All Forum Posts by: William Gan

@Eli Rollins - A great way to gauge your airbnb returns is to look at a site like AirDNA or Mashvisor. Doing a quick look at Mashvisor (link to my 1-second search here), it seems like your assumption is right - traditional renting is likely a better prospect than airbnb, but worth checking a few comparable properties (comps) to see if your hunch is right. 

Mashvisor will give you some basic estimates on airbnb CoCR and cap rates, and will also link you comparable properties if you click on any given property. I would find a property that you feel is similar to yours (looks + location wise), and take the revenues from it + a few comps to see if you'd have appetite to try it out. 

Haven't used AirDNA as much, but folks say it has more reliable data than Mashvisor. Maybe worth a trial shot to verify potential returns  :)

Thanks everybody for the input and great discussion! Given I'm fairly new to this and there are some pros to having just a unit vs a building, I won't completely rule out condo searching then. At the same time, it does seem MFRs have better financials than I thought - just about finding the right deals there; will keep an eye for them too. 

If folks have any good real estate recs, would love to hear em :) PM or thread - either works great. 

@Jason Lee - thanks for the input. As mentioned, I'm a little new to the process so good to know these things. I did a quick lookup on requirements, and according to this link, I believe it does. There's a master 17x17 bedroom with 3 windows, which I imagine can be converted to a 8x17 and a 9x16 (a 1x2 hallway to avoid railroad situations) while still ensuring all rooms have a window. 

I was a little incredulous about the price too. Based on your surprise - I'm guessing this seems to be a decent price if all is actually well. Would appreciate any other input :) 

Hi all, 

I'm looking at buying a 3 bed condo unit in Flatbush (converting from 2), and the numbers seem ok given that I think I'm being conservative on appreciation and rent increases. However, I'm brand new to all of this, so appreciate any calibration on what my numbers should actually be. 

Key questions for me are:

• Are any of my expenses majorly off? Esp. not sure what's a normal amount for insurance (building built b/w World War 1 and 2), maintenance & repair. I assume water/sewer/common electric/deferred CapEx all bundled in common charges.
• What are people generally looking for IRR-wise? I know CoCR is more or less moot for NYC, but IRR takes into account appreciation as well...and at my current (albeit conservative) assumptions, I'm only getting 7-8%. Barely better than throwing the money into an index fund long-term...except I get more control/upside here.
• What are the best ways to gauge condo management health? Major risk seems to be a large increase in common charges - are folks asking for board reserve amounts pre-offer? 
• What sources are you guys using to get more comfortable with area growth assumptions? Right now - it just feels like Flatbush is purely banking on spill-over from PLG, vs. any major development driver (e.g. Sunnyside Yards, Looking specifically for any news/info sources folks recommend subscribing to (or if it's just their experienced realtor feeding them info, that's good to know too)

Sales comps-wise, it's sitting at low $500s per sqft vs. some freshly built condos at high-$680s-$780s, which seems like a good deal. Pulling recent rental comps, 2 beds sit at around $2100, 3 beds go for ~$2500-$2700. I figure conversion would put me somewhere in the middle. 

Thoughts? @Adam K - I see you post about Brooklyn a lot, so would especially value your thoughts :)

Some other notes that may be helpful:
-Live and rent in Brooklyn Heights, so anything that reduces my net burn is good (totally fine with roommates!)
-Would self-manage the property for the 1st 2 years, and then possibly hand over to a PM (assume vacancy, PM 0% 1st 2 years)
-Property is a pre-war walkup with some basic value-add updates 

William

Thanks for the great pointers @Llewelyn A. and @russell brazil, as well as the great discussion points from everyone else. It's always helpful to understand more experienced investors mindsets, and it was a big takeaway for me to hear that even folks who are ok with breakeven value reasonable safety buffer first and foremost. Definitely also resonate with finding and retaining good tenants - goal of RE is to be low headache not high :)

A follow-up question then - is there any reason why investing in condo units is worse than investing in a full house?

At least based on my initial searching - it feels like I've been able to find much better financials on units vs houses. And that's factoring only CC+tax+mortgage, I assume house ownership means you also have additional burden of recurring water/heating charges + overseeing the occasional major capex project.

@Michael McKay - given the recent federal judge overruling of de Blasio's bill, will this meetup still be happening? 

If so - I'm guessing the content will focus more on protections in today's environment, vs the original future?

Hi all,

My name is William and I currently live/work in Brooklyn, NY. I moved to NYC about 4 years ago, and have been renting so far, but realized financials are much better on the owner-operator side. 

My goal for my first property is solely to decrease my net "rent" (i.e. off-set my rent burn via equity build-up). I think I would then either 1) continue buying more units in NYC (breakeven cash flow, but high rate of mortgage pay-down) or 2) try my hand at out-of-state investing with a turnkey operator (much higher CoCR, but different risks). 

My long-term goal is to make real estate a passive source of income to my full-time work, so I am ok with trading off better returns for lower complexity on my end. Would greatly appreciate any general advice experienced folks have for starting off, as well as any specific thoughts on the topics below. 

@Russell Brazil and @Llewelyn A - would especially appreciate your thoughts, as your philosophy of wealth creation via mortgage paydown gave me some social proof / confidence in this approach. 

• 1) A key assumption of the mortgage-paydown philosophy is that real estate and rent will hold its value over time (if not grow). How do other NYC investors think about hedging against a market / rent crash? 
• 2) What are the downsides to consider when starting off with a unit as opposed to a multi-family? As a first-time landlord, owning a condo unit appears to have several advantages over owning a building - e.g. major CapEx projects undertaken by the building instead of you, less tenants to manage, and an easier time getting a conventional loan.
• 3) How are people's views on Flatbush/Sunnyside/Jackson Heights? Sunnyside Yards seems like major upside potential, but curious if people think property values already reflect that. Flatbush seemed like it would be a logical extension of the Prospect Lefferts Garden boom, but for some reason people flocked to Bushwick / Bed-Stuy instead. 

Thanks a lot! And looking forward to connecting with you all :) 

William