The short version
- We buy two-family homes, small apartment buildings, and mixed-use properties.
- Tenants can stay, and existing leases generally continue.
- Illegal units can block a traditional sale. We buy with them in place.
- We price on rents, expenses, condition, and legal status.
- Talk to your accountant about capital gains, depreciation, and 1031 exchanges.
Multifamily properties are a different kind of sale
Selling a two-family house or a small apartment building isn't like selling a typical single-family home. Buyers look at the rents, the leases, the condition of each unit, the legal status of the units, and the operating costs, not just the kitchen and the curb appeal. Lenders look at those same things, and they can be strict about properties with vacancies, nonpaying tenants, or units that don't match the certificate of occupancy.
We buy two-family houses, three- and four-unit buildings, mixed-use buildings with apartments, and small apartment properties in Lindenhurst and throughout the Town of Babylon. Tenants in place are fine.
Types of properties we buy
- Legal two-family houses
- One-family houses with an accessory apartment, legal or not
- Three- and four-family buildings
- Mixed-use buildings with storefronts and apartments above
- Small apartment buildings
- Houses that were converted into multiple units over time
Why landlords sell multifamily properties
- Rising property taxes, insurance, and maintenance costs
- Tenant problems, including nonpayment or long eviction cases
- Major repairs coming due, like roofs, boilers, or electrical upgrades
- Changes in tenant laws that make being a landlord harder
- Retirement or a desire to simplify
- An inherited building that the family doesn't want to manage
- A partnership or family ownership that needs to be divided
What buyers look at
Whether you sell to us or to someone else, a multifamily buyer will want to understand:
Income
What does each unit rent for? Are tenants paying on time? Are there vacancies? How do the rents compare to the market?
Leases
How long are the leases? Are tenants month-to-month? Are there any concessions or unusual terms?
Expenses
What are the property taxes, insurance, utilities, water and sewer, and maintenance costs? Which utilities do tenants pay, and which does the owner pay?
Condition
What shape is each unit in? How old are the roof, heating system, hot water, and electrical service? Are there separate meters?
Legal status
Does the certificate of occupancy match the number of units? Are rental permits in place where required? Are there open violations?
Legal vs. illegal units
This is one of the biggest issues in multifamily sales on Long Island. Many houses in the Town of Babylon have extra units that were added over the years without permits. A basement apartment, an attic apartment, or a garage converted to a living space may be generating rent, but it isn't legal.
That creates problems in a traditional sale:
- Lenders may not count income from illegal units
- Appraisers may not value the property as a multifamily
- Buyers' attorneys may require the unit to be removed or legalized
- The buyer may face enforcement action after closing
Inside the Village of Lindenhurst, permits and rental registrations are handled by the Village. In North Lindenhurst, Copiague, West Babylon, and other unincorporated areas, the Town of Babylon handles them. The Villages of Babylon and Amityville have their own offices.
We buy properties with illegal units. We'll price the property based on what it legally is and what it would take to legalize or remove the unit, and we take on that work after closing. Talk to your attorney about disclosure obligations and how tenants in an illegal unit should be handled.
Tenants in place
When you sell with tenants, existing leases generally continue under the new owner. Security deposits transfer at closing, and your attorney handles the paperwork. We'll give proper notice for a single visit to see the units, and we'll be respectful of tenants' homes and schedules.
If a tenant isn't paying, or there's a case in housing court, we can still buy. It affects the price, because we'll be taking on the time and cost of resolving it, but it doesn't stop the sale.
Rent regulations
Most small multifamily properties in the Town of Babylon aren't subject to rent stabilization, but New York's tenant protection laws have changed significantly in recent years, and some rules apply statewide, including rules about security deposits, late fees, and evictions. If you're not sure which rules apply to your building, talk to your attorney.
What we need to make an offer
- A list of units with current rents and lease end dates
- Security deposit amounts
- Which utilities the owner pays
- Recent tax bills and insurance costs
- Any known repair issues
- The current certificate of occupancy, if you have it
If you don't have it all organized, that's fine. We'll work from what you have.
How we price a multifamily property
We look at the property two ways. First, we look at its income: what the rents are, what they could be, and what it costs to operate. Second, we look at what similar properties have sold for nearby. We then subtract the cost of needed repairs, legalization or removal of illegal units, and any tenant issues. Our written offer will explain how we arrived at the number.
