Brooklyn NY - all advice is appreciated!

[Neil Stern]

Hi, any advice would be much appreciated!!!

I am looking at a multi family (3 unit) deal in East Flatbush, Brooklyn NY - Based on my research with brokers, I believe i can get the property to an NOI of 35k.

1- Based on this, is it safe to assume that I can get a buyer at to buy this at $35,000/.06 =$583,000? Is that a sound way to evaluate the future property value? What is the correct cap rate to use when doing such an analysis

2- How important is average cost per Square Foot when analyzing a deal as well as future  potential prices? 

3-what are average closing costs in Brooklyn NY 

As you can tell, first time investor here - I think i have a great deal, but i need a little more confidence in the deal before i pull the trigger!

Thanks in advance,

Neil  

[Eric A.]

In my (somewhat limited) experience searching for a multi fam in Brooklyn the past 2 months, they tend to trade more like single family properties.  By that I mean the price per square foot for comparable properties seems to be more of a factor than the property's cash flow and cap rate.  Right now there are a lot of people seeking to live in a townhouse in BK and rent out the additional unit(s) to help offset the mortgage.  Knowing that, most of the professional investors are into buying wrecks and doing really nice renos and flipping them to end users for hefty gains.  Just my experience.  Then again East Flatbush hasn't caught on yet as a "hot" neighborhood, so maybe there will be more buy and hold type of investors out there which will make the cap rate approach more appropriate.