Lakewood, NJ · Member since 2015 · 10 posts · 0 votes
Hello BP!
I have been presented with an off market deal in the Clinton Hill/ Bed Stuy border in Brooklyn. - purchase price would be 1.5 Million - its 4 stories and requires a gut renovation.
Supposing that this is a great deal - how would i finance the 600-700K renovation ?
I expect to have four large units when done - Minimum two Bedrooms each.
Questions - at face value , does the deal sound good? How would i finance the project?
Neil Stern
Hey, couple questions.
1) what do you mean "finance a 600-700k renovation? Is that how much you are looking to put into the property on top of the $1.5 million?
2)What are your potential exit strategies?
-A) You are looking to flip by increasing value in property with renovation..... What are comps in the local area? I know that some specific streets in Brooklyn have had record high sales of up to $15 million for a four-story property. If this is property is in that area then this might be a great opportunity. If comps in the area don't give you that spread then flipping is not an option here. Unless you're speculating that prices have been growing tremendously and that prices will continue to grow.
-B) You would like to rent out the property. I don't think the return on investment would really rationalize this course of action. What are comps in the area in regards to rentals? My impression was that rentals are not relative to the property price i ny.
let me know what you think of my two cents,
Shmuel Harris
Shmuel, Thanks for your response - My question regarding renovation was , if i need to do 6-700k in renovations, can that be financed? construction loan? etc.
My exit strategy would be to bring the value up and then sell (assuming the comps are predicting greater value then my costs) Preliminary research indicates that the cost per square foot may be significantly higher then i would be paying, when all in..
I don't know the exact address, but knowing the neighborhood pretty well I wouldn't do it, the numbers doesn't add up, I can hardly believe you can sell it for more than 2mil. But if you make your calculations, and you have a "trusted" broker that supports the price you're planning to sell it for, than go ahead.