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October 29, 2007
Investment
Where do people think would be the best place to invest in Brooklyn Real Estate right now. I'm thinking Stuyvesant Heights has a lot of potential, beautiful housing stock, great access to the city and still relatively affordable. Hard to imagine places like the Slope or Carrol Gardens can get any more expensive.
Comments
do Kensington less risky and still cheaper than bed stuy.
Posted by: armchairwarrior at October 29, 2007 11:33 AM
yeah people said park slope and carroll gardens couldn't get any more expensive in 2001 also when you could get a brownstone for 1 million.
now they're 3.
Posted by: guest at October 29, 2007 11:38 AM
There are some vacant yards on Atlantic....
Posted by: guest at October 29, 2007 11:39 AM
Who posts this? Is it a broker trying to get a market read? Wasn't this posted last week and the week before that and the week before that? Oh right, things are really volatile- it's a new week. Of course homes will get more expensive in the "prime" neighborhoods and the "up and coming" neighborhoods. Doesn't housing always go up long term? Who would post this question? Bottom-feeding should be excellent in the coming months- but everyone knows that, right?
That said- I like Bed Stuy. I think that the housing stock is great but the bars-to-the-sky builders are in a mad race to destroy any visions of beauty that the preservation-minded folks may have. They just may win- sad.
Posted by: guest at October 29, 2007 11:42 AM
Not a broker, just have some cash I'm willing to invest in real estate. I've been going to open houses all over Brooklyn and I think Stuy Heights is the best investment. Seems like for an investor with about 150,000 I could look to get a four unit townhouse in Stuy Heights. I'm willing to wait until the rent to price ratio comes back more into my favor but if I could get something where the rent would cover the mortgage, taxes and offer a little bit to maintenance after putting down between 15 to 20 percent I'd be interested. I figue after the new year, and the lack of great bonuses on wall street, the prices should come down further.
Posted by: Brooklynnative at October 29, 2007 11:58 AM
You can get a four unit townhouse for 150? In Bed Syuy? Where?
You're right -the bonus crowd is going to get killed. Have you seen how many big players are losing their jobs? It's crazy! So it sounds like you know all this. Why post the Q?
Posted by: guest at October 29, 2007 12:07 PM
I have a different sort of question: if you had $3 million CASH to spend on a brownstone in Brooklyn where would you buy? (serious question, I was wondering if people would still buy in up-and-coming as opposed to established nabes).
Posted by: guest at October 29, 2007 12:15 PM
150 is for the down payment. Posted the question because I'm curious to see if anyone disagrees and why. With some exceptions, (The What?) it's a fairly savvy group here.
Posted by: Brooklynnative at October 29, 2007 12:15 PM
12:15- that was me. I bought in Clinton Hill.
Posted by: guest at October 29, 2007 12:20 PM
Every blog needs a The What?
Posted by: guest at October 29, 2007 12:21 PM
The last time you could buy a brownstone, rent all the units, and cover your costs was 1994. Capital appreciation is how people made money, not rental cash flow. When the expectation of capital appreciation is completely gone, prices will go to where rents can support a modest return -- but don't hold your breath.
Posted by: guest at October 29, 2007 12:57 PM
crown heights has better train access I think but it's pricier than bed-stuy
Posted by: guest at October 29, 2007 12:57 PM
We bought a place in 2005 in Bed-Stuy for between 10 and 11 times rent roll. It pays the mortgage and all expenses, just not interest on the down payment. Many places are priced way out of line with potential rents though, and only make sense financially as owner-occupied buildings.
Posted by: guest at October 29, 2007 1:18 PM
12:57pm, to correct your assumption, we bought a 4-family in a great neighborhood for less than $800,000 in 2001 and our rent roll would have more than covered costs. Instead, we chose to live in a duplex, rent out 2 apartments, and pay less than $900/month in carrying costs (mortgage plus insurance and taxes) for that duplex. (Market rate rent for that space at the time was probably $3,000, and that's conservative.) But price increases over 6 years are way out of line with rents and there's no way any buildings we see for sale now are good investments by any standards. I agree the market is due for a correction.
