All Forum Posts by: Ahmed Saad

Let me know when and where. I'd like to meet up as well.

If you can swing the down payment for a 4 family, you qualify for a residential mortgage for a great rate and use the rental income to pay off your loan, while enjoying the benefits of depreciation and gaining the experience of being a landlord (cue the rainbows and glitter). Good luck fellow Brooklyner.

Hi @Justin S.,

I've been off BP for a few months and wanted to check back in to see how your situation is working out. Let me know.

Hi Robyn, 

I have 2 properties in Park Slope and have managed them for over 10 years now. Here are some thoughts / questions / recommendations.

1. What are the conditions of the units of your current 3 family? I'm asking this for 2 reasons. First, if you're GROSSING $6300 on 3 units in Cobble Hill I think you're rent is very low. If they are 1 bedroom apartments and they are in decent condition you can probably get about $2700 per apartment fairly easily. If they are 2 bedroom then maybe $3000-$3200. Second, if there's room to improve the conditions of the units, then there's room to improve the rents, thus room to improve the amount of money you withdraw from the property.

2. Let's pretend you're looking to take out $1m (which is very reasonable considering the property). You can use that as a DP on a property in Brooklyn and grab a really solid building in an A area. The cashflow would be OK from a % standpoint but from a $ perspective it'd be good. Of course the appreciation will be stupendous. 

If you're looking to really grow a portfolio, you can use that $1m as an investment fund and start buying fix and hold units in an area like Philly. You can BRRR(R) if you want but then you need to find management. It's not really worth your time or effort to manage any of those for the rent you would get there.

3. Since you are comfortable with the small multi family, I'd say why reinvent the wheel! 3-4 family properties are the best. They are easy to manage. No RS/RC issues! Larger properties in NY have issues with HPD all the time. Constant issues with sprinkler inspections an boiler/heating issues. They qualify for residential loans but with the added benefits of the rental income to help pay the loan. 

I hope this was helpful. Always happy to see another Brooklynite here!

You have a lot of variables to work with. First, if this is a legal 2 family there should be 2 electric meters and gas meters. Split everything up now that heating season is coming to an end. Depending on the condition of the heating system and your $ situation, you can invest in the split unit HVAC systems. You can also install an electric water heater & tank for the first tenant.That will put the cost of heating & hot water back on the tenant via their electric bill. Perhaps most importantly, that will keep you from having to deal with an expensive licensed plumber & national grid. Check into the situation with the energy supplier.

If this is NOT a legal 2 family, I would advise you stick with your current situation and to have the utility bills sent in your name to a your preferred address and you make sure they're paid. Have the tenants reimburse you and the bill by the number of bedrooms per unit (e.g a 1 bed apt pays 34% and the 2 bed apt pays 66%). If they do not reimburse you monthly then you can choose to not renew their lease and take the utility costs from their security.

Hi @Justine Lee,

Congrats on the purchase! Where in Brooklyn did you buy? Here's my 2 cents. The only way I would consider what you are proposing is if the equity from your coop is enough to place enough of  downpayment (think 50% of purchase price) on a small multifamily (think 3-4 family) so that the income from the new property is enough to cover all expenses of the new property as well as the loan (or a significant percentage thereof) on your personal residence.

It's a gamble that can break you or be the beginnings of your real estate portfolio. Just also know that we are pretty much at the top of the market and everything is very expensive. Good luck!

-Ahmed

Hi all,

I'm in Brooklyn and look forward to discussing all things property and beyond at the meetup as well as online.

If other units are in arrears for HOA dues you will have a lot of trouble selling the unit because traditional banks will not finance a condo if management has not collected enough reserves. Even if you don't want to sell the unit if you were to buy it, other owners who want to sell will have the same trouble.

Hi BP friends and colleagues. I could use some outside assistance in looking at this opportunity. Please note that this is in Brooklyn, NY which is crazy expensive and I'm certain would not be as an appealing deal were it in a Midwestern or Southern market. Here are the details and my assumptions:

The property is a 4 family brownstone that is in need of a total renovation. The building has 2 - 2 bedroom apartments and 2 - 1 bedroom apartments.

My renovation plan includes converting the existing 2 bedroom units which are large into 3 bedroom units, and installing new heat & water systems to allow the tenants to cover their own utilities and help reduce my operating expenses.

The asking price is $1.5m. It must be an all cash deal. The property will be delivered vacant.The estimated rehab costs are between 325K and 375K. Obviously I want to try to negotiate the price down, but these days everything is flying very quickly in Brooklyn; particularly in this neighborhood.

The estimated Gross Annual Income of the property after repair is $120K with a Net Operating Income (NOI) of $105K.

Ideally, after the property is rented out I would refinance. By my calculations, the most I could pull out with a DSCR of 1.2 would be approximately $1.1m.

I also think that based on the $105K NOI I would have a property worth approximately $1.9m-$2.1M based on a 4.5%-5.5% cap rate.

I'm not particularly good at running IRR calcs but if someone experienced could discuss with me, I would greatly appreciate it.

I don't think this is a homerun, but I think it's a solid double. What are your thoughts? What am I missing? Should I jump on this? I'm sure it'll go soon. I especially would like to hear from anyone with experience in expensive and/or really hot markets like Brooklyn.

Thanks,

Ahmed

Congrats on the purchase! Where in Brooklyn did you buy?