It's Electric

It takes years to learn the construction side of real estate.

If you have no experience, I recommend the first thing you do when inspecting a building is head to the electric meters and check out the electrical services. If they are new, great. If they are old, this may be a deal breaker.  By old we mean older than about 1985.  I won't get into amps and voltage supply but they make a huge difference on how many apartments or condos you can have and the holding costs of the building while waiting to get converted.

A turnover in ownership will require the building to be up to code. It could take ConEd a year or more to schedule an appointment to come in and update the electrical service. Check with ConEd before making an offer or at least put it in as a contingency in the offer letter.

If they can guarantee a date, great, make the offer. If not, walk away. You may never be able to have simple things such as air conditioning or luxury appliances without risk of blowing fuses in each apartment.

Proposal: 22 West 90th Street

As I was getting to know my investors (and they getting to know me) I presented each investment package in a formal plan. See attached Package.

Proposal: 542 West 110th Street

Here is actual correspondence between myself and an investor


*******,

I need to go see the attached property before i can give my opinion,
however this was forwarded to me by my Business Partner.   I will take
pictures upon your request.

In order to stay within your scope a single family home would be a
great option. the profits would be over $1 million; however, with the
air rights/FAR, profit potential and also based on location near
Columbia University, you can't go wrong as a hotel.

See attached and below:

Price   $3,650,000
Real Estate Taxes (per annum)    $9,285

Property Details
Type     Multi-Family Townhouse
Service Level    Voice Intercom
Block / Lot      1881 / 53
Age / Built      Post-war / 1988
Square Feet(Approximate)         5065
Lot Size         25'x70'
Built Size       25'x70'
Building Size    4 Floors / 4 Apts.
Building Access  Walk-up

This is a  25' wide, four (4) story modern townhouse built in 1988 by
Smith and Thompson Architects. Currently configured as 4 floor-through
apartments and a penthouse studio, the building could easily be
converted to a single family residence or expanded to accommodate a
larger structure. Plans have been prepared to construct two additional
stories and the building is framed to allow for the addition of an
elevator.

Alternate plans have been approved pursuant to NYC’s quality housing
regulations to construct a 13 story building which would expand the
maximum FAR of 7.20 or approx. 12,765 Sq. Ft.. The property benefits
from a tremendous amount of light, two south facing gardens, a
significant supply of excess air-rights, and excellent access to all
forms of transportation. The property will be delivered vacant and is
ideal for either conversion to a single family home or redevelopment
to a larger building.

Proposal: 228 E 75th

From: Rob Licopoli
Date: Tue, Sep 25, 2012 at 3:07 PM
Subject: 228 E 7th Street, Manhattan
To: *********


**********,

I've sent a seperate link with exterior photos. 228 E 75th is also in my neighborhood.  It is 20' wide with 10 apartments, 1 rent stabilized.  for an asking price of $3.3M. Expiration dates are favorable.  If this is being considered for a single family conversion then advice from an experienced RE attorney is recommended.

The acquisition costs is $3.3 million and conversion cost is less than $1.4 million w/o an elevator and 1.65 with an elevator.  The total investment of $4.5 million with a potential profit of $2.5 million.  

This is a gold mine!

Property Details

Type Income Property Low-rise Service Level Voice Intercom Block / Lot 1429 / 35 Age / Built Pre-war / 1910 Square Feet(Approximate) 5800 Lot Size 20'x100' Building Size 4 Floors / 10 Apts. Building Access Walk-up

This is a twenty (20) foot wide, four (4) story walk-up building containing ten (10) residential units, of which eight (8) units are one-bedrooms and two (2) are studios. One ground floor one-bedroom has full garden access. There are nine (9) Free Market units and one (1) Rent Stabilized unit. All units are currently occupied. The building measures approximately 5,800 square feet and has about 3,374 square feet of air rights remaining. 

The average rent per square foot is $42, which is under market, giving an investor long-term upside along with immediate cash flow. A new boiler (oil) was installed in 2001 and a new roof in 2011. Property is located near all Upper East Side transportation as well as the future 2nd Avenue Subway.

To Be An Agent or Not To Be?

In New York City, be a real estate agent. You will have exclusive access to real estate listings and owner information that can only be accessed through a brokerage.

To do this, look on craigslist for brokerages that are seeking to train agents and offer an incentive to do so. Make sure you don't have to pay a fee. At worst, pay the state required fees, but in some cases, brokerages will do this for you. Make sure you work out the hours they will require you to work before you commit. Nothing is truly free.

I don't recommend being an agent in any other state. You are restricted by the laws of all the states, but in NYC it's so restrictive that agents will take you for a ride in order to present you with a property. You can lose up to 6% of a deal or more if you have to go through another agent.