SRO FINANCING

I am looking to purchase a brownstone in West Harlem that will be delivered vacant upon closing (only one tenant in there now). Does anyone have a contact for a lending institution that does such loans? Thank you.

arad

in Mortgage 13 years and 8 months ago

6

Please log in, in order to post replies!

6 replies

Newest Oldest

lawlorg | 10 years and 1 month ago

string(1) "1"
object(WP_User)#4850 (8) {
  ["data"]=>
  object(stdClass)#4871 (12) {
    ["ID"]=>
    string(6) "185544"
    ["user_login"]=>
    string(7) "lawlorg"
    ["user_pass"]=>
    string(34) "$P$BT/EPHBEa//Rm4Ax/DQ2UW3tjKD0Zt0"
    ["user_nicename"]=>
    string(7) "lawlorg"
    ["user_email"]=>
    string(21) "forms@generationg.com"
    ["user_url"]=>
    string(0) ""
    ["user_registered"]=>
    string(19) "2017-08-10 13:56:25"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(7) "lawlorg"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(185544)
  ["caps"]=>
  array(1) {
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(1) {
    [0]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(1) {
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

I am also interested in SRO financing. I am under contract to buy a building which is registered as an SRO. It is currently vacant and will be delivered with the CNH (and the sale is contingent upon this). I would like to do major renovations and eventually apply for a new 3-family C of O. I am paying cash for the building and would like to get a line of credit, secured by the building, to do the renovations. I’m told it’s difficult to lend against any building without a C of O (even if it has the CNH). Does anyone know lenders who are open to this sort of financing?

realestat | 13 years and 1 month ago

string(1) "1"
object(WP_User)#5116 (8) {
  ["data"]=>
  object(stdClass)#5114 (12) {
    ["ID"]=>
    string(6) "179567"
    ["user_login"]=>
    string(9) "realestat"
    ["user_pass"]=>
    string(34) "$P$BDSqS1BeXDt30RitilthYJb1gvvxu4."
    ["user_nicename"]=>
    string(9) "realestat"
    ["user_email"]=>
    string(23) "bryan.shaffer@ireto.org"
    ["user_url"]=>
    string(51) "http://bstoner.wpengine.com/forums/users/realestat/"
    ["user_registered"]=>
    string(19) "2017-08-10 14:42:14"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(9) "realestat"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(179567)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

In Los Angeles, Bryan Shaffer of George Smith Prtners, the real estate investment banking firm, has financed several SROs.  I think he leads the nation in this type of financing. His email is bshaffer@gspartners.com.

empathie00 | 13 years and 7 months ago

string(1) "1"
object(WP_User)#5113 (8) {
  ["data"]=>
  object(stdClass)#5142 (12) {
    ["ID"]=>
    string(6) "177582"
    ["user_login"]=>
    string(10) "empathie00"
    ["user_pass"]=>
    string(34) "$P$B39XlbF3Z/GXxRzNgW/yrLZdITT1/R."
    ["user_nicename"]=>
    string(10) "empathie00"
    ["user_email"]=>
    string(21) "empatrick@hotmail.com"
    ["user_url"]=>
    string(25) "/forums/users/empathie00/"
    ["user_registered"]=>
    string(19) "2017-08-10 14:17:48"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(10) "empathie00"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(177582)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

Depends on if it has a CNH as well as whether you’re planning on keeping it as an SRO. If you’re intending to get a new C/O, look into the 203K program – Wells Fargo and Bank of America do them. Our house is an SRO with CNH, and we got a 203K no problem. Good luck!

wyckoff | 13 years and 8 months ago

string(1) "1"
object(WP_User)#5114 (8) {
  ["data"]=>
  object(stdClass)#4850 (12) {
    ["ID"]=>
    string(5) "26009"
    ["user_login"]=>
    string(7) "wyckoff"
    ["user_pass"]=>
    string(34) "$P$BAMrRIKB4WASdCkuxEITHMhYQsE5yr."
    ["user_nicename"]=>
    string(7) "wyckoff"
    ["user_email"]=>
    string(25) "michael.w.cooney@citi.com"
    ["user_url"]=>
    string(22) "/forums/users/wyckoff/"
    ["user_registered"]=>
    string(19) "2017-08-10 14:07:38"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(7) "wyckoff"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(26009)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

