All Forum Posts by: Neil Stern

Shmuel, Thanks for your response - My question regarding renovation was , if i need to do 6-700k in renovations, can that be financed? construction loan? etc. 

My exit strategy would be to bring the value up and then sell (assuming the comps are predicting greater value then my costs)  Preliminary research indicates that the cost per square foot may be significantly higher then i would be paying, when all in..

Thanks! 

Thanks Michael, great answer!

Neil  

Hello BP!

I have been presented with  an off market deal in the Clinton Hill/ Bed Stuy border in Brooklyn.  - purchase price would be 1.5 Million - its 4 stories and requires a gut renovation.

Supposing that this is a great deal - how would i finance the 600-700K renovation ?  

I expect to have four large units when done - Minimum two Bedrooms each. 

Questions - at face value , does the deal sound good? How would i finance the project?

Thanks!

Neil  

Hello BP!

My feeling is that the following questions are likely on the minds of  newbie investors. I'm sure your answers will help many people - So thanks in advance!!

Generally speaking, where is the best place to do internet research on key market metrics? 

- Where is the best place to get demographic trend info? How does one determine the likely direction that a neighborhood is heading?  - Job outlook, etc.  is there any particular website?

-Where can a non broker investor get quality information regarding expected cost per square foot. There are often properties (I find this especially true in Brooklyn NY ) that are between two Neighborhoods with different valuation. 

-Is there any resource where  renovation costs can be researched - targeted to a city -  as an expected cost per square foot?

I understand that a Mentor can help with these questions, but are there quality online sites that report on these metrics?

Again, thanks for your advice.

Best,

Neil  

 Great responses all around - If this is a 2 or 3 unit building, it will be considered "free market" and it will not be subject to rent stabilization. This, among other things, will allow the landlord to set rent at market rate and not be subject to rent stabilization rental increases  (this year a one year renewal has a 0% increase)

@Molly Krief, congrats on your new life in Baltimore, and good luck on your RE Journey! Reading the thread, I believe that people are only trying to be helpful. Although I am a newly minted RE investor, I'm particularly interested in Baltimore deals - feel free to message me regarding opportunities.

Grit and determination are key ingredients to success in all areas of life. You have plenty, use it wisely and you will win!

Best of luck,

Neil 

great job!

OK! So i would like to purchase a three unit home in brooklyn NY -  my first investment property -  I was told by a broker that i would have a very tough time getting a residential loan as i already have a home. this information did not sound right to me - is it accurate?

additionally, I plan to renovate the property and in 1 year, recoup my cash through a commercial loan. as i mentioned, the property is only three units.assuming that i succeed in bringing up the NOI is it realistic to think that i can get a commercial loan in a year? The same broker told me that since the house is in a weak brooklyn location banks will not necessarily go by the NOI / Cap rate.. is this true?

Finally, if my property is in ny - will non local lenders do the deal? 

thanks!!

Chaim & Eric, Thanks for your helpful responses! 

Does anybody know the current cap rate that investors use for East Flatbush?

Best,

Neil 

Hi, any advice would be much appreciated!!!

I am looking at a multi family (3 unit) deal in East Flatbush, Brooklyn NY - Based on my research with brokers, I believe i can get the property to an NOI of 35k.

1- Based on this, is it safe to assume that I can get a buyer at to buy this at $35,000/.06 =$583,000? Is that a sound way to evaluate the future property value? What is the correct cap rate to use when doing such an analysis

2- How important is average cost per Square Foot when analyzing a deal as well as future  potential prices? 

3-what are average closing costs in Brooklyn NY 

As you can tell, first time investor here - I think i have a great deal, but i need a little more confidence in the deal before i pull the trigger!

Thanks in advance,

Neil