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

    So this one was a budget buster.  I was hoping to get it done for 20k.  Almost done and I'm at 20 so looking like 25k.  The big stuff left is refinish floors($1050) and install doors/trim and molding.  Then there is a million little things after that.  Kitchen needs pulls etc. 

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    9y
  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    9y
    Sold. 1.7m
  • New York, NY · Member since 2016 · 25 posts · 1 vote
    9y

    Congrats @John Hickey. The magic of hard work and that appreciation !!! This is my first time reading of your experience with this property were you able to complete the 80K in repairs ? I know you stated you purchased with a FHA was that in conjunction with a 203K loan?

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

    @Xavier Mc holder yes I did eventually complete that project. That was a learning experience. Now I always have a reserve. Never over leverage. FHA is great to start out. but that is way too risky.

    No I've never used a 203.  If I was going to do something like that I would use hard money.  

  • Flipper/Rehabber · Yardley, PA · Member since 2015 · 451 posts · 307 votes
    9y

    @John Hickey quite the story and looks like everything worked out in the end (easier said then done right).

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    9y
    Mike B. There were some tough times no doubt. A bit crazy at times too..... here's a few of the things that stand out. Non paying tenants(as a newbie I did no screening), dead tenants, Silly fines from the city for nothing, attempted robberies where I ended up with the cops pulled guns on me. 30 recently released convicts as neighbors for a while, a jacked up 7' tall transvestite call girl/drug dealer was my least favorite neighbor. She would fight with her boyfriend and customers on the sidewalk in front of my house. She once threw a full 40 ounce beer through the front window on the house. That window stayed like that for 8 years. Midnight leaking roofs, frozen pipes in the street all that. I was looking over the final numbers and I noticed that my gross salary for the last ten years and the gross profit on the house are close enough to be noticed. I work 40 hours plus a week. I owned the house for ten years. I certainly didn't spend 25,000 hours on the real estate project. Even with all I mentioned and forgot to mention above the real estate money was easy money Here is the house https://www.corcoran.com/nyc/Listings/Display/4778829?gclid=EAIaIQobChMI5oedgJqa1QIVFzaBCh11kwDIEAAYASAAEgIyvfD_BwE
  • Flipper/Rehabber · Yardley, PA · Member since 2015 · 451 posts · 307 votes
    9y

    Looks great!  And the funny/small world story of this.. I went to school in Brooklyn.  Lived at Lafayette and Grant Ave, then at Fulton/Grand Ave.  Now i'm in Philly

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    9y
    Mike B. Thanks!! I've Heard great things about Philly. I like brick/brownstones so if I was closer I would be all over it.
  • Brooklyn · Member since 2018 · 25 posts · 2 votes
    8y

    @John Hickey Great job, you really hit a home run when you bought this property in 2007. Not sure if you mentioned but how were you able to buy it? Was it just listed for sale? This area is very hot now, especially with G train right there.

  • Brooklyn · Member since 2018 · 25 posts · 2 votes
    8y

    Also what do you mean by "I was looking over the final numbers and I noticed that my gross salary for the last ten years and the gross profit on the house are close enough to be noticed."

    Are you saying that you made the same amount of money doing your day job within the ten years?

  • Brooklyn · Member since 2018 · 25 posts · 2 votes
    8y

    Looking at the street view from 2011 says a lot, I can only imagine how it looked in 2007!

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    8y
    @Westlake John thx! Yes when I looked at my pretax overall profit in the flip it was really close to my pretax salary for the same amount of time. Being that I get taxed at a higher rate for wage earnings then i do for capital gains I actually take home more for way less work.
  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    7y

    @Eric A. @Llewelyn A. @Les Jean-Pierre

    Love to see all you at this.....next Friday.

    https://www.biggerpockets.com/topics/734837

  • Investor / Broker · Brooklyn, NY · Member since 2016 · 665 posts · 1k+ votes
    7y

    @John Hickey

    Thanks for the invite John! I can't guarantee I could make it but I'll try!

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    7y

    @Llewelyn A. That’s great thanks for trying.

  • Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes
    7y

    If it is tomorrow, unlikely. Will try if it is next week. Good group of guys to meet.

  • Rental Property Investor · Chappaqua, NY · Member since 2015 · 1k+ posts · 947 votes
    7y

    @Les Jean-Pierre

    We’re only doing this once out here in Bed Stuy. if you can make it be great to shake hands. If not maybe down the road. How’s the houses?

  • Investor · New York City, NY · Member since 2014 · 370 posts · 85 votes
    7y

    I'll pm you on the store. They did some nice work but were some bad tenants.

  • Member since 2024 · 1 post · 0 votes
    1y

    Hey John! Very interesting to hear about this.  I'm looking to potentially do the same thing in Queens now where there are some more affordable mutlifamilies. Would love to connect

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