All Forum Posts by: Eric Hajdu

Hey Joshua,

I'm currently in the throws of a development project in Brooklyn, and the $300 a sf model is a little light, especially if you plan on decent finishes.  You are correct, that this has long been the conventional figure used to estimate cost for buildable sf in NYC.  Also, I'm not sure if you are demoing an existing structure, if the structure is freestanding, etc, but this will obviously greatly affect your overall budget.

For our project, most of the material prices are in line with expectations, but where we've been shocked with recent increases is the soft cost.  Our insurance policy for the project alone was well over $100k.  Lawyers, engineer, architect, expeditor, surveyors, etc pile on the fees quickly.  We also had to negotiate access agreements with both adjoining neighbors, which added nearly another $100k.

Best of luck in your venture, feel free to contact me directly with any questions or if you would like me to pass along any of my resources.  

@Isadore Nelson yes, I know someone that recently paid $500k to get a longtime rent controlled tenant out of a Carroll Gardens Brownstone. They bought the property with tenant in place for roughly $1.5mil under market value for property when vacant. In Manhattan, these buyouts can be 7 figures.

@Isadore Nelson

From my experience in the Brooklyn market, you are most likely looking at tenant buy out instead of an eviction. It is very common here for investors to model a buy out of anywhere from $50-$500k.

If you’re getting the property for significantly under market, this strategy can still be advantageous and everyone wins, good luck.

I would like to add that in many cases in NYC, "no fee" means the unit is listed directly by the owner on Streeteasy etc., as opposed to the landlord hiring an agent and paying their fee.  I have always preferred to use an agent to rent out my BK units, as I find renters that are paying the fee are more likely to stay for longer durations, and be better qualified tenants.

Hey Robyn, I'm currently doing a full reno/expansion of a townhouse I own in Cobble Hill, feel free to message me and I can give you some info.  You might have to get an architect and pull permits for the work your describing.

Eric

Andy, I'm sorry to hear that your going through this, I don't personally know anyone dealing with such difficult tenants, but do know several Brooklyn based land lords who got tenants out in order to do reno. or dramatically increase rent.  They all used the same the tactic, money.

I would offer a generous buyout, which I know will be hard on principle, but you'll spend just as much on lawyers and preserve your sanity in the long run, wishing you the best of luck.

I am certainly not a tax expert, but fwiw, I just looked at my closing statement from the purchase of a Brooklyn multi-fam and as purchaser, I paid the following taxes:

Transfer Tax Additional Transfer(mansion)tax

Transfer Tax Supplemental NYC(mansion)tax

Mortgage Tax 1st mortgage

Michelle,

In the NYC market, i think our best search resource is Streeteasy, it's the most up to date and provides the most accurate historical sales data.  As, I've mentioned to a few other posters in the past, when your searching in NYC, I would recommend getting super specific in your geographic parameters.  Otherwise, there is just too much to choose from and it will be difficult to ever take action.  Best of luck in your search!

Ina, there are several lenders servicing the NYC multi family space that pretty loose about income and tax returns as long as the property shows decent rental income.  The rates are competitive, but they require a larger down payment, usually around 50%, but your client could get in a great 3 fam in Bushwick, Bed Stuy, etc.  Feel free to message me if you'd like more info.  Good luck in your search!

Mohammad,

Thanks for sharing your post, if you'd like to message me, I could give you some info./pros/cons in regards to development strategies for your property.  I'm currently developing a 4 family townhome in Cobble Hill Brooklyn, and have a couple friends doing various projects similar to yours in Park Slope(where I also live).  

Either way, let's connect, I can give you an idea of cost and all the headaches your have to look forward to you.

Eric