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Renovating Albany New York real Estate and Albany New York rental properties

By Kevin Clancy

Real Estate Agent with Http://www.clancyrealestate.com

March 19, 2008 03:19 PM

Doing business as an Albany landlord and real estate investor is a challenge. I often describe the difficulties to clients of dealing with the City of Albany. The Albany Water department and building departments are two of the most difficult to deal with. Below is a story of from a local investor trying to inject private capital and sweat equity into a depressed area of Albany. Real Estate has created wealth for many in the Albany market. However, it is not without hard work and pitfalls. In his own words.

"Late last summer I started working on a deal to buy an
abandon 9 unit apartment building in a very bad Albany
neighborhood that is getting state and local money to
fuel its turn around. Apparently only multi million
dollar companies qualify for these subsidies, but
that's just a side bar. As part of the process, the
Zoning Board, recommended I meet with the neighborhood
association before formally presenting my plans to
City Hall.

I naively thought I would be applauded by the group
for rehabilitating a building that in its abandon
state was often the domicile for drug dealers and the
homeless. What happened instead was a half hour
session of outrage over my intent to bring this
building back to life. A vocal minority in the group
berated me for my lack of budgeting knowledge,
inability to manage a building and overall skills as a
business person. The incredible aspect was not the
passion of these few people, convinced that I would
fail. It was the fact that in this entire room of 50
people, only one person could have identified me
before that evening. And yet these few people, none
of whom have renovation or land-lording experience,
took great liberties insulting my intentions to
partake in the redevelopment of "their" neighborhood;
apparently oblivious to the fact the I already own a
same size building and a laundromat only blocks away.

As I stood there, exhausted from a day of working on a
different building, watching the neighborhood
association president wag his finger at me, I briefly
considering picking up my folder and walking out;
abandoning the entire project. Unfortunately, I
decided to stay. After receiving the remainder of my
beating and leaving the room, oddly enough to a good
deal of applause, I was convinced that the worst was
over.

Several months later, after a successful Zoning Board
presentation, we went to the closing table.
Shockingly, there was a problem. The seller had an
$8,000 past due water bill......for a building with no
plumbing. Over a year prior, all of the water supply
lines had been stolen by copper thieves. Having come
up from NYC to close the deal, the seller had no time
to dispute the bill. I was given the $8,000 credit
off the sale price and made responsible for the water
bill which I intended to dispute. Later that day I
called the water department, asked for the bill to be
put in my name and requested a form to dispute the
bill. Finally a break, I thought. A building with
plumbing couldn't have used $8,000 of water in a year.

Upon returning from Christmas, two weeks after the
closing, I realized I hadn't received the bill or the
dispute form. The water department told me to wait
until the January bills went out and call if I still
didn't get it. In late January I got my bill. It was
only for $3,500. Wow, they already reduced the bill I
(again naively) thought. This is great. Upon calling
them I was informed that $4,500 was transferred to my
January tax bill and could not be moved back onto the
water bill. This wouldn't be as big a deal if I
hadn't paid cash for the building. In order to close
on the forth coming mortgage I would have to show paid
tax receipts. I was left with a choice of not paying
my city taxes in hopes I would win my water dispute,
but not being able to take a mortgage or paying the
tax bill to get my money from the bank.

The building I bought is adjacent to an 18 building
gut rehab job by Winn development out of Boston.
There is one building that separates me from this huge
effort. That building, unfortunately, is abandon and
owner by someone one in NYC who could give a crap
about the neighborhood.

Saturday morning a lot of brick fell off the building
next door to mine, crashing to the sidewalk below.
The sidewalk was roped off and a 24 hour a day watch
was kept on the building. Yesterday the Albany Fire
Department contacted me claiming they saw someone
inside my building at night. They asked to be let in
the building to make sure no one was living there. My
manager Chad went right over to let them in.

They left the building assured that no one was living
there, but informed me by phone that I need to hire a
certified engineer and present a remediation plan for
the brick on my building. Later in the day someone
from the Building and Codes Department came to serve a
Stop Work Order. Unable to specify what they want us
to stop (there is currently no work going on) they
proclaimed that there was no way possible that the
building could be in that good a condition unless we'd
been doing work beyond the scope of the demolition and
plumbing permits issued.

Tomorrow afternoon I have to go to City Hall to prove
with pictures taken before the purchase and now, that
we have done nothing other than demolition, cleaning
and the permitted plumbing repairs.

I guess there are several unbelievable aspects to the
story. First, in this supposed banking crisis there
are 3 banks bending over backwards to finance this.
Second, I have yet to have a contractor not show up
for an appointment to estimate work. In fact the
plumber that completed the water supply lines
confessed that he misjudged the amount of material he
needed, to the tune of about $1,000, but absorbed the
cost himself, since it was his error. And finally,
and probably the most unbelievable part, is that when
City put this grand redevelopment plan together, their
goal was to have many private investors, like me, jump
on board on pilot their own projects."