Hi everyone,I am going to be moving to New York with my family next year for grad school, targeting to live in Brooklyn/Queens, and hopefully within a reasonable commute distance (30-45 mins public transit) to Manhattan. My goal is to find a 2-4 unit multifamily to house hack, preferably one that needs quite a bit of work so I can build in some sweat equity and get rents to cover at least my living expenses. If can eek out some positive cash flow while I'm there that would be amazing but I think a bit unreasonable. Any thoughts on:which neighborhoods here present a good value for house-hacking?considering I'm planning on living there with kids, which are areas to avoid regardless of whether there is a good deal?any area-specific information I should be aware of when running calculations (inclusion/exclusion of certain utilities in rent, special tax considerations, rent control issues, etc?Lastly, any real estate agents, wholesalers, or bird dogs who'd be interested in connecting on this I'd love to chat with you. I know it's a ways off but I have a feeling it'll take me some time to try and find a good deal in the area, so any help/connections I can find would be HUGELY appreciated. Thanks in advance!

Here's a six family that sold recently in a pretty good neighborhood in Queenshttp://www.welcomehomerealestate.biz/index.cfm?pag...As I understand it, this property closed for $1.55M. While the overall annual rent roll right now is low $58k, I would imagine you could easily increase NOI by 50% or more over a period of 3-5 years if you were diligent about turning over the units. Getting tenants out in NYC is NO SMALL task, since the building is rent regulated. BUT, making deals with tenants to turnover units is the REAL sweat equity here in NYC. The purchase strategy would need to include those costs (i.e. $50k per unit to buy-out and rehab each unit). In 2011 I purchased a 6 family building in a slightly better location for $850k, the annual rent roll was $82k. Now, the annual rent roll is $108k, a 30% increase and one of the units is occupied by my mom who pays NO rent.NYC is a long game.

@Chad Eatinger There's a lot to unpack in this thread, and I'd be happy to have a more in-depth conversation, but a few quick thoughts. I live and invest in Brooklyn, so what I say is only applicable to here though I imagine it probably applies in the more desirable areas of Queens (Astoria, LIC, Woodside, Sunnyside, Ridgewood, etc) as well.Basically, at your budget, what you're looking for (living rent-free within 30-45 minutes of Manhattan) is not going to happen -- at least not in Brooklyn. Jersey might be a better bet, though I have no experience there.If your budget is $1MM, I'm assuming you have around 250K in capital to work with? I'm also assuming you'll be living in 1 unit entirely with at least 2, if not 3 bedrooms. There's literally going to be nothing you can afford on that budget with 3-4 units that's within 30-45 minutes of NYU. Not going to happen. Best case, you'd probably be able to pay a bit less monthly by buying than you would by renting a similar unit, but you'd have to decide whether that's worth the frictional costs and capital deployment for a place you're only going to live for 2 years (my guess --- it won't be). You'll also be more like 45 mins-1 hour away from NYU, if not more.Anything on the West side of Prospect Park north of Sunset Park is going to be unaffordable.There are 2 units in the low $1MM range in Flatbush or Bed Stuy or Bushwick (which are probably 45 mins-1 hr away from NYU on a good day) -- your monthly expense would be in the $5K range and you'd maybe get $2500 from the other unit. You can probably buy something cheaper -- 850K-900K but it would require 50-100K of work and probably be out of your budget. And ultimately you're paying more cash and still getting the same rents. It's just not really financially feasible to house-hack a duplex with a family and break even.You can get a 3 (or maybe a 4) unit place for $1.2-$1.4MM, maybe cheaper if it's a fixer upper but again, doesn't seem to be in your price range. In those cases you can probably get to a point where you end up negatively cash flowing $1000-1500, which is not a bad "rent" for a 2 or 3 bedroom.Other thoughts:1. Assuming you're not an all-cash buyer, off-market, foreclosure/REO is a pipe dream, at least in Brooklyn. So forget about that. You're not going to find a way to "get in on the cheap", not here.2. Looking for something that "needs quite a bit of work" to build sweat equity obviously requires more capital and will lower the purchase price you can get unless you're planning on going the hard money route which if you're inexperienced is a bad idea. For example, if you have 250K but you're going to need $100K to rehab the place, all of a sudden you can only really afford a $600K property.3. L line shutdown isn't going to make properties along that line any more affordable. Owners aren't dumb, they aren't going to panic over a temporary shut down.4. Some answers to questions --- anything 4 units and below won't be rent-stabilized unless the building has a tax abatement on it. Heat and hot water is often paid by the owner, especially in older buildings, but some newer construction will have separate boilers/water heaters. Water and common electric (hallways, etc) are paid by the owner.Not trying to be a Debbie Downer, just trying to give you the realistic view.

@Chad Eatinger Nice, I went to Stern for my MBA as well. You'll have a blast (and learn a little too). I hear what you're saying when you talk about throwing money away on rent. I used to think about it the same way and bought I bought an apartment in NYC as a result. I'm actually selling it now and renting elsewhere. In my mind, the key is net cash flow...as opposed to avoiding rent, but the appreciation potential in the NYC area is tough to beat.

