2-4 multi family in brooklyn, new investor

2-4 multi family in brooklyn, new investor

NYC · Member since 2019 · 7 posts · 1 vote

Hi,

i'm in NYC and completely new to multi family investing. I have however worked for clients that have successfully bought and renovated multi family houses in the Brooklyn area. I've definitely been on the wrong side of the deal, I've gotten a fee but the greater profits come from coordinating the whole deal.

im an experienced architect so due diligence, navigating permits, contractors and construction I can handle but I'm a complete newbie when it comes to the best way to finance. 

id be looking at finding a good deal in a sagging market, completing a facelift renovation on all units then occupying one unit. 

i have an investor that will partner up in the venture with a legal background and we've narrowed down area, lot size, price point etc. 

my long winded way of asking a simple question is where do I start with obtaining a loan for financing? I've researched FHA etc., I'd love to hear from others who've been in the same position and what they've done before I jump into the arms of a mortgage broker.

i have great credit and earn a decent wage but from the preliminary research I've done it's a bit of a minefield out there and NYC is a beast in it's own right. Any help for this rookie would be appreciated.

thanks in advance 

0Reply
17 views

Most Popular Reply

Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
6y

@Aaron Williamson, I don't think FHA is an option if you're going to bring in an investor. You should confirm that with your lender. Speaking of which, have you spoken to any? Start with your local banks and CUs.

What do you think your all-in price will be? Total rents? How much can you put down?

See this reply in the discussion

4 Replies

Jump to latestLatest
  • Rental Property Investor · Greenwich, CT · Member since 2015 · 4k+ posts · 2k+ votes
    6y

    @Aaron Williamson, I don't think FHA is an option if you're going to bring in an investor. You should confirm that with your lender. Speaking of which, have you spoken to any? Start with your local banks and CUs.

    What do you think your all-in price will be? Total rents? How much can you put down?

  • Abel CurielBusiness Member
    Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
    6y

    Hello @Aaron Williamson,

    Looks like you've got some great background and experience for getting into REI!

    I agree with @Jaysen Medhurst, your first step should be contacting an FHA lender who can lay out your options. Once you have a sense of what your buying power is, its time to narrow down your search to specific areas or property types to target.

    I recommend connecting with a local Realtor as well since finding the deal and getting qualified for a loan is only the very beginning of the acquisition process. Buyer's agents are usually paid for by the seller so its a free service that is totally worth it!

    That being said, Cypress Hills, East New York, East Flatbush and parts of Western Queens that border Brooklyn (Ozone Park, Woodhaven) are some recommendations I have for beginning your search.

    Best of luck to you on your journey!

    Abel

    REbuild Team - eXp Realty5234 Reviews
  • NYC · Member since 2019 · 7 posts · 1 vote
    6y

    @jaysen medhurst  thanks for the tip, my next step is definitely engaging with a lender.

    Primarily in Bushwick and Ridgewood areas im looking at going all in at around 1.1M to 1.25M max. Depending on a number of varables. With a 5% cap. I'm happy to put down 25% and cover the renovations with cash. I'm looking at banking on appreciation rather than a cap rate here. I'm happy around 4-5% with fingers crossed the property value will increase substantially in 6-8 years.

    im also looking at bigger lot sizes, corner lots and proximity to wide streets to maximize potential FAR if I wish to syndicate and develop the land further down the track.

    @Abel Curiel thanks for the tips, I hadn't considered those areas but will absolutely check them out. I'll also start looking at agents, is this the best way to  find off market deals? I'm sure that what you see in all the big sites are just a fraction of what's available.

    thanks to you both 

  • Rental Property Investor · Brooklyn, NY · Member since 2008 · 92 posts · 59 votes
    6y

    @Aaron Williamson, I'll try not to repeat the great advice you've already received. However, it really does sound like you have the hard stuff already covered between legal and architectural. I think your target areas are dynamite and prices realistic. You can snag yourself a 3 family in Ridgewood for that range easily. The areas @Abel Curiel mentioned are moving too. 

    I think the missing piece of your puzzle is a superstar broker/agent. A really good one can point you in the direction of a good lender and contractor (if you need). You should have a good idea if you can swing a 1m loan between your income and that of the property. Make sure you're realistic. 

    A direct answer to your question regarding financing is this: Make sure you have your past 2 years tax returns already prepared, 2 recent pay stubs, 2 years w2, and a concise statement of your debts. Having this ready before you talk to a loan rep will save you an awful amount of time. If you need a recommendation PM me. I am in the middle of closing 2 loans and the loan rep made things happen quickly and the rates were extremely competitive.

Join the conversationCreate a free account to reply, vote on answers and follow this thread.