East Harlem and Northern Manhattan House Hack - Is it possible?

[William Cheung]

Hi BP, I'm a RE broker who's looking to purchase his first investment property. I think there's great upside potential in East Harlem and Northern Manhattan (Hamilton Heights, Washington Heights, etc), and as a single guy, I love the idea of doing a house hack. Is it possible to buy a 2-4 family townhouse/SRO that needs a total renovation and BRRRR/house hack it?

I'm running the numbers and I can't quite make it work, so if anyone has any insight or experience in the neighborhood, please share. Thanks in advance!

[Scott Wolf]

@William Cheung I do not think you will be able to make a property like that cash-flow(or have zero out of pocket for your rent) if you are living in one of the units. What you can achieve is growing equity in your home, and perhaps achieving a lower out of pocket rent then what the rest of the market is asking. Any BRRRR strategy you try to employ, will have tons of competition with other investors.

You need to reassess your goals about zero out of pocket costs for your rental.  If you looked in the Bronx, Yonkers or Mount Vernon, that might be an achievable goal.

Additionally, as a fun fact, 4-family homes are not subject to the mansion tax in NYC.

Best of luck.