All Forum Posts by: Eric A.

Hadley Benoit it cash flows $5k after expenses, or is $5k the gross rent? What are the expenses and rent roll?

Also, the fact that the listing broker factors in rental income inflation but no inflation on the expense side is another example of how unrealistic their analysis is.  You must always do your own analysis of a deal, rather than trusting the listing broker's numbers.  Their job is to get the most $$$ for their client (the seller).  

However, what I've found, after looking at many Brooklyn multi families over the past two years, is that they don't trade like typical commercial/multi properties would in the rest of the country. More often than not you are competing with emotional home-seekers who are not doing any type of cash flow analysis.  These things tend to trade based on comparable sales (comps), similar to the way single family homes sell, rather than based on cap rates etc.  

Again, that doesn't mean this particular deal isn't a good investment.  I happen to think you can't go wrong owning a 3-fam near Utica in Crown Heights over the medium-long term.  But you will be spending a decent amount of carrying costs while you wait for the appreciation to materialize.

Hi @Laura Moreno I think the location and property seem like good investments, just not as good as those numbers the listing broker put together.  The floorplans basically tell me these will really rent like 1bedroom + office units (as opposed to 2bed units).  Have you considered working with a buyer broker?  They can give you a better (more realistic) sense of whether the rental income being advertised is realistic.  My guess is for that location you'll have a hard time fetching $8500 per month for three 1bedroom+ office units.  it might be closer to $6000 or $6500 in my humble opinion, because the level of finishes/appliances doesn't seem high end.  The other thing is the expenses seem low.  You have to factor in deferred maintenance, vacancy, regular maintenance, taxes, water/sewer, insurance etc.  I personally would factor at least 25-30% of total rental income for expenses.  Run it with these numbers and it doesn't look as amazing, but then again I think in the long term this area will do well and you'd be happy to get a "move-in ready" 3-fam in an appreciating area of Brooklyn for close to $1mm.

Daniel Greenblatt to get any condo to cash flow in "prime" areas, you're going to have to put down 40% at least, and you'll probably also have to find something that has a tax abatement for many more years so you're not paying $1000+/mo in property taxes.

I know you can't assume appreciation will happen every single year but these cities are pretty safe bets over the long term. I know several people that made life-changing money (600k+) in less than 7 years buying Brooklyn condos. That's why people buy if they can.

Laura Moreno if I were you I'd throw rules of thumb out the window in NYC. Judging by your profile it seems you want to house hack meaning you're going to live there. Depending on your family situation you might be able to have a more flexible definition of house hacking. Meaning maybe you can buy a 2br condo and rent out the other bedroom either long-term or on Airbnb. Or if you don't want to share your living space maybe you can find a 2 story townhouse in Flatbush where you live in one floor and rent out the other. Flatbush is generally safe and depending on the exact location you can be Walking distance to prospect Park and the 2/5 trains. The only metric I'd look at is what your net monthly payments will be compared to your current rent. Make sure you can handle the monthly payment and try to factor in a month or two of vacancy to make sure you can cover the whole mortgage with no rental income in between tenants. Don't forget as a house owner you'll have lots of costs like property taxes, water/sewer bill, heat, and homeowners insurance which you never had to pay before. These things can add up. As long as you're comfortable carrying the payments you'll benefit from rental income appreciation as the neighborhood gentrifies as well as equity appreciation as the value of the house increases too.

Laura Moreno maybe in the higher crime areas of the Bronx. That's about it. NYC investors don't buy for cash flow they buy for appreciation that's why you see really small cap rates and negative cash flow in pretty much all decent livable neighborhoods.

Zev Bannett have you checked out Inwood or Washington Heights in Manhattan? Those areas are experiencing rapid appreciation and are a stones' throw from Riverdale. You can still buy an apartment for a reasonable amount (read: below $1 million) and depending on the house rules you can rent out after you're done. The only thing you'll want to consider is that if you want it to cash flow positive after one year, you might have to put down more than 20%

Stuart Fraass PM me my partner and I are seeking additional equity investors for a large rental development in LIC. It would be a good fit for a 1031 investor.

thanks @Andrew Acuna will do