House Hacking in Brooklyn or The Bronx?

Question

So I thought I had it all together and did my research. My plan is to purchase a multifamily in Brooklyn. I’m looking on Flatbush, East Flatbush, Bed Sty, and Crown Heights. My thought was to have the second unit subside my mortgage (no way in NYC would a two family in my prices range pay my whole mortgage) and use the savings to start investing in a couple years. Most likely outside of NYC where my money can go much further.

However, I’m talking to some newbie investors who are starting off like me - house hacking with the intention of buying another property later - and people are telling me I should be looking at The Bronx and Brooklyn is “dried up”. As in prices are already sky high and deals are better in The Bronx.

Are there any seasoned NYC investors that can weigh in with your opinion? Are the areas I’m looking at too far out? Will I most likely not get renters soon? Would love to hear people’s thoughts.

Selena Williams · Answer

@Scott Wolf thanks! And you’re right. I have a realtor for Brooklyn but I need to get one for The Bronx as well so I can clearly see my options.

Ley Nezifort · Answer

@Selena Williams I’m sorry to say, but you might have to take your talents to Jersey; that’s what my partner and I ended up doing m. One word : Higher Yield

Okey Onyebuchi · Answer

@Selena Williams

I'd suggest looking into fixer uppers. Turn key properties will most likely be priced on the high end and it'll be difficult to get cash flow.  Value add properties is where you'd get some value.

East Flatbush is a good option. Especially if you're close to the train. You're still about a little less than an hour from midtown.  I just bought a house there so I'm a believer.  Bed-Stuy is going to be difficult as it's already priced on the high side.  East NY has potential, depending on the area.

I've heard about deals in the Bronx but I haven't invested there. It's on my horizon however. Let me know what you find.

Good luck.

Scott Wolf · Answer

@Selena Williams, I think there are better deals to be had in the Bronx but, as with everything, this will come down to a property by property comparison.  You need to get a realtor on your side in both the Bronx & Brooklyn, and get some hard numbers to run an analysis.

Best of luck!

Ahmed Saad · Answer

Hi Selena,

It is very difficult to house hack in Brooklyn, but it’s possible. It all depends on how much you’re willing to sacrifice. Are you willing to have X number of roommates? Are you willing to live in a basement? Are you willing to do short term rentals of a room for extra cash? Are you willing to buy/live in an unsafe area? I recently saw a property that had a several illegal units in a basement. If ever there were an accident or a fire for instance, the owner would be criminally liable. I say these things not to exaggerate or to frustrate you, but to help you think about what you’re willing to compromise in order to pursue your goals. Speaking of... are yours well S.M.A.R.T.?

Selena Williams · Answer

@Will Bert at the price points I see in Brooklyn I won’t be able to put enough down to cash flow. I’d like to get into Brooklyn now while I still barely can then look at other places like New Jersey for cash flow.

If I can significantly subsidize what I currently pay monthly with my one bedroom, I will be happy.

Will Bert · Answer

@Selena Williams it all depends on how much you put down... If you put a large enough down payment i'm sure it will cash flow...What are your plans?

Rashad Ellis · Answer

@Selena Williams

Greetings. Im also looking for a good deal to house hack in Brooklyn. But the new tenant laws in NY are discouraging me.

Selena Williams · Answer

@Okey Onyebuchi thanks! I’m not banking on cash flow at all. I’m hoping for my mortgage to be significantly subsidized enough to save money and the property to appreciate over the next 5-10 years.

I’d like to be in a position to buy a cash flow property in 3-5 years after purchasing this multifamily. I want to get rent ASAP which is why I’m looking for a turn key property. With my second property I will have more flexibility to look for fixer uppers.

Selena Williams · Answer

@Jaleel Muss I wasn’t planning to go further East than Flatbush. I was thinking it would be hard to get renters in places like Brownsville and East New York but maybe I’m wrong?

I don’t have access to the MLS (wish I did) but from what I can see in the Bronx there aren’t many turn key properties and they are so far out.

House Hacking in Brooklyn or The Bronx?

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