All Forum Posts by: Justin S.

Hello everyone! I have been looking at a lot of properties lately and haven't made a final decision. Llewelyn A., what is your take on buying a property already renovated or in decent shape? At one point I was very opposed to this but after the headaches, time and money dealing with the DOB, its actually something I have been considering. I just pulled out a HELOC on my house so I am ready to go when something feels right but I have been sitting on the sidelines for the time being. It is not easy to purchase an investment property in Brooklyn... Thats for sure- It takes some serious capital.

Hey Adam K., 

Thanks a lot! I am currently collecting 5k per month in rental income. I do not have a pension so I foresee holding onto my Bed Stuy property long term. I also try to max out my 401k every year. My home is located in the Stuy Heights historic district. 

I am not looking to quit my job and cash flow is not currently more important then finding high appreciating properties. I am getting married next month and do not have any children but that is on the horizon. I am a little concerned about this rising rate environment we are in, so any money I take out of my current property I would look to have a fixed rate. 

I like your idea of reinvesting in Brooklyn but I don't know how likely it is I would be able to find 2 3 unit properties in Crown heights. That would be amazing though. I have any realtor I know keeping me informed of any opportunities. As you know, this market is ultra competitive, so finding properties isn't easy. Even if you have the connections! 

I absolutely would not have 1M in equity had I purchased out of state. Its funny, when I was purchasing in Bed Stuy 3 years ago, and buying a shell on top of it, everyone told me I was nuts and it was a horrible idea. 

Thanks again for your input and contribution Adam. I appreciate it. 

Llewelyn A.,

Awesome idea on doing some homework on Franchises. Ironically, we do not have any in Bed Stuy but we have plenty of entrepreneurial coffee shops. It really is the true indicator of progress in a neighborhood. I have also been reading your book recommendation. You had mentioned it on another thread and I already had purchased it. Your insight and wisdom is greatly appreciate and I too, would be interested in taking one of your classes. 

So based on everything you said and I have absorbed, in this current marketplace, you would even purchase something that had a current negative cashflow if you saw good future potential gains? How do you draw the line in the sand and come up with what that limit would be? I agree, 90% of investors would not make that move but even prior to you and I interacting, I shared a similar mindset. 

Thank you for the reply Llewelyn A.

We certainly have a similar way of thinking. I do well for myself and have very low overhead so having income producing properties right this very second isn't a concern of mine. Honestly, I would be more worried about having to take care of numerous properties out of state and the responsibility that comes along with that, then having a couple of properties here in Brooklyn breaking even. Seems more of a headache to me then anything. 

As you know, it is getting harder and harder to find good deals in prime neighborhoods of Brooklyn. I agree 100% about breaking even on rentals but a lot of properties on the market don't even do that. Loosing a few hundred bucks a month I can also see until the rents catch up but loosing thousands a month I just can't see. The reason why I am mentioning this is because I saw a house the other day in Bed Stuy. 4 story 2 family, original condition, needed updating. 1.6M and that would have been a good deal for an owner occupant in todays marketplace but to rent and hold that house as a 2 family would have a negative cashflow of thousands per month unless you had 600k cash or so to put down. I just didn't see that being a wise investment. 

The other thing I am well aware of I wanted your input on was the cash needed to purchase these buildings. I had mentioned I have roughly 1M in equity and was allowing myself 250k of that equity to use and invest. I could purchase many different things with that kind of money, my credit and income. It could be a possible apartment building out of state, many single and multi family homes out of state or one Brooklyn property. Figure I would put down at least 20% on a 2-4 unit property plus, as you know, closing cost here are insane, so that would be that. I would have the two properties and sit on that for a while until I saved more money to acquire more or accumulated more equity to extract from the investment property? 

I guess what I am getting at is- I know the first one is the hardest and it all gets easier from there, but with this strategy, I don't see how I would acquire more then 2 properties anytime in the near future. Saving 250k doesn't happen overnight. Especially the way we are taxed here in NYC! :) 

Laura Moreno, I can't say I am a fan of Brownsville. 

1. I am not super familiar 

2. I do not see any gentrification taking place there

3. Crime is still very high 

4. Poor housing stock. 

I could be dead wrong but I am just not feeling it. 

@Adam K.

@Llewelyn A.

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