As it’s unlikely your contemplated house is listed with the city as an SRO, you need to find out what it is and get the mortgage based on the building’s legal status (1, 2, or 3+ family).   You could start by going to the DOB website and searching the property address.  I financed a legal 2 family that had been used as an SRO for over 100 years without any issues (but, like you, it did take a few months to get the last guy out before we could close).

housepoor | 13 years and 8 months ago

string(1) "1"
object(WP_User)#5116 (8) {
  ["data"]=>
  object(stdClass)#5143 (12) {
    ["ID"]=>
    string(5) "71781"
    ["user_login"]=>
    string(9) "housepoor"
    ["user_pass"]=>
    string(34) "$P$BZnN5ER9y5nTOH3g4Irm1FYCyvGA2Z1"
    ["user_nicename"]=>
    string(9) "housepoor"
    ["user_email"]=>
    string(25) "jonathanscooper@gmail.com"
    ["user_url"]=>
    string(24) "/forums/users/housepoor/"
    ["user_registered"]=>
    string(19) "2017-08-10 14:30:00"
    ["user_activation_key"]=>
    string(45) "1728671304:$P$Bek7XOwNZX.3S.lAqmzW5.6CejI0ah/"
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(9) "housepoor"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(71781)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

There is one SRO in West Harlem that the owner’s CNH was rescinded when a former tenant claimed harassment. The owner can’t reapply for the CNH for 3 years from the date it was rescinded, and can’t get an Alt 1 to work on the B units until they have the CNH. Now that is a nightmare! And I imagine no bank will touch that these days. I wonder if you can make it a stipulation of the contract that the remaining tenant has to be out and acknowledge that they have not been harassed? Is there a defense from former tenants coming back and claiming harassment (assuming there actually wasn’t harassment…just money to be extorted?).

Augustiner | 13 years and 8 months ago

string(1) "1"
object(WP_User)#5113 (8) {
  ["data"]=>
  object(stdClass)#5144 (12) {
    ["ID"]=>
    string(5) "45573"
    ["user_login"]=>
    string(10) "Augustiner"
    ["user_pass"]=>
    string(34) "$P$B34SD8yEA6Hi8EPJJfH83mCf4GZmmP0"
    ["user_nicename"]=>
    string(10) "augustiner"
    ["user_email"]=>
    string(18) "flo@flat-peach.com"
    ["user_url"]=>
    string(32) "http:///forums/users/augustiner/"
    ["user_registered"]=>
    string(19) "2017-08-10 13:35:10"
    ["user_activation_key"]=>
    string(0) ""
    ["user_status"]=>
    string(1) "0"
    ["display_name"]=>
    string(6) "August"
    ["spam"]=>
    string(1) "0"
    ["deleted"]=>
    string(1) "0"
  }
  ["ID"]=>
  int(45573)
  ["caps"]=>
  array(2) {
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["cap_key"]=>
  string(15) "wp_capabilities"
  ["roles"]=>
  array(2) {
    [0]=>
    string(10) "subscriber"
    [1]=>
    string(15) "bbp_participant"
  }
  ["allcaps"]=>
  array(4) {
    ["read"]=>
    bool(true)
    ["level_0"]=>
    bool(true)
    ["subscriber"]=>
    bool(true)
    ["bbp_participant"]=>
    bool(true)
  }
  ["filter"]=>
  NULL
  ["site_id":"WP_User":private]=>
  int(1)
}

I doubt any lending institution will take the risk of jumping into the SRO adventure with you.
Banks have certain products they offer. There is no lending category for SRO, and most bankers will not even know what that is and you´ll get denied later. Hard cash for horrendous conditions is your only option. But if you don´t do a quick buy/sell it will break your neck.  Generally I hope you know what you are doing
Consider:
– why is the last person still in there. Check in detail what´s up with that. Ask neighbours and so on. Based on my own expericence I would recommend strongly to not sign the contract with a person in it, even if someone says this person will be gone. Or you calculate a risk on your investment anywhere between $ 20.000 to 70.000  (lawsuits, buy out money and so on)
– if you consider changing the zoning and do renovations, you can´t rent the house until you get your “certificate of non harrassment”, which can take up to a year or longer
– consider taxes and other costs for the time your house will be empty
– for a empty house you will have to take out a commercial risk fire insurance, which is around 6k per year
– consider your last “tenant” will not pay any rent, and stall your “Certificate of Harrassment” process with the HPD potentially for years  I would label an SRO as asset category with a great risk. You should have experience, strong nerves and the financial buffer. Taking out a loan for an SRO is financial suicide for most, and the Banks know that.