We can't help but love the cap rates you can find if you just poke a few blocks further east from where we usually look. 1226 Bedford Avenue is a turnkey 4-Family listed at $949K. This is pretty compelling price for something so close to the train that's grossing $80K/year in rental income and could conceivably be purchased with 5% down. Much like our last pick in Crown Heights, this Bed-Stuy play is just over from Clinton Hill but offers lots more value than you'd normally find in Clinton Hill proper. As gentrification continues to sweep east, this sort of move could look better and better.
It's worth noting that this interior, while turnkey, doesn't have the "original details" that people get so weak in the knees over, and often run to Bed-Stuy looking for value in that. The pretty generic, rental-grade interior isn't going to make anybody's knees weak, but the chance to own for the kind of downpayment many people spend in one year's worth of rent is compelling.
We have to caution here that we still don't have the skills necessary to truly seperate the wheat from the chaff in Bed-Stuy, as we're still making our first sneak peaks into the neighborhood. And, that sales prices have been known to get ahead of themselves in borderline areas, evidenced by the most recent purchase of this property for $975K in May 2009 after a Lis Pendens for $432K in 2008.
Pro's: close to the train, turnkey, rental income potential, 4,300 sqft
Con's: generic interior, no original details, rents haven't fully arrived yet, we might pick around Prospect Heights in these prices first for more park proximity
Ideally: we still think there's a few better buys left to be uncovered in Fort Greene and Clinton Hill, but the push towards Bed-Stuy is inevitable
Turnkey?! What in the world is that? I am a landlord and there isn't one month where I don't have to fix something. Owning a building is hands on hard work! I wish all I had to do is sit on my sofa scratching my butt while collecting rent checks.
ReplyDeleteTurnkey simply means you can live in it as-is. Obviously, on-going maintenance is a part of owning anything. Nobody said anything about sitting on the sofa collecting rent checks, but you must agree there's a big difference between a home people can move into today and one that needs months of work and a huge budget to fix up.
ReplyDeleteDropped price $100K in October... getting MUCH warmer...
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