Printed from at 06:34 AM, Oct 24 2016
Talk » Sales » Discussing 'Seeking rent-stabilized/controlled coops/conds'

Seeking rent-stabilized/controlled coops/conds


Now that the world hasn't come to an end, and I know sellers will
be around to close their contracts in 2013, I am celebrating my near
death experience by looking for some rent-stabilized and/or con-
trolled coops and condos to buy, in Manhattan, Queens or Brooklyn.

If anyone knows of any or is brokering some for sale, please e-mail
me at Thank you

why would you want to buy a rent controlled apt? Can't the tenant stay there forever and pass it onto his family? Most of the ones on the market are losing money on a monthly basis.

Check 25 west 13th. I think there are two for sale.

Keith Burkhardt


There were two there after 9/11 for about $50,000. What is there now and at what price?
Please e-mail me that information. Thanks

They're Citi Habitats listings.

ali r.

two studios, asking $250,000 each

they dont sound very appealing at that price, for a number of reasons, but
thanks for the heads up just the same

and happy holidays to all

I think this package is still available:

The market has been quiet. (Some would say for good reason.) Even the self-described "King of Blocks" doesn't have much on his plate:


At $700,000 each asking the apartments are, in my opinion, extraordinarily
overpriced. Thank you just the same for the information, and happy new year.

Newport. On the UES always has a few.

but of course, by definition, they are overpriced. otherwise they would have sold.

Comment removed.

rb345: I agree about the pricing at 505 WEA. On the other hand, the asking price may have been intended as a starting point for discussions between professional investors, not as a line in the sand.

To me, the most daunting aspect of this kind of investment is the information deficit that is almost inherent on the buyer's side. The seller has typically worked for years to expel the tenants by any means available, and has often assembled a detailed profile of each tenant and his/her family. I can only think of a few narrow situations where a purchase might be advantageous:

1) The seller is distressed, or has other reasons to cash out at a fire-sale price;
2) The seller has not been aggressive in pursuing decontrol;
3) The buyer has access to material information that might facilitate eviction or decontrol;
4) The buyer has a special connection to the unit(s) - e.g. a desire to expand into adjacent space by buying out a rent-regulated neighbor.

In our building, the successor sponsor bought the remaining RS/RC units at a deep discount, probably at least 70% below value-if-vacant. Nearly three years later, the vast majority of those units are still rent-regulated. It might take many more years to determine whether the fire-sale price was low enough.

West 81st:

1. most of what you say is correct
2. but I disagree with you about the asking price only being a starting point
3. the overpricing is so extreme that people like me wouldnt even consider making an offer
4. plus some of the apartments being offered for sale may be worth less than zero

5. another important point: if/when the US economy tanks those apts will be for all practical
purposes unsalable except at extraordinarily low prices, as they were throughout the early
to mid-1990's when I was offered a doorman 2-bd at 70th and 2nd with a break-even rent for
$10,000 (1996 or 1997)

rb345: Your "less-than-zero" point (#4) is especially interesting. It's probably safe to assume that the current net cash flow on all six units is negative. A prospective buyer would have access to the exact numbers, although he would still have to guess future changes in rent and expenses. If you assume that the bleeding is permanent, then clearly a unit's value is negative. The key questions in calculating an IRR for this investment are:
1) How long will the owner bleed before realizing the pot of gold? and
2) How much gold will be in the pot if/when the process ends?

Current value-if-vacant is fairly easy to estimate, and you can make a reasonable guess about how that value will change over time. The big unknown is the time factor. I think the reason these assets have traded so erratically - anywhere from 20% to 45% of ViV, when there's any market at all - is that valuation is driven mostly by the assumptions a buyer plugs into his model. The fundamentals are simple, but they are overwhelmed by guesses about tenant behavior/mortality, legislative action in Albany and other variables.

That said, you're right about 505 WEA. I can't imagine a reasonable set of assumptions that would justify the asking price, which appears to be at least 50% of ViV.


1. an attorney friend of mine once referred an attorney friend of his to me for help
2. attorney #2 bought a rent-controlled coop SM 97 tenant in mid 80's brownstone off Riverside Dr.
3. price was $100,000; annual NCF was about $10,000
4. when SM tenant turned 105 he moved into a nursing home
5. landlord-tenant attorney grandson 27 then appeared as his successor tenant at same rent
6. offered owner $20,000 for the apt
7. owner couldnt even abandon coop to Coop or just not pay because as attorney he had means to pay maintenance


8. on my advise owner went to see Dr. Kevorkian

i'm sure he could have sold the same rent controlled coop for at least the price he paid for it + maintenance, and probably even a small profit after all is said and done.
That being said... the key is to buy blocks...


1. he had a SM attorney tenant about 27
2. paying about $400/month for a 2-bd brownstone apt
3. off Riverside Drive in the low 80's
4. you cant sell such an apartment
5. you can only pay someone to take it off of your hands

6. if the attorney grandson has children, the owner
could be looking at another 100 years of NCF of $10,000
per year or more

What keeps him from having some means-free third party take it off his hands? Law, pride, or hope that the 27yo will eventually leave?


Calculated in accordance with mean expected yield - the outcome of all conceivable probablities
scaled for their respective likelihoods, the apartment I referred to is worth substantially less than zero.

A 27 year old paying $400/month in late 1990's dollars for a 2-bd brownstone apt. off Riverside Drive
in the low eighties is extremely unliklely to voluntarily leave the apartment, and more than likely to
have children who become its successor tenants, thereby consigning the apt. to its rent-regulated status
for close to 100 years, unless rent control is ended before then, or possibly more than 100 years since
life ex[ectancy keeps increasing and the 27 year old's children might have children who in turn also
become successor tenants.

While I wouldn't mind waiting 150-200 years to get possession of an apartment, and would definitley buy
it if doing so would guarantee I would be here in 200 years, the odds of that are currently under 50%.

isn't there a statutory annual increase of approximately 9%?

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RB: fine, it is

RB: fine, it will bleed money indefinitely.

However, why not pay some means-free third party to take? E.g., find someone near bankruptcy. Pay them $20K to take ownership. They spend the $20K, they spend the rent, they don't pay the taxes, etc.

My question is what happens to a means-free owner? And what keeps the current owner from getting out from the $10K annual NCF through some such mechanism?


1. an assignment of ownership of an apartment which has a demonstrably negative net worth to
a substantively judgment proof new owner who lacks the financial means and intent to pay
future monthly charges would constitute a breach of the assigning owner's duties of good
faith and fair dealing - and might also be seen for what it is - a fraudlent dump-off,
and would likely be annulled by a court if it were presented with such facts

2. also, because of regulations promulgated by the NYS Attorney General's at 18 or 22 NYCRR
section 18.3(w)(1)-w(ii) - its Unsold Share regulations - the Sponsor of a Coop remains
liable in perpetuity for maintenance charges that a Holder of Unsold Shares - which owners
of stabilized and controlled coops are - fails to pay the Coop for any reason whatsoever

3. as compensation for that burden, the Sponsor also subrogates to the rights of the Coop vs.
its shareholder to collect unpaid dues

4. so in the scenario you have hypothesized, the Coop's Sponsor, who usually has smart knowledge-
able attorneys, would have the right to and would sue the assigning owner, who would remain
liable for accrued and future monthly charges even if his/her assignmnent could not be reversed


Forgot to add, in the specific scenario you hypothesized, a bankrupty trustee
might also be able to successfully annul the assignment under the various avoid-
ance powers granted such trustees in Bankruptcy Code section 544-548

Got it, thanks.

You're welcome


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