Long term BRRR in Bed Stuy Brooklyn, NYC John Hickey

Long term BRRR in Bed Stuy Brooklyn, NYC John Hickey

Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes

I left of the last R because even though it would like to repeat in Brooklyn I'm not sure my credit will stand it at this point.  

I bought this building in June of 2007 for 714k 2160sf bulking was vacant. I used and FHA with 3.5 down I got a 5 year interest only followed by a 30 year fixed at 6.375. The patent on the 30 year with taxes and insurance was 3900 or so. The building was partially renovated in poor taste. Nice wood floors but ugly kitchen and baths. I rented two floors and lived in the other for a few years. The rents for units 2,3 was 1400 and 1450. Shortly after the crash my tenants learned that condo developers were renting out luxury apartments in the area for around the same rents I was charging so I was forced to lower rents. 1200/apt 2 1050/apt3. In 2009 I renovated my own apartment and moved out. I rented the apartment for 1300. In 2013 I renovated the top floor the rent was 1050 before and 2700 after. Here are some photos during Reno and after. The Reno cost around 80k. It's a 3bed 2 bath with central heat/air. I also renovated hallway and replaced all staircases with a new oak staircase. Shortly after I was able to refinance the property to a 30 year @ 4.25. My payment after was 3461 rents 6350(with new tenants coming in I raised rents in apts 2 and 3 to 1800/1850 respectively.

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Rental Property Investor · Brooklyn, NY · Member since 2014 · 92 posts · 17 votes
10y
John Hickey Nice thanks for sharing.
See this reply in the discussion

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  • Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes
    10y

    The vacancy is the commercial unit. Might have a tenant that will sign a ten year lease and drop some money into the space. Let's see what happens. I have a residential unit that might come up soon. I don't think I will do anything just yet. But, will likely put in the dishwasher next go round. I am actually thinking of converting it to an Airbnb rental. Also, I had Section 8 tenants and got a bunch of energy upgrades through a state program I found. Long wait but I got a lot of upgrades for a very low price.

  • Lawrence L.Pro Member
    Rental Property Investor · Bronx, NY · Member since 2008 · 144 posts · 64 votes
    10y

    @Les Jean-Pierre 

    Had Section 8 tenants and got a bunch of energy upgrades through a state program. What state programs are you talking about

  • Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes
    10y

    @Lawrence L. Look up NYS Weatherization/Empower. I can mail you the link. They will take it down if I post it. It was a long wait but I got a lot of good upgrades.

  • Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes
    10y

    Sent.

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    10y

    @Lawrence L. thanks very much almost there!

    I moved the bathroom from the back of the apartment to the front so all new plumbing we also reconfigured the kitchen and moved that a bit too.  We rerouted  two waste lines that ran from the top floor to the basement se we could reclaim some space that had been unusable.  I try to do as little as possible with plumbing of I can. The costs to just do a iittle can be really painful. On this one I had to but the bullet because they had converted a bedroom to a bathroom at some point and I really wanted to restore that bedroom so invoked claim the higher rent.  

  • Lawrence L.Pro Member
    Rental Property Investor · Bronx, NY · Member since 2008 · 144 posts · 64 votes
    10y

    @John Hickey Awesome move to create some more value.....How did you find the plumber and I just want to be clear the plumber did all that for what you said in the earlier post great.... Can you please mail or pm me his number 

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    10y

    @Lawrence L. I'll PM you.  

  • Bronx, NY · Member since 2016 · 115 posts · 21 votes
    10y

    @John Hickey

    you're welcome. Yes i am in the Bronx market and looking into closing on a 2-4 family unit property. i am currently looking into different methods of creatively funding the deal and looking into partnerships to create capital. . I will keep you posted on how it turns out. 

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    10y

    @Les Jean-Pierre

    I would love to do Airbnb.  Worried about the city cracking down.  Have you looked into homesuite.com? They have a cool thing going looks like if you can get the business going it's about the same money as Airbnb.  The way the rental market is these days, Airbnb isn't that much more with vacancy and all the other stuff.  

    Good luck with the vacant space.  Commercial was my forte before I got into residential.  I did a lot of cheap and cheerful Reno work on commercial spaces.  I worked for a bar company and we went around grabbing beat up spaces and turning them into hot nightclubs. 

  • Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes
    10y

    I will look into homesuite. Depending on how the tenant works out, might ask you a few questions. Thanks!

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    10y

    Progress is slow as we plod into the final week. I was hoping to rent this unit for May 1. That would have been a 75-80 day Reno.  I might have to hold off renting till next month to avoid the scraping of a tenant off the bottom of the barrel last minute.  

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    10y

    Little hiccup since last posting. I probably would have noticed if I was onsite more but it slipped past my foreman also so who knows..... The plumber and electrician ran the gas pipes and electric for stove to the wrong spot....the electrician followed the plumber as usual  but there was a drawing in the apartment and the plumber had the drawing in his messages.  He just reversed the refrigerator And the stove.  My guys had to take the whole wall down and rerun everything.  1.5 days lost.  

    Not the worst thing ever, I should have looked more closely.  

    Think I might rent to a small Brooklyn company that does executive rentals....I would do it myself but my job has noticed I'm not as focused on my work as usual.  

    Question has anyone read getting things done? Or gone to a GTD workshop?

