Need help making a decision

[Eric Fung]

Buying a wood frame stucco finish vs brick in Brooklyn ny. If I have a accepted offer for a wood frame stucco house do I buy that or wait for brick house that 100k more expensive with tenants that will be looking to move but can’t due to difficultly finding a rental at this time in the winter. (I’m going to be house hacking) so I need at least 1 family to move. Plus just thinking ahead, bank might not appraise and will have to (not saying it will happen but just thinking ahead since I’m offering 150k over asking) come out of pocket to meet the difference..So torn!! Please help! Biggest decision of my life! Pros and cons of stucco houses? Good buy?

[Doug Crenshaw]

Hey Eric! 

You hit on a bunch of different aspects! While I am not in NY area I do know about wood frame stucco homes since that is about all that is built in Florida! As long as the person who did the job knows what they were doing I would say you should have a solid enough structure. I always recommend doing a Home Inspection to make sure everything is in working condition. If there is a problem then we can find out before the end of the inspection period. If the seller doesn't want to fix the problem or drop the price then we walk with no harm no foul.

As far as the "hoping a family moves out" that should be on the shoulder of the seller as a stipulation in buying the property. If they do not have a lease then you can request that the seller remove the tenant and let them deal with getting them out. Last thing you want to do is try to take care of that after the closing, especially if you are the one left out in the cold.

Did you have an Appraisal Contingency in place? I don't know the RE Laws in NY, but in Florida we can add in that the purchase price is contingent on appraisal so you don't go into the property upside down. I have helped several investors get out of bad deals with that simple addition to the contract. May not be add it now, but you may want to look into that for the next one...

What to do is totally up to you to decide, weigh out the pros and cons, run the numbers, do the inspection, and use your gut instinct. Gut Instinct will tell you if you feel good about it or not, and is a pretty good indicator too. If you don't feel good about it then it will fail, because you have the mindset that it will and you will make subconscious decisions to ensure that it will. If you feel good about it then your subconscious mind set will help you succeed. Might be a little on the woowoo side of thinking, but I see it all the time!

Hope that helps and I hope you get through the tough part of the decision process!!! Good luck!

[Abel Curiel]

Hello @Eric Fung,

@Doug Crenshaw shared some great nuggets there!

In a situation like this in NY, you would make an offer contingent upon home inspection, 50% vacancy and appraisal. This way you can back out of the contract if 1 unit is not delivered vacant, the engineer report from your home inspector determines the structure is unsafe, and/or the property doesn't appraise for contract value.

Regarding brick vs. stucco, this will be a judgement call. Doug knows more about this on the construction side and an engineer inspection will verify the safety of the building. 

Your decision should be based on your long-term goal. Many househackers we help are looking to go from 0-6 units in 2-3 years. 

That said, if the stucco deal: 

- brings you more cashflow/savings  

- saves you $ on acquisition costs

*Thus allowing you to get to your NEXT deal quicker/easier

- AND is in good structural condition

I'd go with stucco over brick.

Best of luck to you on your decision!

Abel

[Eric Fung]

Great replies. Thank you both. Getting inspected today. Will keep you updated! Ty again!

[Bruce Woodruff]

Brick is more solid structurally than stucco (by a slim margin), but either will do fine if in good condition.