexpediter

in Brownstoner 13 years and 10 months ago

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lozano | 13 years and 10 months ago

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Hi. I am considering a brownstone in west Manhattan which is fully occupied and has a 7A Administrator. Does any one have had an experience trying to buy something similar? Thank you.

housepoor | 13 years and 10 months ago

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Remember the 7A Administrator has fully control over the property. The law was put in place to protect the tenants from AWOL landlords, so the assumption is that the LL isn’t fit to own or run the building. You will step into those shoes. They don’t have to let the owner in the building if they don’t want to, give you any information about the tenants or their leases, and can spend anything they see fit on maintenance — but you will be responsible for all expenses until the 7A is removed, including the ones that have built up over time (if the rent roll is less than the expenses, and it probably is). You have to go to Court to remove the 7A, and that will take legal costs and many months. The 7A is not going to be happy losing the management job, so they have zero incentive to help you. If it is the building I am thinking of (upper Manhattan, landmarked area), you should ask about the plan to replace the roof and why they think it will cost $50,000 to do so. The roof may have been done already (I researched the building a year ago — since then it was auctioned, but the winner ran away once they figured out the problems, then it came back on the market), in which case check out the City liens on the building. The building permit was listed at DOB. It will be your nickel paying for it.

lozano | 13 years and 10 months ago

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Thank you so much.