Posted by: guest at October 29, 2007 1:44 PM
1:44, where did you buy if you don't mind my asking.
Posted by: Brooklynnative at October 29, 2007 2:08 PM
It would be very hard to cover such a mortgage through rentals nowdays. You should think to live in the bldg and rent out a unit or 2. Rentals alone would not have covered our mortgage.
Posted by: guest at October 29, 2007 3:18 PM
To the person looking to invest....
I purchased a home in bedstuy 2005.. 20% downpayment and its a four family rental.. My rent covers the morgage plus any expenses. I wish I could buy more.. The problem is the brownstones are not selling...in Bedstuy. If you find something in Stuv Heights go for it.... Do note I waited over a year to purchase my 4 family BS. (THE BS I PURCHASED). No regrets.....
Good luck and don't be discouraged...
Posted by: guest at October 29, 2007 3:23 PM
3:23 - what do you mean "the brownstones are not selling." Is that a problem because you mean there is no capital appreciation or because there is not enough product on the market? If the latter, I'm surprised to hear that, Seems like there is a lot for sale to me, including 408 Stuyvesant Avenune, former HOD here, 6 unit limestone for 1.55 million. I've been watching that one, price is finally coming down to a possibly place to begin negotiations.
Posted by: Brooklynnative at October 29, 2007 3:48 PM
With 20% down, I think you can probably rent a brownstone to cover the mortgage. We are able to do that in Crown Heights and bought in 2006. The rent does not cover the cost of heat and maintenance though but in the next 5 years, we believe we will be at that mark or very close.
Posted by: CrownGardener at October 29, 2007 4:05 PM
Brooklynnative, I'm sure you've seen them since you are looking in Stuy Heights, but just in case: 404 Stuyvesant and 393 Stuyvesant aren't split up into so many units and don't have the rent-stabilized tenant.
Posted by: guest at October 29, 2007 4:19 PM
I see the fact that 408 is split up as a bonus. You get much more per square foot the smaller the apartment is. For example a studio rents more per square feet than a 1 bdrm, a 1 bdrm brings in more rent per square feet than a 2 brdrm. People don't want to live with roommates and they are willing to pay a premium. Also, I'd rather rent to a single person or a couple, than roommates. The only problem is, is that I think 408 is still priced too high. The other buildings are Stuyvesant Avenue are not selling, and 1 families are usually priced higher than buildings which are split up. Any idea on what kind of rent those apartments would bring?
Posted by: Brooklynnative at October 29, 2007 4:30 PM
I don't think it makes any sense to invest in a Brownstone unless you're going to occupy it. The transactions costs are too high, the keep up is to intensive. you need to hold for a minimum of 5 years unless you're buying a piece of clay and renovating it.
Posted by: guest at October 29, 2007 4:37 PM
I've owned an old brownstone that was in terrible shape when we purchased it so I have an idea of the maintenance requirements. I'm also thinking I'd hold onto it for at least 15 years.
Posted by: Brooklynnative at October 29, 2007 4:42 PM
NFN but Barbara Corcoran herself recommended Sunset Park & Bensenhurst in her NYDN column a couple of weeks ago. Go with the best.
Posted by: guest at October 29, 2007 5:44 PM
5:44. I agree that Sunset Park probably has good upside potential and I should look there a bit more. I guess Bensonhurst may benefit from all the immigration but I feel less confident at being able to predict that kind of a factor as opposed to location (which I think sucks for Bensonhurst) and housing stock - not great.
Posted by: Brooklynnative at October 29, 2007 6:14 PM
Crown Heights is often overlooked - which means that as it isnt yet hot, you can find deals. In fact Im trying to get friends in on the RE opps there before everyone else finds out. Try Western Crown Heights - close to Prospect Heights and the B.B.Gardens. You would do well over there - and the subway links are very good.
Posted by: guest at October 30, 2007 4:15 PM
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