All Forum Posts by: Eric Hajdu

Hey John Paul, I'm currently doing a flip in Cobble Hill Brooklyn myself, and luckily the value of townhomes continues to increase in the area.  I've been dealing with lenders in NYC for several years in various capacities and have noticed a major shift in the last few months that is actually beneficial to the borrower.  The lenders have been on easy street with low rates and high volume, but currently their business is seriously hampered by low demand.  

Lenders that I use to have to call 3 or 4 times, now stalk me for business.   I say all this to say that you have more options now and the terms such as pre payment penalties and points up front are far more negotiable.  Yes, the rate is much higher than a year ago, but it's not all bad news, good luck!

Lamacca,

I believe you would have to file a change of C.O. as you would be going from a one two family.  This would have to be done through the D.0.B. with an architect and engineer, and if even possible will be very costly.  Similar to the other posters, I have never heard of anything like this in my 30 years in NYC.  Sorry to paint such a grim picture of this happening, but I've been dealing with the DOB for over a year, so I might be a bit jaded, best of luck.

This is all part of the real estate game we're in, you just have to accept it.  When we bought our Brooklyn NY condo 5 years ago, we had sweeping views of the water, statue of Liberty, and all of lower Manhattan.  Now we look at 7 or 8 new condo high rises, I don't think twice about it, because when our building was built, it most likely compromised the view of those located just west of us.  I think it's silly when owners fight to tell another owner what they are allowed to do with their own property, let it be.

Gabby, congratulations on looking to get into your first investment property, if I could share any advice based on your post, it would be to greatly narrow down and specify your search.  You mentioned 3 different markets, with two of them being large regions.

I would really try to get it down to something as specific as, I want a 3 or 4 family in Bed Stuy that cost X and is between a certain 20 block radius.  This will help you get serious, and also if you chose to use a broker on the buy side be very helpful to your search.

Lastly, I have been investing in Brooklyn since 2001, and you have to throw all traditional cash flow metrics out the window, you'll be buying for capital appreciation and wealth creation.  Hope this helps a bit, please don't hesitate to reach out, best of luck!

Cameron,

I am in the process of doing the reverse, converting a legal 4 family Brooklyn townhome into a single family home.  The process has been laborious and expensive, you would want to start with an experienced architect who will act as the point person for engineer, expediter, etc.

It is my understanding that the DOB is much less cooperative when your trying to expand the C.O. and go up in amount of units, it's not impossible, but will be challenging.  I would really do the math, as 2 larger well finished units will often command similar rent to four smaller units, and you'll have less headaches/tenants.  

Feel free to message me or reach out if you want any further information, best of luck!

Eric

Nick,

Congrats on the new job and upcoming move, from an investment perspective, i would definitely consider the multi family route, it gives you so much more flexibility and control.  I have been trading up Brooklyn Condos for over 20 years and finally bought the dream apartment a few years ago, 3 bed/3bath, outdoor spaces, parking space, statue of liberty views, etc., and to be honest I wish I would have used the funds to buy a multi family instead.  The common charges and taxes keep going up, there are several assessments, and I'm pretty limited with what I can do with the unit as far as adding value.

With a multi family, you can rent one unit out, make condos out of the building, add sq. footage, convert to large single family, really endless potential.  Sorry for the long winded response, but if you can swing it, go with the multi family, which continue to maintain their value very well amongst the sea of new condo construction.  Either way, good luck, and please feel free to reach out if you need any input on neighborhoods, etc.

Anthony,

Congrats on accumulating so much equity in your property, I don't think someone can tell you whether to sell or hold, ultimately that's your decision.  You are correct in stating that the economy is uncertain, but I'd like to clarify that the Brooklyn town house market/multi family segment is probably the strongest I've seen it in 25 years.

I would also add that the tax consideration shouldn't pressure you into selling now, as the property will qualify for a 1031 and essentially accomplish the same thing.  The good news is, you bought very well, so however it plays out, you can't loose, good luck!

Ahmed,

Congrats on formulating a plan to get into NYC real estate, I bought my first condo in Carroll Gardens Brooklyn when I was 23yo, and it was one of the best moves I ever made.  My suggestion would be to buy a smaller condo in a class A neighborhood that you would enjoy living in and could easily rent out once you move on.  Another option would be to look into multi family properties in more fringe areas, but I would strongly suggest starting with the condo, don't even consider a Co-op.  Your a young professional, buy somewhere you would love to live, and you'll always be able to find great tenants down the road, best of luck!

@Scott Polisar

Sorry to hear about your flood damage, but it could end up being an advantage to you when selling. If the house needed reno and you’ve already done the demo, you have saved the new buyer time/money. Most importantly, I assume the property is vacant which is also a big plus for potential buyers.

I’m not sure how extensive of a project you imagine someone performing, but you might consider starting the process of getting approved plans. This process can easily take six months in NYC, will be a significant expense, but I believe add a lot of value. I believe approved plans stay valid for 5 years, so it could make sense for you if any expansion or construction is planned.

Best of luck!

@Leisy Bartumeut sorry to hear you had a bad contractor experience and are left in this position. Your options really depend on what debt you currently have on the property. If you don’t have a first mortgage, you’ll certainly have several ways to tap the equity, it will be more difficult if your looking for 2nd position debt or re-fi(not impossible). Please provide some more detail and I’d be happy to pass along some contacts in Bk.

Eric