Evaluating a 4 Family Brownstone Gut Renovation in Brooklyn

Member since 2019 · 2 posts · 0 votes

Hi,

I have identified a 4 family complete gut renovation in a nicer part of Brooklyn. When I say gut, I mean it, there are holes in the floor and only 1 bathroom. Before I dive into this purchase was curious to get everyone's thoughts on what kind of due diligence I should definitely do before making an offer. My thoughts are do a rent analysis (for post renovations) and get some quotes from contractors.

I've reached out to a few contractors already to try and get some quotes, but most won't get into the details with me until after I have an accepted offer. If anyone has some ballpark range of what it costs to gut renovate a 4 family in Brooklyn (or similar) that would be amazing!

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Ahmed Saad

Rental Property Investor · Brooklyn, NY · Member since 2008 · 92 posts · 59 votes

If there's no C of O look for an I card. A lot of properties in NYC do not have a C of O but the I card should be sufficient. Google "NYC DOB BIS" and search. Also, if it has been sold in the past 20-30 years, or has a loan there will be history validating it IS or IS NOT a 4 family.

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Abel CurielBusiness Member
Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
6y
Originally posted by @Nicholas Sewitz:
Hi,
I have identified a 4 family complete gut renovation in a nicer part of Brooklyn. When I say gut, I mean it, there are holes in the floor and only 1 bathroom. Before I dive into this purchase was curious to get everyone's thoughts on what kind of due diligence I should definitely do before making an offer. My thoughts are do a rent analysis (for post renovations) and get some quotes from contractors.
I've reached out to a few contractors already to try and get some quotes, but most won't get into the details with me until after I have an accepted offer. If anyone has some ballpark range of what it costs to gut renovate a 4 family in Brooklyn (or similar) that would be amazing!

Hey Nicholas,
Its pretty typical for contractors to only want to come by if there is an accepted offer on a property. The estimates are typically free so they want to, at least, make sure there is a possible deal there before taking the time out.
Do you know the interior square footage or building size of the property? Contractors or experienced house flippers may be able to give you a ballpark figure based on that information.
Aside from getting that estimate/ballpark #, I would determine the ARV of this property. A local Realtor should be able to get you sales and rental comparables.
Feel free to shoot me a message, I'd be happy to point you in the right direction here.
Best of luck to you on your journey!
Abel
REbuild Team - eXp Realty5234 Reviews
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George W.
Investor · NJ · Member since 2018 · 869 posts · 921 votes
6y
Was it ever legally a four family? Asking because you said there's only one bathroom Currently. If it's not zoned for 4 family that could be a challenge. The DOB is a major headache to deal with in NYC. Pulling permits and doing things legitimately will not be cheap. Also it can be quite time consuming just dealing with the logistics end.
As far as the actual cost of a gut and renovation it can vary drastically depending on desired finish. Depending on where it is in Brooklyn you might not even be able to get a dumpster in front of the building to demo it easier. Alot of the old apartments there settle and have old joists that have been cut and hacked by many plumbers over the years and need structural repairs. If you separate out the utilities that can be quite expensive because now you need 4x heating systems, 4x plumbing risers & meters, 4x electric systems etc and permits for all of that. Ive had permits that have taken over 3 months to get approved there before.
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Aaron Williamson
NYC · Member since 2019 · 7 posts · 1 vote
6y
Nicholas,
Sounds like a fun project, brownstones can run anywhere from 200 to 450+ a square foot for a rehab. Sure you can get by on the low end but with those great old buildings you may want to consider accentuating the original features, putting in a decent HVAC, redoing the plumbing and boilers, insulation and maybe even facade work. You'll spend alot but there is definitely a market for high end rentals in the nicer areas like Clinton hill etc.
is this building in a landmark area and does the C of O currently state a legal 4 family? Changing the occupancy is a major pain and a lengthy process that will add some hefty filing fees.
good luck, I hope it goes well!
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Nicholas Sewitz
OP
Member since 2019 · 2 posts · 0 votes
6y
Thanks everyone. The building is around 2400 sq ft (not including basement). The building has been paying taxes as a 4 family for a number of years, but the sellers agent says there is no CO, so I will have to go through the process of getting that as a 4 family. Not sure if anyone thinks it will be easier to get since there is no existing and its taxed as a 4 family.
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Ahmed Saad
Rental Property Investor · Brooklyn, NY · Member since 2008 · 92 posts · 59 votes
6y
If there's no C of O look for an I card. A lot of properties in NYC do not have a C of O but the I card should be sufficient. Google "NYC DOB BIS" and search. Also, if it has been sold in the past 20-30 years, or has a loan there will be history validating it IS or IS NOT a 4 family.
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Michael Baker
Real Estate Agent · Jersey City, NJ · Member since 2014 · 55 posts · 21 votes
6y
@Nicholas Sewitz what is the asking price for the property? Also, what are rents in the area?
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