Bedford - Stuyvesant Brownstones
Hello, I was just driving around BedStuy today and saw some brownstones I was interested in. I am relatively young (24 years old) I came across some multi-family ranging from 550-700k. I am not yet ready to purchase, but maybe in a year or so. I should be able to obtain about 10% down. If…
Hello, I was just driving around BedStuy today and saw some brownstones I was interested in. I am relatively young (24 years old) I came across some multi-family ranging from 550-700k. I am not yet ready to purchase, but maybe in a year or so. I should be able to obtain about 10% down. If its a 3 family brownstone, what do you guys think I can rent an apartment for (obviously it depends on square feet, # of bedrooms, etc) but on average how much can I get? Also, do you guys think its a good idea if the mortgage is approximately 3,500 a month and rent only covers 3000. Is it worth me putting in the rest? I currently live for free in an apartment my parents provide. What is anyones thoughts on my crazy idea? Any insight will help!!!
Hi Quik
I’m in my early 50’s now had my first 2 family hse in my 20’s still live in the same house and of course the value has more than tripled. Purchased a 4 family Brownstone as an investment property plan to keep that for long term investment in Bedstuy. The key is the neigborhood or should I say the block. Are you close to the train station is the hse upscale etc?. That will have a big play on the type of rental you get. We’re in the process of purchasing another BS in Bedstuy… I’ve never had a problem with the current rental. Now if yr getting $3000 for rental and you add the rest yr in good shape. I think you should go for it. I wish I had purchased more homes when I was younger like you I would be in great shape now. Anyway good luck I know its a bit scary but go for it….. Sometimes you have to take chances good luck tell us the cross street the hse is at?
Your finances sound really good. You might qualify for the mortgage with your brother ($130,000 income will qualify you for a mortgage of about $550,000, more or less — this is not figuring in rents). However, the debt you owe on the HELOC could be a problem, and they will also count student loans (but it’s small) and the car debt (if they know about it).
Phripley, he’s living rent free on $70,000 a year. Why shouldn’t he be able to save $10,000 a year? My goodness. And good for him.
I knew a guy who got rich doing this, but they bought in the 1980s in park slope. I’m not sure lightning will strike twice.
If you state to them that its an investment property the loan terms will be completely different….more down, higher interest rates.
Talk with a mortgage broker on this…call Adam Dahill who has posted many times here.
I don’t see how you get to 10% down on the purchase in a year, let a alone the 20% down that has been recommended above. Looks like you’d need money from the bro or folks for the down payment, no?
I think you’d be better off saving for a bit longer. Prices could still be declining for a couple of years after all. 2012 would be my target. Meanwhile save and learn all you can.
I don’t know enough about loan qualification to help you there…
Thanks for everyone’s advice so far! A bit more information about me, to see if im able to qualify for a 500ish k loan.
1. I have no credit card debt
2. My car payment is 250 a month (payment to my folks)
3. Student loans debt at 13k (3% for next 12 years)
5. Cosigner on HELOC with parents (100k HELOC, about 90% used) – plan to be under 30% by end of 2009. House valued last week at 800k
6. Credit score of about 740
7. 20k in 401k
8. 3k in stocks
9. 5k in cash (plan to have 15k by end of 2009)
10. Around 70k salary (if I go in with my brother total 130k salary) his score is 770, no CC debt only 40k in student loans
Hopefully this is decent.
Depending on the tax implications, I would or wouldnt live in it. I could either (1) still live at home for free and keep it as an investment and move in a couple years once I have more cash (2) move in and rent the other apartments.
Current I travel Mon-Thurs for work all over US, and realised Brooklyn is where I want to remain. My plan is not just to buy a house and flip it in a couple years. Its something Id like to keep very long term, as a place to live or potentially as more income; or even 10 years later enough equity to buy a 1 fam home for me and my future wife/kids.
You are so lucky! This is a great idea. I wish I could have done this at your age.
A few details:
*Try to save 20 percent, but it is not necessarily a requirement. You can currently buy a multi-family and get private mortgage insurance for 10 percent down, or even 3 percent, depending.
*Your income will have to be at a certain level to qualify for the size of the mortgage. Go to Manhattan Mortgage’s web site to use their prequalification calculator. Call a mortgage broker and get a free prequalification to see how much the bank will lend you.
*Are you ready for this responsibility? You will need to take care of repairs, be a responsible landlord, etc.
*Will rents go up and costs of buildings go up over the next ten years such that it makes more sense to own than to buy? Probably the answer is yes, but there may be some areas of Bed Stuy where this is not the case. However, it’s hard to predict the future.
*If your income does not qualify you to buy a building like this yet, or you feel you are not ready for the responsibility, please consider buying a condo or a coop where prices will go up while you own it. Then eventually you sell it, pocket the appreciation, and voila! You have a spare $150,000 or $300,000 or whatever it might be to start a business, invest, buy another building, or buy the brownstone of your dreams. (Note that coops often require a 20 percent down payment, where condos do not.)
*Keep your credit score high and don’t get into debt (except for a house).
Good luck!
Couple thoughts from a guy in his 40’s who owns and lives in a 3 family in park slope…
1. The buildings shown above appear to have 4 habitable floors. If you can handle living on one floor and renting out the other three (one floor through and the other as a duplex) you can bring in more rent.
2. I think you need to think very carefully about your timeline.
Being young you have the great advantage of being flexible in your lifestyle. You can relatively easily change careers, move to another city or country to find work or climate that suits your clothes, take time off to go back to school or travel.
Committing to home ownership and especially to being a landlord will take away a lot of this flexibility from you.
Are you ready for that? Because I don’t believe that this is a good time to buy real estate with a short timeline in mind. You are not likely to buy a home in 2010 and flip it for a profit in 2011.
There’s a lot of talk on these boards about how much further the market can be expected to drop and when it might recover.
There’s some scary stuff out there that we are a long way from the bottom:
http://seekingalpha.com/article/113843-housing-where-is-the-bottom
Are you going to get married? Will you have children? Will this home be suitable for them?
3. Draw up a budget
It was very helpful for me to have both a budget for the purchase (there are a lot of taxes and fees to keep track of) and a budget for the on going income and expenses of running the home. Once you have drawn up the budget pass it around to a friend who is a landlord or post it here for a reality check.
I don’t give the advice on 2+3 to dissuade you but for you to go in eyes wide open. The government makes home ownership very attractive in both lending and tax benefits. It is a great way to build wealth, but it is not without risk.
Hope this helps.
When buying a 3 family house always be prepared for the worst case scenerio.
In this case it would be a situation where the 2 tenants are not paying the rent or the apartments have not been rented. you must make sure that you can handle the mortgage payment on your own. do not depend on 2 renters to pay your mortgage. many people lost their homes in canarsie because they bought a 2 family house and needed the rental unit to supplement the mortgage.
If you were to buy a 12 family building then you would be more secure if you needed the rent to pay the mortgage.
if the mortgage is 3500 and your getting 3000 in rent…your doing well (as long as its your primary residence). however, you will have additional expenses which will average about 1000 per month (re tax, insurance, maint, heating, water & sewer…etc)
good luck…and its always great to start young