Mixed-use buildings
Mixed-use buildings, with commercial space on the ground floor and apartments upstairs, are common along Wellwood Avenue, Montauk Highway, and other main roads. These properties involve both residential and commercial leases and zoning. We'll look at both. See our commercial property page for more.
Taxes on the sale of investment property
Selling a rental property can trigger capital gains tax and depreciation recapture. Some sellers use a 1031 exchange to defer taxes by reinvesting in another property. Talk to your accountant before you sell, so you understand the tax impact and can plan around it.
When to list instead
If your building is legal, well maintained, fully leased at market rents, and easy to finance, you may get a strong price by listing it with a broker who specializes in investment property. That process often takes longer and involves more due diligence, but it can make sense. We'll tell you honestly if we think listing is your better option.
How the sale works
- Send us the address and basic information about the units.
- We schedule a visit with proper notice to tenants.
- We send a written offer.
- Your attorney reviews the contract, including how leases and deposits transfer.
- We close on your timeline.
After the sale
Once we close, we take over as landlord. We'll introduce ourselves to tenants, give them contact information for rent and repairs, and honor existing leases. You won't get any more middle-of-the-night calls.
Questions landlords ask
Can I sell if one unit is vacant?
Yes. Vacancies affect income, and we'll factor that in, but they don't stop a sale.
Do I need to fix code violations first?
No. We can buy with open violations and handle them after closing, subject to anything your attorney says must be addressed.
Will my tenants have to move out?
Existing leases generally continue. We'll follow the leases and the law.
Can you buy several properties at once?
Yes. If you own more than one rental in the area, ask us about buying them together.
Common repairs in older multifamily properties
Small multifamily buildings in our area are often decades old, and the repairs that come due tend to be expensive:
- Roofs, which cover more area and cost more on larger buildings
- Boilers and heating systems serving multiple units
- Electrical service upgrades to support modern use
- Separate metering for units that share utilities
- Fire safety upgrades, including smoke and carbon monoxide detection and fire separations
- Stairs, railings, and egress windows
- Plumbing stacks and water lines
- Kitchens and baths in each unit
When several of these are due at once, the cost can be substantial, especially on top of property taxes and insurance. We price these items into our offer so you don't have to fund them.
Turning over units
Every time a tenant moves out, there's cleaning, painting, repairs, advertising, and screening. In a small building, a single vacancy can wipe out a big share of the year's income. Many small landlords reach a point where they'd rather not go through another turnover. If you have a unit coming vacant soon, that can be a natural time to sell.
Separating a two-family into one sale or two
Occasionally, owners ask whether they can sell each unit separately. In most cases, a two-family house is a single tax lot and can't simply be split into two properties without converting it into condominiums, which is a legal process with costs and approvals. For most owners, selling the property as a whole is far simpler.
Insurance for multifamily properties
Landlord insurance for multifamily buildings is different from a standard homeowner's policy and can be more expensive, especially near the water or for older buildings. If your insurer has non-renewed your policy, raised your premium sharply, or required repairs to keep coverage, that can be a strong reason to sell. Let us know, so we can plan for insurance on our side at closing.
Family-owned buildings
Many two-family houses in the Town of Babylon have been in the same family for decades, sometimes with relatives living in one unit and renting the other. When the older generation passes or moves, the building may go to several heirs. Selling is often the simplest way to divide that inheritance fairly. We can work with all the owners, and with the estate if probate is involved.
Recordkeeping that makes a sale easier
Landlords who keep good records tend to get smoother sales. Useful records include signed leases and renewals, rent payment histories, deposit records, repair invoices, utility bills, insurance policies, and correspondence with the Village or Town. If your records are incomplete, don't worry. We can still buy, but anything you can provide helps us give you a more accurate offer.
Selling one building from a larger portfolio
Some owners have several rentals and want to sell only the most troublesome one, the building with the worst repairs, the toughest tenant, or the illegal unit. That can be a smart way to simplify a portfolio while keeping the properties that perform well. We're happy to buy a single property even if you own others nearby.
How the sale works
Tell us about the house
Call or fill out the form. A few basics about the property and your timeline.
We walk through it once
One visit, at a time that works for you. No open houses, no strangers poking around.
Get a written offer
A real number, in writing, with the math explained. No pressure to say yes.
Close on your date
Attorneys handle the closing. You get paid at the closing table.
Questions
Do you need a rent roll?
It helps. A simple list of units, rents, and lease dates is enough.
Will you keep my tenants?
We'll talk through our plans with you.
Do you buy mixed-use buildings?
Yes. See our commercial page too.