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    10y
  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    10y

    The good the bad and the ugly.... Apartment is almost ready have a few interested tenants. Occupancy May 5-6 if we keep on schedule.  Went over budget and still counting.  Looking like 59-60k. Gas company couldn't schedule to turn in gas till 5/6!!!

    Hers is the ad for anyone following.....

    http://newyork.craigslist.org/brk/reb/5552592547.h...

  • Bulawayo, Zimbabwe · Member since 2015 · 1k+ posts · 253 votes
    10y

    congratulations on the BRRR

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    10y

    @Virgilio Garcia thanks! The walls are Home Depot subway tile .69 SF I've had the boxes in my garage for a couple of years. The floors are marble octagons also Home Depot 9.99 SF. I needed about 50sf so that was pricey but they last a long time and can be buffed to new if they take a beating. The bathroom tile was 4 days labor give or take but he was also knocking out other stuff.  

    Good news the apartment is rented 6/1.  $2800.  But the best part is the guy I rented to is going to take the super job (trash, sweeping, snow, minor fixes) so that really like 3000-3100. 

    Now I have to go to the bank.  

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    10y

    @Bhekizwe M. Thanks!

  • Bronx, NY · Member since 2016 · 115 posts · 21 votes
    10y

    @John Hickey

    The progress is looking amazing. I really appreciate the photo details. How are you going about getting your tenants? is there a particular group you are aiming for ? what about the screening or vetting,  how is that working out for you ? 

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    10y

    @Virgilio Garcia Thanks for the input! I did three thiings to rent the unit.......First I put an ad up on Craigslist, and Zillow rental manager which cross posts to trulia, postlets and another I cannot recall.   Next I interviewed agents and found a good one that takes his own photographs( ex photographer so they were good).

    The Last thing I did worked..... I had been somewhat interested in short term furnished rentals (30 days or more) I looked into Homesuite.com then I called a few operators around me to feel out the competition.  After talking with an operator I felt he was a good choice for a tenant and he mad a great offer above market for the apartment so we agreed.

    In the past I would usually rent my own units and to stay competitive I would keep an eye on the rentals in the area and try to be one step above if I could....This time that was a little tougher as the neighborhood hasn't gotten very trendy. So I just went with a clean design, laundry in the unit, HVAC, and new appliances sealed the deal IMO

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    9y
    New corporate tenant is working out really well. In August my last remaining tenant moved out. It was a good and bad thing because I had just renovated the second floor, had already moved onto a guy rehab in westchester and money was tight. I asked my corporate tenant if he would like to take the unit. He did not like the condition of the unit but he volunteers to find the rehab if I used his guy and paid him back in a year. So we signed the promissory and we did a quick lipstick Reno. The rent in that unit had been 1800. After spending 16,000 he's paying 2850. Im still clearing more than 1200 a month and he handled all the work. Good news was that I was in a refi at the time. The extra 1050 a month definitely helped with the bank. The appraisal came in at 1,350,000. Up from 714 in 2007. I was able to cash out for 195. New loan is a 10/30. Fixed at 3.5 for ten years variable after that up to 10.50 with 2 point max every two years. New payment is 4150 including taxes and insurance 80 water Hot water bill is 125 Rents 8350 Very happy with my first BRRRR
  • Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes
    9y

    Good numbers. I was on the site and decided to look at my discussions and saw you updated it. The store is rented. Came close on two Mexican restaurants but they fell through for one reason or another. But, will have a coffee shop. They made the store nice(on their dime). I have questions about their business acumen though. My units are rented but one tenant is month to month and under market. I will be getting rid of her shortly.

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    9y
    Les Jean-Pierre just saw your response! That's great how did it go with the tenant? I'm redoing the first floor apartment. Second time in less than a year. That corporate tenant asked to do some more work on the kitchen and bath. A week into that i came across a really priceless deal that I can't turn down. Donnie I'm selling that place. In the process of redoing kitchen and bath and sprucing up the yard. I'll keep you posted. Might even put a bath in the basement. Agent says it's worth it.
  • Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes
    9y

    The coffee shop is open. They might have overspent on the renovations. I can't believe the change. The store is beautiful now. Some minor plumbing issues but nothing crazy.

    Selling the place? I didn't think there were any deals left in Brooklyn! Good for you.

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    9y

    @Les Jean-Pierre I'll be in Brooklyn a a few days a week maybe I can check out that coffee shop.  I'll

    Tell you about he deal.

    We're just finishing up Demo on the first floor.  That and reframing the basement rec room.  The basement was finished ten years ago.  This was one of my first projects and it was poorly done.  The tile is very dated now.  I could pull it up and redo but it's not level to start with and I have good height down there.   So I'm going to level quick it and call it a day.  The idea is it will be clean and level and the buyer can do carpet, tile or laminate.  We're going to go with the raw level quick.  I've done it before in a flip and the buyers were ok with it.  

    On the main floor I'm going to redo the kitchen and bath, again this was my first Reno so everything was poorly done. Floors will get stained and refinished   

    Back yard and front yard will get freshened up along with a coat of paint for the facade.

    Budget is 20k

  • Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes
    9y

    Looks good. I have a day job but if you are around Saturday, maybe we can meet up. I'll inbox you.

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