NYC Multi - Converting Stabilized Units to Free Market

Full disclosure, I’m new to NYC multi.

What are all the pathways available to convert rent stabilized units to free market in NYC? I’ve read or heard about a couple ways: (A) knock down walls of a vacant, RS unit to join a FM unit into one, larger FM unit (2 units to 1); (B) restructure two adjacent units, one vacant RS and one vacant FM by exchanging SF between the two units (give / take a bedroom from a RS unit).

  1. Are the above options legitimate pathways to converting RS units to FM?

  2. Are there any other ways available?

  3. What are the risks involved with executing a unit conversion business plan? I would think the most apparent is that the city won’t recognize the unit as FM, leaving you stuck with a big renovation bill and hardly any income to show for it. How material is that risk? Would be great to hear any and all anecdotes for when things didn’t go as planned.

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