NYC House Hacking- Multifamily Townhouse

[Maxwell Frenkel]

I am looking for advice on house hacking in NYC. My business partner and myself are young professionals in NYC looking for an alternative to the pricey rental market. We'd like to purchase real estate somewhere close enough to commute to Manhattan (considering Brooklyn but open to suggestions) using a low downpayment loan program such as FHA or SONYMA. We are interested in a townhouse style multifamily unit in need of some update... but rentable in its current state.

Would love to hear if any BP folks have insights on this plan

 - Any neighborhoods or developing areas we should be looking at, we'd like a house south of $1.5 million

- Beyond the mansion tax and typical closing costs, any other hidden costs we should be aware of (with regards to purchasing in NYC)

- As first time home buyers, anything to consider, especially when investing in an expensive market

- Have people had success with alternative search methods such as direct mailing in NYC 

- Any recommended RE meet ups in NYC

Thanks in advance for any insights, and looking forward to hearing your stories!

[Jason Lee]

- With a budget up to 1.5M you’re not going to find anything in Harlem, LIC and most of Astoria. You’re going to have to go a little further out but there are a lot of options. I would look at Sunnyside and Woodside, Bushwick, Bed-Stuy. Stay near the trains. You can find something in good condition that’s set up as a legal 2 family with maybe a finished basement that’s set up as an in-law suite (which most would probably airbnb out, or occupy). You can also look at Jersey City (Heights or Downtown) and Hoboken where your budget can get you a little more like a 3 family with maybe parking or a garage.

- There are NYC and NYS mortgage recording taxes which is 1.8% on the mortgage amount under 500k and 1.925% on the mortgage amount above 500k.

- Get a pre-approval. Most first time buyers don’t have a good idea of what they can afford or what kind of mortgage they will be able to get. Get a referral for a banker or mortgage broker (I wouldn’t call an 800 number or walk into a local branch). A good banker will explain all your options.

I’d probably stay away from anything that needs too much work. Holding and construction costs are high and tuition for novices can be steep.

For a house hack be realistic about where you're willing to live and what you really need for amenities, commute times, etc. It'll help you focus your search and save you a lot time.

- Direct mail sounds like it would be a waste of time and money. Find an agent that has experience doing these types of deals. There might be neighborhood brokerages that have relationships with local landlords and have access to off market deals, or much larger brokerages that have a lot of off market deal flow due to sheer size. My firm has 2500 agents in NYC and there are a ton of off market deals, most of which are multi-family.

- @Basit Siddiqi has networking events in Midtown. I haven’t been yet but thinking of going to the one on the 7th (it’s literally down the street from me).