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IYT Market Update

Value Investment: Boerum Hill 3-Family

This week's listing spotlight is a 3-Family brick townhouse in one of Brooklyn's most popular neighborhoods. Conveniently located, with easy train access, and a host of amenities including some of Brooklyn's best boutique shopping, restaurants, and bars - Boerum Hill, Brooklyn Heights and Downtown Brooklyn's brownstone filled southern neighbor, is one of the Borough's less recognized high performers in terms of PPSF value add over the past 5 years. Since 2012, the average resale price per square foot of 2-bedroom condos has increased from $784 to $1,162, a more than 48% increase.

Multi-family home prices have also increased dramatically. In the third quarter of 2017, the average active price per square foot was $971, which translates to an average listing price of $2,797,500. Looking at rent rates in the area, one bedrooms rent for between $2500-$3200 per month, two bedrooms for between $2800-$4000, depending on finishes

This week's gem can be had for well under $2,500,000, at a price less than $870/sqft. This is unique because there are only four listings under $3M in this area. The other listings are priced at $996, $1,005, and $1,348 per square foot -- and none are currently useable as a 3-family.

As a 3-family, an owner/investor could conservatively expect net rental income of well over $100,000 per year, given the low taxes and high rental demand in the area.

I like this property even more for the end user who wants to live in 1-2 units combined and rent out the remaining units. For that end user, even with only 20% down, they could live in an enormous brownstone duplex with basement and yard for under $4,500/month in net carrying costs.

If this piques your interest, or you'd like to find out about other investment opportunities, please don't hesitate to get in touch.


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