What to buy and where? Considering a 2 family in Brooklyn

[Justin S.]

Hello all, 

This is my 1st post. I have been lurking around for months reading all of the excellent information on the site. Its really fantastic a community like this exist. I am 36 and was fortunate enough to buy a Bed Stuy Brooklyn 3 family brownstone, 3 years ago. I purchased a shell for 860k and did a gut reno on it. It cost me roughly $1,000 to live here including all utilities. I have roughly 1M in equity in the home and considering putting 25% of it to good use. I was kicking around tapping into a Equity line that has a fixed rate option and using that money to put a down payment on another property. I am a mortgage banker and have good accessibility to funds and  decent resources to find properties. 

I have read enough on the forum to figure out NYC is really an appreciation play. I have also been temped to invest into the Baltimore MD market and just recently made a solid contact there. I know of an off market 2 family deal in Flatbush. I don't know quite enough about the property yet such as exact location, condition, etc, but should know more info in the next couple of days. There is no innovatory in Flatbush whatsoever and agents that I know and work with seem to consider it a solid investment with good upside potential. I have read a lot of post from Investor Lew and Adam who are also here in Brooklyn. 

Few questions to start I would like the communities input on- 

1. Would you consider using a HELOC or fixed rate 2nd mortgage a safe play? I would still have plenty of equity left.

2. If so, and I allowed myself a 200-250k budget to play with, what would you buy? If I buy this 2 family in Flatbush, I highly doubt it will turn a positive cashflow. I think I would break even at best but do think there is a lot of upside for appreciation in the neighborhood with values skyrocketing everywhere else. 

3. Buy a few SFR in MD that would cash flow

4. Look to purchase Multi Families out of state? 

5. Look to purchase an apartment building out of state and put 20% down?

Appreciate your feedback. Thank you in advance, 

Jay