Deal Analysis (Beacon, NY)

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Deal Analysis (Beacon, NY)

Vivan BhallaPro Member
Member since 2024 · 30 posts · 38 votes

Hi all,

I am looking to buy a house in Beacon,NY and do some cosmetic renovations on it and rent it out. Would love some comments on this deal:

Purchase Price - 450k

Down payment - 5% (Since it will be primary)

Renovation costs - 75-90k (waiting for final bids but this should be the range)

ARV - 650k is the expectation

I am looking to keep this house for a few years and either rent it long term or just run airbnb on it. The good part about this deal is that there is an opportunity to build an ADU and a 2nd floor. That will help me rent out the ADU on airbnb and rent out one floor long term, converting it into a MF and with higher ARV.

However, that is a long term project and for now I am just looking at doing cosmetic renovations on the main house and not build anything.

Looking forward to hear your comments. Thanks

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  • John Leland
    Specialist · I give advice - [email protected] - I focus on states where investing is profitable, reasonably safe & secure · Member since 2026 · 125 posts · 39 votes
    23h

    What you are comparing is the utilization of time vs resources.

    Putting 5% down instead of 20% raises your monthly with Private Mortgage Insurance. Another consideration is tax write-offs. You get substantial write-offs if you live in it 2 of the 5 years preceding conversion to a rental. So, I would look at comparative costs, for 2 years and for 3 years and consider if you will have the finances to build the ADU.

    If your ARV is based on actual sales comps without adding in projected appreciation, you are a lot closer to what reality will be.

    I'm not familiar with Beacon NY but make sure there is a market for your plans.

    One good indicator is that hotels fill up and more sleep space is needed. The big question is "what is the draw" why do people visit there, what times of the year and what vacancy rate can you expect.

    So, over the course of the year, how much would realistically be generated, divided by 12 and would that cover all expenses? And lastly, don't expect every available night to be full the first year. It takes time to become the place to go to.

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  • Matthew MorrowBusiness Member
    Investor · PA - NY - NJ · Member since 2019 · 584 posts · 200 votes
    19h

    @Vivan Bhalla I'd pressure-test that $650K ARV the hardest. Pull sold comps, not active listings, and keep in mind appraisers don't always pay for nicer finishes, so a cosmetic reno can come in under what you're hoping. You make your money when you buy, not on the way out. On the reno budget, carry at least 10% contingency on top, more if you don't have a crew you trust yet. And check zoning on the ADU before you count on it. Good luck with it!

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  • Aaron Zucker
    Realtor · New York, NY · Member since 2019 · 34 posts · 9 votes
    14h

    Adding a few things from the NY side that haven't been covered yet:

    The missing number in your analysis is rent. At $450K plus $75-90K of renovation, you're roughly $525-540K in before closing costs and holding. Run the numbers as of the day you move OUT, not the day you move in: what does a renovated house in Beacon actually rent for long-term, and does it cover the mortgage, Dutchess County taxes, and insurance on a 95% loan? A lot of Hudson Valley deals look fine as a primary residence and bleed as rentals. Better to know that now than in year three.

    Also, $75-90K isn't really 'cosmetic' in NY — that's kitchens, baths, and usually some mechanicals. With 5% down conventional, if the appraiser flags health-and-safety items (peeling paint, roof, heat), the lender can condition the loan on repairs being done before closing, which a seller may not agree to. Walk your lender through that scenario now so it doesn't blow up mid-contract.

    On taxes: budget them at the renovated value, not the seller's current bill. Buying at $450K and putting $90K into a Dutchess County house is exactly how people get surprised at reassessment time.

    And on the ADU / second floor: price it as a bonus you pay $0 for today. Adding a floor and converting to a multi is a six-figure permitted project — lot coverage, setbacks, sewer capacity. A 20-minute conversation with the City of Beacon building department before you close will tell you whether that plan is even on the table. If the main house pencils on its own, it's a good deal with upside. If it only works with the ADU, pass.

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