All Forum Posts by: Alex Furini

I went through this same analysis a couple years back. I am a buy and hold investor and in the end the HELOC was the best option for me.

1. Use it, pay it back, repeat.

2. Low closing costs.

3. Can up the amount easily if your house increases in value. Just ask for a new appraissal(bank paid for it)

4. Great If your looking to have a quick source of cash for your next deal. You dont need to pay finance charges while you search for your next deal. Unlike the Refi cash out option, you just pull out money from your HELOC when you need it.

5. Mine is a variable rate and the rates are going up. If you plan on paying it off as soon as possible, its just a cost of doing business in my opinion. I don't think I saw a fixed option at the time or maybe there were additional stipulations that didn't work for me.

6. Biggest and most important, Allowed me to purchase my next property. Otherwise I would have needed to wait a few years to recuperate my funds. Equity baby!

I will follow all of this up with the fact that I have since paid the entire thing off which felt great. Waiting to repeat at the moment.

I used Citizens bank, but there are many many options out there.

Good luck.

@Sen A., I read through the document and I am generally familiar with the concept of existing rent controlled buildings in NYC. Question I have is, what is the process for determining rent control rents on existing buildings? 

Say I purchase a 3 fam non-owner occupied building in Union City today. Say each unit rents for $1,000 x3 = Gross rent $3,000. What is the effect on these rents now and in the future. FYI, This is just an example. I cant seem to find the actual financial calculation details.

I'm with @Denise G., my old NYC apartment had a shower window. 

As a tenant, I loved the feeling of cold winter air while taking a shower. 

As an Architect, I love the idea of light in the bathroom as long as the waterproofing is dealt with properly. 

As an investment property owner, I understand wanting to avoid any additional headaches that may come with potential water damage.

@Andrew C. You are totally right, which is exactly what Ive done in the past. Unfortunately if you buy a 2 family house in Brooklyn that actually ends up being a good deal based upon the numbers(per #1), 99% of the time its going to be a fixer upper. Thus the construction work putting in the sweat equity to increase rents, property values etc. If you can find fully renovated move in ready 2 family in Brooklyn that cash flows please PM me with your real estate agent. Id love to talk to them. 

Enrico,

As someone who has househacked in Brooklyn, I can say that househacking is an amazing way to invest. That being said as @Ali Boone has explained, like all good real estate deals, the numbers must work first. If the numbers don't work, you can be in a world of hurt. I would add a second point that even when the numbers work, you need to be prepared for not only a location change, but an interesting living situation for a certain period of time. 

When you get down to the basics, househacking is essentially living in a construction site for a indeterminate amount of time. I didn't mind it and thank god my wife didn't either.(no kids) I do remember many times wondering, how I could have done this with kids around. You would have to be very diligent with your work and organization. I don't know about others, but when I do construction, I leave tools and debris everywhere. Think sharp objects and debris everywhere on top of drywall dust covering everything you own. In no way am I trying to deter anyone from househacking, I think its amazing. Just make sure with kids you create a safe space for your family outside the "construction zone"(can be easier said than done).

Good luck with your project. PM me if you need assistance.

Referrals are great. Not always possible if you are new or doing your first project and don't have the connections. I completely agree with @James Dainard regarding a small deposit. I would add that retainage is another important safeguard which can be utilized. Retainage is a % of fee held until after job completion and owner/architect approval. It essentially helps to cover any come back work required from the contractor or to hire another to fix the deficiencies if necessary. Additionally, incremental payments coinciding with the % of work complete adds another layer of security for the owner. This is very important as many contractors will want to front end the fees leaving no money for the back end(which is when they could potentially disappear or ask for more $ to finish.)  If your using an architect, the contractor payment requests should go through him/her for review. This allows for general confirmation that everything is on the up and up prior to payment. All of these together creates a strong process to protect the owner and keep the contractor in line.

I saw the thread and was about to name drop Rent prep and @Steven white but I see I was beaten to the punch. Ive been using rent prep for 4-5 years now for my properties and can only say great things. Look no further.

Daniel,

There are a lot of factors to consider for this, but it is definitely much more feasible than converting a 2 family to 3 family. PM if you want to discuss further.

Zoey,

Based upon the information you provided and my best guess, your 2 family home is filed as residential uses. Meaning on the Certificate of Occupancy it shows Residential Occupancies. In certain Zoning Districts Community facility is allowed, but you would need to hire an architect to do a feasibility study to verify if this applies to you and what implications the change would entail. If it is possible, you would then need to file plans to change the use on the C of O allowing for Community facility in addition to any building alterations required to comply with the change. Only then could you rent out the space to one of the uses. 

As for where to find the Community Facility tenants, I would have to defer to others on BP.

If you need assistance with the review, PM me.

Alex

Julie,

This is a very involved question with many different ways to approach the question. In my experience, determining appreciation is really just speculation as it depends of so many factors. One could argue that we are at the top of a housing bubble. Especially with manhattan apartment prices being as high as they are. Others will tell you that prices will still climb. Both of those neighborhoods are nice and im sure the prices are fairly high up there already. If in fact you have found a deal and are going to be paying well below market rate, then that would have a big impact as well. 

I think the best advice is to find something you are comfortable with today and if it appreciates over time you have a nice added bonus. I see way too many people buy extremely expensive real estate in NYC at the top of their budget and say they will make money when they sell in a few years because the price always goes up. Maybe its because I am a more conservative investor, but at some point you reach the top of the mountain. Better to not be the last one holding the expensive stick in my opinion. Im sure there are plenty of people on here that feel the exact opposite, but thats just my two cents. Good luck with your investment.