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Hard money and fix and flip loans in Brooklyn, New York
Loans for brownstone and row house renovations, two- to four-family homes and small multifamily buildings across Brooklyn.
The Brooklyn market for investors
Brooklyn is the most populous borough, and much of its housing is brownstones, limestones and brick row houses built between the 1870s and the 1930s, along with two- to four-family homes and walk-up apartment buildings. Strong rental demand and a deep buyer market for renovated homes make it the city’s busiest renovation market.
Investors buy dated row houses and two-families to renovate and resell, convert or legalize units where the zoning and certificate of occupancy allow, and hold small multifamily as long-term rentals. Many of the most valuable blocks are landmarked, so the plan has to include Landmarks Preservation Commission review.
Neighborhoods investors ask about
- Bedford-Stuyvesant and Crown Heights: brownstones and row houses to renovate, parts of them in historic districts
- Bushwick and Ridgewood border: two- to four-family homes and walk-ups
- East Flatbush, Flatbush and Canarsie: attached and semi-detached homes at lower entry prices
- Park Slope, Fort Greene, Clinton Hill and Brooklyn Heights: higher-priced townhouses, much of them landmarked
- Bay Ridge, Sunset Park and Bensonhurst: two-families and small buildings in southern Brooklyn
Plan for these on a Brooklyn deal
- New York City’s mortgage recording tax is about 1.8% of a loan under $500,000 and 1.925% at $500,000 or more on one- to three-family homes and condos, and 2.8% on larger buildings and commercial property at $500,000 or more. Build it into your cash to close.
- On the sale, the seller customarily pays the city transfer tax (1% up to $500,000 and 1.425% above on one- to three-family homes) and the state transfer tax of 0.4%. Buyers at $1 million or more pay the mansion tax.
- Exterior work in historic districts such as Park Slope, Fort Greene and Stuyvesant Heights needs a Landmarks Preservation Commission permit as well as a Department of Buildings permit.
- Work that changes layout, structure, plumbing or the unit count needs Department of Buildings filings, usually through a registered architect or engineer, and a new certificate of occupancy for a change in units.
- Paint in buildings built before 1960 is presumed to contain lead. Local Law 31 requires an XRF test in rental units of those buildings, including rentals in one- and two-family homes.
- Buildings of six or more units built before 1974 are often rent stabilized, and Good Cause Eviction covers many other rentals unless an exemption applies, such as an owner with 10 or fewer units statewide. Ask for the rent roll and registration history before you sign.
Loans available in Brooklyn
| Program | Use it for | Top leverage |
|---|---|---|
| DSCR rental loans | Purchase or refinance of long-term rentals, two- to four-family homes, condos and small multifamily | 85% loan-to-value to buy, 80% on a cash-out refinance |
| Ground-up construction loans | Building a home, a two- or three-family or a small apartment building, lot included | 90% of cost for experienced builders, up to 70 to 75% of the finished value |
| Fix and flip loans | Purchase plus renovation of a property you intend to sell | 90% of the purchase price and 100% of the rehab, up to 70 to 75% of after-repair value |
| Portfolio and commercial loans | A group of rentals under one note, or multifamily and commercial property | 80% on a portfolio purchase; commercial priced per deal |
Brooklyn hard money loans: common questions
Yes. We finance fix and flips at up to 90% of purchase and 100% of rehab, rentals at up to 85% loan-to-value, and ground-up construction at up to 90% of cost for experienced builders.
Yes. Plan for Landmarks Preservation Commission review of exterior work, and choose a loan term long enough to cover it.
Local Law 18 bars renting out a whole home or apartment in the city for less than 30 days, so investment properties are underwritten on long-term rent.
Fix and flip loans average up to 21 days and can close in about 7 days when title and insurance are ready. Rental and DSCR loans take about 30 days, appraisal included. In New York each side is represented by an attorney, and a title company insures the title.
Looking at a property in Brooklyn?
Send the address, the price and what you plan to do with the property. We will reply with the leverage and pricing that fit your deal.