The story of a deal that is not over yet. Like an Arabic movie on Friday, only better. In September 2016…

The story of a deal that is not over yet. Like an Arab movie on Friday, only better.

In September 2016 we reached a seller at Park Slope who wanted to sell her 2-family home (a two-apartment house), 16 feet wide for $ 1.9 million. Park Slope is an upscale neighborhood in Brooklyn and the price reflected the market price of the property, only our experience showed something very interesting - since buyers in the neighborhood are upper class, usually have no interest or need for a tenant so they search, and pay more, for 1 family, private homes That they are one residential unit. At that time, a house like this was sold on the same street for 3.95 million, and we estimated that if we increased the building but reduced the number of units, we would be able to reach a price of 4.25-4.2 million. We found investors, a bank and executed. In August 2018 the house was sold for 4.2 million, and holds a record price in the area for a house of this type to this day. The purchase offer came months before the construction was completed and the buyers were in a binding contract for a long time, but at the end they received a product of the highest standard, were satisfied, and later the agent who accompanied them became an investor in one of our income-producing properties. But that's not the story, just the introduction.

With this knowledge and confidence I went in February to see another property in Slope Park. The property was for sale publicly, available to the general public. My experience is not. SRO building, has been renamed What It Means, 19 feet wide, 4 stories in prime location. The price - 1.899 million. I toured the building for 10 minutes, at the end of the tour I told the agent that by the end of the day he would get a full price offer. A wide smile spread across his face. "I only have one more question please, will they provide CONH?"

How many have asked themselves what the hell is CONH? So here is the full explanation plus you will learn something new and important. Let's start with what SRO is. SRO or Rooming House These are buildings set up for rent of rooms, not apartments, and usually share a shared bathroom or kitchen. The problem with them is that the law stipulates that municipal supervision over them is high and their designation cannot be changed without the approval of the municipality. The certificate is called Certificate of none harassment or CONH for short. The thing is that it takes a year to get such a permit, and if you refuse you will not be able to change the designation and the next application can only be submitted three years later. In short a mess, but if you succeed, there is a beauty of a deal.

Where were we? Ah, will she bring CONH. The agent tells me she turned to an attorney who would handle the matter he asked her for thousands of dollars to file an application, and this bank smeared a smile on my face, but only inside because I did not want to reveal cards. Why a smile on the inside? Because during the years I worked, I learned, among other things, to submit applications to CONH myself, and that's not even a big deal.

Towards the end of the day I submitted a full price offer with a bonus - as a buyer I take it upon myself to submit the application to CONH on behalf of the seller and do not forget to mention that I am actually saving her thousands of dollars. The contract provided the closure upon receipt of the certificate. On the one hand it requires it to cooperate, on the other hand if the municipality does not approve we can exit the deal without penalty. Cover under not bad. The offer was too good to refuse and she accepted, the contract was signed, and the application was submitted. End of Phase A.

Phase B - Phase II of the program, find someone who will buy the contract from us. A couple of investors took an interest, signed a transfer agreement for a very nice profit for us, put a down payment that replaced ours and now we no longer even have equity in the deal. Level of risk in the transaction? zero.

And now waiting for the municipality. And wait. And wait. That's how 10 months.

Two months before the end of the year it takes the municipality to give an answer the rush started. A rumor came from the seller's agent that she had changed her mind, her daughter and boyfriend had intervened and they did not want to sell. "What do you mean do not want? There is a contract" I asked "I really do not know what to tell you" the agent replies, "they barely communicate with me too". A few weeks later the mother transferred ownership of the property to the daughter, without our consent, without notice and did not even return the down payment to the contract they gave. In addition the municipality stopped handling CONH as there was a change of ownership and it was not updated in the application file.

Al is a litigator. An attorney who specializes in court appearances. In the U.S., or at least in New York, separation is acceptable, and the attorney who made the contract will not be the one to defend him in court. We presented our contract and claims, agreed we were right, formulated a strategy, filed a lawsuit , We put LP on the building that would not be able to transfer ownership to a third party and the show started.

Our argument was that we met all the terms of the contract and deed is still valid, the transfer of ownership is illegal if so and we asked the court to return the situation to its former. The seller's response was that their agent was wrong for all the reasons they couldn't prove. Price was wrong, or told them stories. A collection of excuses. What they didn't know was that since they cut him off but I kept in good contact with him he started to cooperate with us, provided us with all the alternative correspondence and contracts in front of us and in fact we could prove that all their claims were wrong and not only that, even if they were true, they should be sued , But cancellation of the contract is not part of it.

The judge listened, hinting to the seller that her situation was not encouraging and declaring that before making a decision she would give the seller an opportunity to make a compromise offer.
The seller's compromise offer was that we pay her double. 10 points for those who guess correctly what was your answer. Our counter-offer was that they would pay us a significant amount that we would release the contract, for a moment they agreed, but then they backed down, gave a very low offer which we refused and the issue went back to court.

About two weeks ago, we made a decision. The court accepted all of our claims, held that the transfer of the contract is void and that the contract is valid. He also demands that he set a time for closing. But wait, CONH we don't have yet. Yesterday, we sent an email to the judge, and exceptionally we received a reply that day - you are right, she is also obligated to let you finish the approval process. The victory is complete.

What next do you ask? There are several options. Is some with a reasonable chance they will lie - the first they will pay us to leave. "Their attorney has already contacted ours and noted that they understand they will have to come up with a more significant offer, a second option would be to complete the approval process with the municipality and complete the purchase as we planned from the beginning and a third option is not to wait for approval, purchase the property immediately and finish fireplace. about. At the moment all options are being considered and we will decide according to the progress of things.

Shabbat Shalom.

The first 4 pictures are of 378 Douglas, the property sold for 4.2 million, the next 3 are of the property that is in court and the last is just my company logo. How beautiful is he? Painted it one of my facts, I liked it and it became a logo.