All Forum Posts by: Yvonne Shui

@Yvonne Shui

Hi Yvonne,

I own 3 Buildings in Bed-Stuy, All 3 Family, 2 are Brownstones and 1 is a brick building.

The one closest to where you are buying is probably going to be on Hancock and Thompkins or on Greene Ave and Throop.

I think the most important thing about buying in Bed-Stuy right now is to make sure you get a professional tenant with high income and high savings to weather the Coronavirus Storm.

Last Month, one of my tenants at the Greene Ave/Throop location gave me notice as she closed her Williamsburg restaurant and needed to leave, moving in with her bf.

Her apt is a Garden Apt, Large 1 Bedroom with a Laundry in Unit.

I decided to get a quick renter that has been qualified and I advertised the apt for only $2,500 per month. BTW, I know a lot of people on here would not think that $2,500 per month would get a quick renter, but this is Brooklyn.

Within 6 days of ads, I got 40 inquires, 5 applicants and I took the best one which was a YOUNG couple that made $200k combined income plus had $200k in savings or an IRA.

I don't really have experience with a higher priced apt like yours around the $5k range, but maybe my rental is annedotal.

It seems to me that there are a lot of people who are considering low density buildings like ours to be highly desireable because of the Pandemic.

It makes sense because you can pretty much isolate yourself and you don't have to go into an elevator, potentially breathing in someone's germs who may have just sneezed or coughed while you are within 6 feet of each other.

For the Garden Apt, it's exceptional to have at this time of year as well. If your apt is like the one I just rented, it will have a separate entrance where no other tenants come in or out.

To me, I'm very lucky to have such an extraordinary portfolio of properties that are attractive to tenants that now want to be in low density buildings.

I suspect that this trend will continue and I certainly don't think that this will be our last Pandemic.

Also, when I look at price point, while the current comps are important for the Mortgage you are looking to get, I generally care about what the price will be in 10 years from now.

Who cares if you buy a property for $1.6 Million if it's worth $3 Million in the next 10 years?!

Looking back at hindsight, I bought a small 2 Family building 1 block away from Prospect Park (near the lakeside) in the year 2000 for $140k.

Today, that property will sell for over $1.1 Million.

In my mind, once I get an idea how much the property is worth in the future, does it matter if I bought the $140k property at a $10k discount when I already make close to $1 Million in apprecation?!

Now, there are a few caveats, of course.

The future is risky, but mitigating your risk by using your intelligent is important.

There are things going on that may affect your property. For instance, if the Mayor continues to release prisoners who then congregate in areas of the City including Bed-Stuy, this could cause crime to spike. That will then lead to lower appreciation if your area does not have enough development or if there are too many projects and protected class buildings.

Safer Streets in Bed-Stuy that are away from low income buildings and projects might be able to capture the future appreciation or at least get higher income tenants.

There are a lot of things to think about when you buy. BUT, if you are not thinking of the future, you won't bother looking into your neighboring properties to know if they will affect future apprecation.

Anyway, something to think about.

@Yvonne Shui. sounds good.   Just to a couple more points here.   

#1. Its common for sellers agent in this market to pressure buyers by saying there is another cash buyer on the horizon.   I often take it and tell my clients  to take with a grain of salt.   Less than 10% of the on the market  townhouse transactions in Bedstuy actually sell all cash.   Most are financed.   Would still recommend making the offer you're comfortable with if you love the house and fundamentally its a good deal.   

#2 Your liability on Nostrand Ave will also be noise.  Very busy Avenue especially during rush hour.   You'll miss a bit of curb appeal since the blocks kind of shift between strictly residential, strictly mixed use and then blocks like the one you mentioned that is a mix of both.    With that said the price of property there is often significantly lower because of this.  Would just also underwrite you're rental projections lower because of this.    

   

Hi,

I'm in prospect heights.  Very familiar with the area as much as most people want to believe gentrification = safer, it still has its high crime due to the extreme ends of diversity.  Depending on the size of the apt: $4800 I would be expecting your competition are the condos with amenities. Not even a parking spot.

msg me if you want to discuss in details.   

Hey @Yvonne Shui congrats on your decision to move to Bedstuy!     Some quick thoughts.   

#1. I love Bedstuy and have been working in the neighborhood for years.   It sounds like you'll be close to Bedford which has had an amazing transformation of great commercial openings over the last few years.  I've always thought the area between Bedford Ave and Marcy Av had a great opportunity for long term appreciation.   
#2. Lafayette Ave is on a bus line.   Although this can be a positive I would underwrite rental income a little lower depending on the size of the unit.  Once you start getting above $4000. issues like noise become a bigger concern to potential tenants.  For example  A lot of our landlords plan to list  apartments 5-10% below current market value when vacancies come up because of the economic situation.  
#3.   Would make sure all work on the house is done to code.  Would ask your agent if the sellers architect used D-14 privileges to self certify construction.  Most developers do but would be mindful of who the architect is who the developer is and who what kind of track record they have.  
#4   Width of the building is a huge indicator of resale value in Bedstuy.   For example the difference between a 16 foot wide house and 20 foot wide house is significant.  
#5.  Also if you're a  first time homebuyer there are some great loan programs in Bedstuy depending on down payment.   Eagle Community Loan at first republic is a gamechanger for the low rate.   
Many more tips but don't want to overwhelm with too many ideas at once.  

Good luck on your journey!

Have you looked at the comps for similar properties on the road/neighborhood? This is something worth asking the agent who will be representing you (unless you have a license and are representing yourself), it lets you know the average vacancy for that price point and kinds of people applying. Get all the info you can out of agents familiar with that area. 

You shouldn't have problems screening tenants who are professionals and want the short commute into Manhattan. You might have to make some minor changes to catch the eye of people at that price point, some want updated counters , fixtures etc because you do have newer builds with similar rent. Many would pay $4k a month for a shoebox that feels brand new vs a bigger space that is outdated or not too clean. 

Keep in mind a RE bubble that was always going to burst that has been sped up by COVID, but higher price points and a trendy area should give you a high chance of quality candidates.

North Bed Stuy is a safe walk, but in newly gentrified areas you always have 1 good road next to 1 bad one and a lot of characters. Make sure to get a thorough inspection and walk through of the property, Brooklyn is a place where you can get a lot of crap for $1.6m and someone will take it.

As far as safety , bodies are piling up in NY right now and there's anger towards China creating new virus strains with wild animal markets for food and medicine (and I realize the far east encompasses a lot more than China, but angry broke people don't care)... so I would monitor the situation.