Buying Apartment Building in Brooklyn

[Rishi Malhotra]

In both Brooklyn and Queens, I see apartment buildings like this one - https://www.zillow.com/homedetails/695-Meeker-Ave-6-Brooklyn... - which seem like a reasonable price for the area. This one is 1.1M for a 6 unit apartment building, in the area typically a solo 2 bedroom condo is in the 1-2M range. 

Has anyone purchased properties in NYC with these prices? What is usually the catch?

[Abel Curiel]

Quote from @Rishi Malhotra:

In both Brooklyn and Queens, I see apartment buildings like this one - https://www.zillow.com/homedetails/695-Meeker-Ave-6-Brooklyn... - which seem like a reasonable price for the area. This one is 1.1M for a 6 unit apartment building, in the area typically a solo 2 bedroom condo is in the 1-2M range. 

Has anyone purchased properties in NYC with these prices? What is usually the catch?

Hello Rishi, and welcome to BiggerPockets!

The catch here is that this is most likely a rent-stabilized building.

Income for properties like this is much lower than that of free-market buildings.

For example, the subject property earns $101K in annual gross income while a free-market THREE-UNIT building in the same neighborhood would gross $125-145K annually.

NYC's policies are already considered to be 'tenant-friendly,' and that is even more so the case for rent-controlled & rent-stabilized buildings.

Lastly, we are anticipating a 2-year rent freeze for buildings like the subject property.

I'd recommend mixed-use buildings in select neighborhoods, small multifamily buildings i.e. 2-4 units, and other free-market buildings.

All the best!

Abel