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October 23, 2009
Help/Advice for a Beginner
Ok, I'm a noob on this site, and to brooklyn real estate. I've been living and working in NYC since '98. I owned a co-op in Bay Ridge from '01 to '05, and I've been renting a 1 bdrm in battery park city since then. I've recently decided to buy a brownstone, to live in one floor, and rent the rest out. I'm looking primarily at Carrol Gardens, Cobble Hill and Boerum Hill. I'm just getting started, using a Corcoran real estate agent.
I would love to get advice of any and all kinds. Suggestions re web links, articles, real estate agents, types of properties, usual problems encountered, etc., etc., would all be greatly appreciated.
Thanks!
Comments
A few basics that the realtors always get wrong:
5+ units are considered "commercial" by mortgage standards and you'll only get financed based on debt-service (basically 9x the rent roll minus expenses).
I can't tell you how many realtors told us we could get 80% financing on a 5+ unit building (we own a few and are always looking...). It's just not true. Also, 5+ family mortgages don't care about your income, they only care about the buildings income/expense sheet.
4 unit and less get financed based on conforming loan limits, on a sliding scale. 4 family conforming limit is roughly $1.4 mil I believe. 3 fam is less, etc. In addition, you only get 75% of the rental income counted (takes in to account vacancy rate) and you can use your income to supplement the building income for financing.
Realtors love to tell you "it's easy to get tenants to move". No. It's not. Look for building "delivered vacant" or owner occupied knowing you'll be moving in to the owners unit after closing. Month to month/"tenants at will" are good, but there can be feet dragging with them too (if you wish to occupy one of their units).
That's all I can think of right now. I grew up in the Heights, own and live in CG now (3rd generation landlord ;) ) and love it. If I think of anything else I'll post up.
Posted by: christopher at October 24, 2009 6:13 PM
When you find a place you like and put in a bid, make sure it's contingent on an inspection. Get it inspected by a licensed structural engineer, not just a licensed inspector. Hire an independent inspector, not someone the agent recommends. Heimer is one.
Posted by: mopar at October 24, 2009 7:10 PM
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