@Chad Eatinger it is possible with your budget but it really does depend on the neighborhood in Brooklyn or Queens. I think your strategy of buying and renovating is the way to go (and maybe the only way to go) if your goal is have your tenants cover the mortgage and expenses. Cap rates are low in NYC so you should be focusing on three and four unit buildings to ensure that your tenants cover your costs (my tenants in my two unit in Astoria do not cover all of my expenses), which will be more difficult. For specific neighborhoods in Queens that are close to Manhattan and that may be within your budget based on my recent intel, consider (in addition to Jackson Heights), Woodside and maybe Sunnyside. I suspect with your budget that it may be very difficult (though maybe not impossible) to find a building in Astoria or Long Island City.I'm not as well versed in Brooklyn but to Marcy's point, the L train is supposed to be shutting down in Manhattan for repairs for 18 months starting in (I believe) 2019. This will make the commute from the Brooklyn neighborhoods of Williamsburg and Bushwick, which are on the L line, more difficult. Like many investors, I'm curious as to how this will affect the various real estate markets and have my own theories. Specific blocks matter, maybe more than in other markets, so you really should plan on a heavy boots on the ground analysis. For example, there are blocks in Astoria, considered by many to be one of the best Queens neighborhoods (I'm of course biased but agree with that perspective), that I wouldn't live in and others where I avoid walking. As you're looking online before visiting, try to get a sense of pricing in a particular neighborhood as it relates to proximity to subway stops and specific subway lines, above-ground subways and parks. Though there are always exceptions, you'll generally find that there are more stores and restaurants closer to subway stops. Finally, if you're looking off market or for a foreclosure, etc., you should be ready for a lot of competition in NYC (especially if you're looking for a deal) so get ready to hustle. Feel free to message me if I can be useful...good luck.

Look into Jackson Heights Queens, 25 min into midtown. 2 families around 850-1.1 3 families 1.3 and up. Jackson Heights has 5 train lines, great food,and your close to Astoria for night life,plus very family friendly. PM me is you have any other questions.

So not $2M, probably closer to $1M or a tiny bit over, though I’m looking more for off-market or foreclosure/reo/short sale to keep the purchase price down as low as possible. As for schools, my kids are now nearly 2 and 3 years old, so I’m not terribly worried about schools just yet. I’m planning on living there for two years while I fix it up and rent it out, and hope to move out and fully rent it after I graduate (2 year program) which is when I’ll really need to start worrying about school. Hope that helps and thanks in advance for the feedback.

What's your budget and how old will your kids be? Your budget is going to determine a lot of what's possible. Next, you have to figure out schooling for your kids, which in NYC isn't going to be so simple. I'd try to figure out those things first.

Lots of good responses here. I've lived in Brooklyn for the past 7 years, so I can speak to some areas. With a $1MM dollar budget, you're going to be hard-pressed to find anything more than 1bd (or small 2bd) in Williamsburg, Greenpoint, Dumbo, Brooklyn Heights, Cobble Hill, Fort Greene, Boerum Hill and Park Slope. So you'll need to go outside of those prime areas. This means a significantly longer commute to Manhattan. Where is grad school? If lower Manhattan, south Brooklyn may work. If upper Manhattan (i.e. Columbia), you're looking at an hour and a half. You can find multis further south of prospect park for less than a $1mm. Sunset Park and Bay Ridge are good areas. The further east you go from there, the cheaper places get.I guess the question is: do you want to spend your two years on the outskirts of NYC or in NJ, potentially in questionable neighborhoods, with long commutes just to have an investment there? It might be worth investing in cash flow properties in other cities and using the proceeds to subsidize your rent in a convenient NYC neighborhood.

BTW, the L-Train shutdown will definitely affect commuters, but it won't change rents/property values, imo because it will open again, and be BETTER. People were buying at 96th St and 2nd the day the first article hit the newspaper about a new subway line. As mentioned prior by @Amit Kal, NYC is a LONG game. And commuters in NY adapt quickly.

The five boroughs are going to be extremely difficult with that budget and timeline. Deals like that are few and far between. You'll also need to budget a good amount of cash for renovations. I would highly recommend looking in NJ in areas just outside of the city and along transit lines like Rutherford, Montclair, Garfield, etc. These areas and BK are equidistant from Manhattan, but the price points in NJ are less than half.

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Updated almost 7 years ago, 04/26/2018

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Chad EatingerPoster

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Brooklyn, NY

Starting Out

House Hacking a Multifamily in Brooklyn? Possible to break even?

Chad EatingerPoster

Pro Member

Brooklyn, NY

Posted April 16, 2018 15:26

Hi everyone,

I am going to be moving to New York with my family next year for grad school, targeting to live in Brooklyn/Queens, and hopefully within a reasonable commute distance (30-45 mins public transit) to Manhattan.

My goal is to find a 2-4 unit multifamily to house hack, preferably one that needs quite a bit of work so I can build in some sweat equity and get rents to cover at least my living expenses. If can eek out some positive cash flow while I'm there that would be amazing but I think a bit unreasonable.

Any thoughts on:

which neighborhoods here present a good value for house-hacking?
considering I'm planning on living there with kids, which are areas to avoid regardless of whether there is a good deal?
any area-specific information I should be aware of when running calculations (inclusion/exclusion of certain utilities in rent, special tax considerations, rent control issues, etc?

Lastly, any real estate agents, wholesalers, or bird dogs who'd be interested in connecting on this I'd love to chat with you. I know it's a ways off but I have a feeling it'll take me some time to try and find a good deal in the area, so any help/connections I can find would be HUGELY appreciated. Thanks in advance!

Chad Eatinger

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