Hello BP Family,
I have a potential house-hack deal cooking. I'm thinking of buying a multifamily property in Mt. Vernon, NY. in a "sketchy" neighborhood. This is a legal 2 family house (that will be newly renovated inside and outside) with a basement that could generate income as well. It has a two-car garage that's connected to the 3 bedroom unit that I will potentially live in.
The property is on the expensive side (450K). I don't believe that the property will increase much in equity but the two bedroom and basement combined can potentially pay the entire mortgage while I'm living in the 3 bedroom and will cashflow when I move out.
Should I do it or not?
Your BP friend,
@Bill Thomas At this point you're probably better putting all of our data into the BP calculator and screenshot it to share here. Just off of the top of my head I can't fathom paying $450K for a pseudo triplex (assuming you could legally rent out the basement) in a sketchy Class D neighborhood. I don't know a thing about Mt. Vernon so I'm taking you at face value on those things. You could probably go to flyover country and $450K could get you an 5-plex or 8-plex in an area that isn't sketchy or a Class D area. Living in it won't help, mortgage terms are different, but you'd at least be (hopefully) able to nudge up rents over time to force appreciation. When I think "Class D" I don't think "appreciation" because there isn't usually much value in the ol' dirt. If I don't want to plan on the dirt to appreciate then I'd at least want to look at forcing appreciation through raising rents. Anyway, this is all "cart before the horse" because we can't see your numbers. And for all I know, $450K in Mt. Vernon could be the greatest thing since sliced bread...
I'm definitely going to put the info in the calculator and evaluate the deal. Good advice. Thanks Andrew.
$450,000 seems really high. Also, would you feel safe living in a class D neighborhood?
@Bill Thomas based on your input that the neighborhood is "sketchy" and the multifamily is expensive, it does not sound like this is a winning proposition. I would be concerned about the quality of tenants that I could attract to the property and the challenges associated with managing a property in a D neighborhood.
Invest in sketchy, D-class areas, and you end up with sketchy, D-class tenants and all their drama & headaches.
Not worth it.
I hear you about the sketchy tenants Ryan. I've been there before but I didn't live in the area and I inherited the tenants. In this case, the building will be totally renovated, I will be living in one of the units and I plan on vetting the tenants personally. Plus I will start the eviction process ASAP as soon as they break lease terms. It would be a huge lifestyle change for me because I currenrly live in the suburbs with an onsite swimming pool, tennis courts and Riverside views.
Does anyone know someone that has had success in this type of neighborhood?
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