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More on S.R.O.

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More on S.R.O.

Postby <JeffersonL> » Mon Mar 18, 2002 1:21 am

The c of o states the building is a Class B 1 fam dwelling w/ 12 furnished rooms. Each room averages $300 monthly, the apt. is $1400 a month. The building makes $5000 a month. The price is $230000. The owner said he would hold the mortgage w/ $50000 down @ 8 1/2%. Thus princ plus interest would be around $1600. Expenses (insurance, taxes, electric, fuel, etc.) run about $1400. I would be left w/ around $2000. I plan to call DCHR tomorrow to see if i can get some info on stabilization and what the rents are legally to see if its worth it. I checked the link cranky tenant gave me but it dosnt come up there as rent stabilized. I appreciate the input. My email address is JeffersonLstop@aol.com if anyone has any input but prefers not to post. Thank you. JeffersonLstop@aol.com

Re: More on S.R.O.

Postby TenantNet » Mon Mar 18, 2002 9:57 am

Whether or not any units in any building are subject to stabilization is a matter of law and not whether the units show up in any list as registered. Usually, SRO units are stabilized. An old rule of thimb was that a building's selling price might be six times the rent roll. Of course there are many other factors, but using that, then the annual rent roll would be $60,000. Six times that is $300,000, so the price (by this standard) should be about $1.8m. Before you buy, see how the building fares under the requirements of Local Law 19 (re harassment). Would recommend you consult with an experienced broker. And if you really want to avoid problems, check with the West Side SRO Law Project. They represent tenants, but can probably give you a good idea what difficulties you might face if you really want to know everything prior to jumping in.
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