All Forum Posts by: Eric Hajdu

I have two Brooklyn Condo rentals that I have owned for many years which have appreciated tremendously, but they still barely even cash flow.  The common charges and taxes make it almost impossible for the numbers to make sense on a new construction condo, but they are a great tool for building your wealth and net worth over time.  From my experience, another issue with the NYC condo, is that your fix cost are guaranteed to frequently change, common charges could double, large assessments, taxes going up 20% in a year, etc.

If you looking for monthly yield in the NYC market, you have to branch out to the fringe neighborhoods a bit and look a multi-fam properties.  I have been looking at several 3 families in Brooklyn that are true 5 or 6 caps, and you are able to really control your monthly expenses.

Best of luck in your search!

Hey Anders, I'm not sure how active you are in the Brooklyn market, but from personal experience and through talking to other local investors, I would be very conservative/cautious in your RR projections.  I have two one beds in Class A Bk neighborhoods, and they have not been easy to rent out lately, yes the market is rapidly improving, but it could still take some time to get the units filled, so I would be hesitant to pursue a deal where the margins are so tight.  One final thought, the property taxes on my 3 BK properties have increasing exponentially every year, and I imagine will only get worse with the impending budget crisis.

Ps- I know it doesn't sound like it, but I am very bullish on the local market and wouldn't invest anywhere else.  As I've mentioned in a few of my previous post, you really buy here for the capital appreciation, not the cap rate, best of luck in your search.

@Hannah Stern

Hey Hannah, by “uneven” I was referring to the type of product that is selling in Brooklyn. There is a tremendous glut of 1 and 2bd condos on the market that are sitting or trading for 10-15% less than 2 years ago. Larger apartments with outdoor space and townhouses are selling like homes in the rest of the country with multiple offers and bids over ask.

If you did the math on your park slope house using rent roll vs. value, I imagine you would arrive at a 2 cap rate at best. If you take the 4 million and even moved a little further out in the borough, you would easily be at a 5-7 cap rate, but yes the property value wouldn’t be as recession proof as the class A area you are in now. As I mentioned earlier your current home will give you wealth preservation/storage while others area will give you vastly increased monthly income, hope that helps. Again, feel free to reach out if you want more specific advice or need to connect with an agent or possible buyer, good luck.

@Hannah Stern

Hannah, I can completely relate to your post. I have a condo in Carroll Gardens Brooklyn that I bought over 20 years ago.

My wife and I met around the corner from there, had our first child while living there, etc. I have been renting it out for about the last 15 years as the value continued to increase. I had visions of one of my kids living there one day or using it occasionally if we moved away.

But after really looking at the numbers, I decided to list it for sale. As a cash flow producing investment, the numbers simply don’t make sense anymore. When I sell I will most likely buy in a less established area and collect 2 to 3x the current level of rent I was receiving.

The market here is pretty uneven right now, but the townhouse market is on fire. I’m not sure of your current financial situation, but a Park Slope home will certainly store wealth safely for generations, it just won’t work efficiently as a rental. Feel free to message me if you have more specific questions or thoughts about next steps and possible outcomes.

As long as you keep the materials modest, you could easily do it for under 50k.  Although Staten Island is technically a NYC borough, it is really considered the suburbs here, so fortunately you'll be able to get labor at much lower rates than Downtown Brooklyn or Manhattan.  I would consider heading over the bridge to grab your materials in NJ, you could save a few bucks that way, good luck.

@Tim Richter

I think in these situations you should have a professional come in to evaluate. If my tenants have trouble with Hvac, plumbing, mice, etc. I always hire someone who specializes in that field to come analyze the situation. This makes the tenant feel like they are being taken care off, and gives you peace of mind.

I agree with others that close to 4K is absurd, I live in NYC and still only paid $250 for someone to come and address a recurring mice issue. A good/honest pro will seal up all the entry points, leave traps, and put the responsibility back on the tenant to keep the place clean. Good luck!

Hey Cole, I can relate to your post and find myself in a very similar situation, married, living in Brooklyn, two kids, one of which is a teenager, and two NYC rental properties.  I also am on the cusp of doing a bigger deal, most likely a multi family in a Class A Brooklyn neighborhood, but I would suggest that you don't empty your brokerage account to fund more real estate.  I work in the Stock market and get this question frequently, I tell people to consider their net worth as a whole and find some balance between your equities and real estate.  Meaning if you have a $1.5 mil brokerage account, probably would make sense to not have more than $2 million in real estate equity.  Just my opinion, and the way I attempt to keep a balanced barbell on my overall financial strategy, good luck!

I know I'm in the minority here, but I would be inclined to invest in a large city at this point in the cycle.  I went into contract on my first Brooklyn condo August 2001, and closed shortly after September 11th, it has more than tripled in value since then, and always had solid well qualified tenants.  I closed on my second Brooklyn Condo during the height of the financial crisis and later sold it for more than twice what I had paid.

I say all that to imply that any downturn in historically desirable markets should be considered as a long term opportunity. I work in finance, and to me, chasing after high cash flow from properties receiving dozens of offers is like buying game stop or AMC, I would rather own the Apples and Googles of the real estate world. Good luck in your search.

I wouldn't ask her about it, just move to the next applicant, luckily you realized she wasn't being truthful before any paperwork was signed.

This is someone you are going to have to engage with regularly for at least a year, no matter how the conversation goes, there will be some level of ongoing animosity on both sides, not worth it, good luck!

Hey Jason,

I have a few rentals in Carroll Gardens and Park Slope that don't produce very good cash flow in relation to their current values.  I have been looking pretty actively at different deals in Bushwick, and the numbers can make sense there on a multi-fam.  I think what is tricky is estimating current cap rate potential on a vacant property, as almost every BK landlord I know, including myself has incurred reductions of 10-15% in asking rents from 2019/early 2020.  Best of luck in your search, feel free to message me.