All Forum Posts by: Kurt P.

Jon, yes certainly all areas are not equal and mine might be on the bottom of that line, though there are clearly many landlords making money in NYC. I grew up in a two flat, and actually 2 fams are the norm here, not SFR's. So the 'help pay the loan' idea is very common here if you can get the loan, over 80% of nyc rents. The rent vs buy thing here is a fine balance, or in-balance!

I do think starting long distance is difficult, but within an 90 minute drive there are many other options if I go that route.

I'd like to know how people are making money in nyc . Wonder if some nyc people have opinions? Sounds like you are staging up, and I am looking to figure that first stage I suppose, really appreciate you take. I know your like the top poster, but helping a first timer out like me is very generous!

believe it or not this property will probably go for much more than we'll bid. I think I might need to develop some wholesaler / birddog contacts to get a decent deal!

Jon,

thanks for the walk through, your right its a lot of cash and equity into one place, which I guess is kind of why I'm posing here to get a sense of it from a non-homeowner perspective like yours.

the idea of 'combing' needs just creates compromises is an interesting one, maybe on target in general. However there are no 200k ranch homes in my town, I'd be looking at 400k for a 2 bdr condo maybe, so the relative difference of what loan I can get with an income prop is also what I am looking at, and the loan rate that is available to me via FHA now. My personal cash flow alone will not get me that 430k loan, its the downpayment that gets the ratio into conforming.

I agree we are in a postion with more choices than most beginners, and I want to be conscious of that and move as wisely as we can. I appreciate your help in that process. Maybe these numbers don't stack up, but in general don't most most multi-fam investors start like this? I'd be interested to know that.

thanks for your take Jon. some of the NOI might seem skewed because we have a 150k renovation up front in the budget which includes all new unit finishes, kitchens, baths and mechanicals, so yes I'm sure its off but not as much as you might think.

I appreciate your comments. There is clearly a understandable gap between what something looks like when bought retail vs wholesale. While I make no claims to know the market here as an expert, its not as soft as the rest of the country at all. Your point about use of cash is well taken, and actually that is kind of what I am asking. If this is what the market offers am I better of being a renter at home and an out of state owner, or finding a way to buy wholesale at home?
Wholesale in the mid-level+ areas of brooklyn might be a tough find, but would love to learn how.

thanks again Jon

hi,
new to BP and have really enjoyed reading and learning. As we are about to make a first offer thought it might be good to get folks opinions of this plan. I am looking to start with a three family that I can occupy, reno, and hopefully use as leverage when I can afford to buy a second 2-4 family. Whether I stay or move to the new property, I expect my time frame on that to be 2 years or so, not quick but I think realistic to build equity. And I'm fine with a 10 year (not 10 month) goal.

I am in Brooklyn, a very expensive market, but due to a recent sale my wife and I are lucky to have a cash position, and I hope to grow it with a 3 family via cash flow, appreciation, and strong management and marketing. ( Vacancy is so low here the standards of how&what gets rented is kind of crazy, which I see as an opportunity. )

Right now we are looking at two 3 fams with similar numbers. I know these are not 'investment grade' numbers but understand my wife and I are also limiting ourselves to were we can live and work, so deals are leaner on this first step. In this scenario we are putting down a substantial downpayment to get the loan, but that also allows two rents to cover the note and keep our risk low while we save and learn. I don't expect real cash flow the first year, rather via putting our current rent into savings.

I would like to get your thoughts on this overall strategy of starting in one's backyard as a new investor, vs say renting here while the equity works somewhere else where opportunities might be more favorable. I would like to get into flipping here, but it's an expensive and competitive place to make mistakes as you learn the ropes and I don't yet have someone here I can learn from. I am including the numbers as well for one of the properties. Though we don't have a contract, this is what our target area is like.

many thanks for your thoughts!

-

Contract Price
$652,000 + $18,000 Closing Costs
Total Purchase Cost $670,000

Loan $420,000
Downpayment $250,000
Cash Reserves for Reno $150,000
All In $820,000
ARV $900,000

NOI $53,000 ( with all three rentals at 2.5% vacancy rate )
CAP 6.5% (after reno, seems in line with market here?)

Mortgage @ 4.78% $27,300 yr / $2,275 mo
Taxes $3169 yr / $267 mo
Insurance $1300 yr / $109 mo
Utilities $3,200 yr / $300 mo
Holding Costs
$35,412 yr / $2,951 mo

Gross Rents
for all 3 units = $64,800 yr / $5400 mo
2 units + us = $40,800 yr / $3400 mo

just saying hello, lurking around decided it was time to register.

I'm a newbie looking at 2-3 family properties that I can reno, live in for financing, rent and then leverage for the next or sell in a 2-3 yr timeframe. So compared to most a slow boat. Have a good cash position after recent sale and want to built it over time.

I'd consider flipping but its a very competitive market here, and I don't have wholesaler contacts yet. Are there other nyc folks here?