New Member / Brooklyn Brownstone, or no?

Question

Hi All!  New to the site and to real estate investing, so looking for some guidance on my first purchase.   I am thinking of buying a 3-4 unit Brownstone in Brooklyn, New York.  Would live in one unit and rent out the others.  Alternatively, I would continue renting (I have a pretty cheap apt currently) and use that capital to make other investments, including other real estate investments in other markets.

I don't feel particularly pressed to own a home at the moment, it's really about the numbers at this point.

Before I move forward, I am curious to know what all I should be considering as I decide a particular course of action.  Is it really just a matter of crunching numbers to see which option would potentially generate a higher return?  I am wary of any "unforeseen" costs of ownership in either scenario so trying to be sure that I fully vet both paths.

Would really appreciate any thoughts and of course feel free to ask any follow ups! Thanks!

Scott Wolf · Answer

You need to determine what your goals are, and head down that path.  If it's cash flow, then invest the money eslewhere.  If it's appreciation, then the Brownstone Brooklyn idea will work.  There are pros and cons to everything, you just need to find what works for you.

Scott Wolf · Answer

@Joe Tillman buying a 2-4 family in Brownstone Brooklyn would probably be a good appreciation play, but probably not net you positive cash flow if you live in one unit.

You’d have to find a property to run the numbers on, but my guess is it would be the same as renting(which wouldn’t be a bad thing, as you’d be gaining equity and able to write off the interest) or more expensive than renting.

Joe Tillman · Answer

@Jill DeWit thank you, Jill!

Jill DeWit · Answer

Welcome to BiggerPockets, @Joe Tillman. BP is maybe the greatest free resource to help you get started in Real Estate Investment there is on the internet. Congratulations and I wish you a ton of success.

Joe Tillman · Answer

@William Glass Thanks, William. Appreciate the feedback.

And would love to connect sometime.  Hadn’t really thought about looking into Queens and would be generally curious to know where folks are finding cash flowing opps as well.

Joe Tillman · Answer

@Eric Veronica will look into that, Eric. Thank you

Joe Tillman · Answer

@Dmitriy Fomichenko thank you! Will be sure to dive into these resources.  Really appreciate you sending.

William Glass · Answer

@Joe Tillman I moved up to Queens in October of 2018 and have been looking at properties in Brooklyn and Queens. The key that everyone has hit on is appreciation play vs. cash flow. As long as you are okay with an appreciation play then the Brownstone could be the right path.

The other piece is that the market in the city has cooled off for the most part and there is a lot of rental inventory on the market. I'd drill into the nuances of Bed Stuy and as long as it makes sense with your overarching goals then go for it.

Happy to connect sometime in the city as well.

Eric Veronica · Answer

@Joe Tillman If you do go this route I would suggest exploring the possibility of using the homepossible mortgage program to finance a multi-unit. If you are occupying the property as a primary you can acquire with as little as 5% down.

Rates are incredible

Loan limits north of 1MM if you are in a high cost area

Use proposed rents to offset proposed mortgage payment.

Lots of other advantages as well

Dmitriy Fomichenko · Answer

@Joe Tillman

Welcome to the BP family! Good to have you here!

Here are some recommendations for you:

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Wishing you the best!

New Member / Brooklyn Brownstone, or no?

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