House Hacking in NYC while working in Investment Banking

I am 28 years old and currently a senior associate at a BB IB working 60-65 hours a week on average. With this work from home situation and our current return plans (anticipate to be able to come to the office whenever but not required, ideally going to go Mon - Wed), I was thinking about investing in property in Brooklyn. I have seen cases of people generating cashflow on 3/4 unit multifamily properties and was wondering if anyone has done it while also working as many hours as most of the people on this forum do. Just want to see if it is feasible/good idea or does being a landlord detract from career progression.

Any and all thoughts welcome.

Comments (22)

Funniest
Feb 24, 2021 - 2:59am
6969, what's your opinion? Comment below:

Not sure if a senior associate will have time to evict a literal washed up delinquent Jamaican reggae band member for not paying rent in a Brooklyn apartment which has been trashed and now reeks of weed and piss and cats and people staying there illegally.. definitely not based on a true story from a family friend 

Choose your tenants wisely, literally just buy and hold Bitcoin for a better return

Feb 24, 2021 - 11:43am
6969, what's your opinion? Comment below:

that's discrimination mon

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Mar 4, 2021 - 7:58pm
Pierogi Equities, what's your opinion? Comment below:

Could get a property manager for this very reason to deal with it, but goodbye to your NOI margins.

Quant (ˈkwänt) n: An expert, someone who knows more and more about less and less until they know everything about nothing.

Feb 24, 2021 - 10:29am
Ozymandia, what's your opinion? Comment below:

Tough thing to pull off in NYC.

When a boiler breaks at 3pm on a Thursday, are you prepared to field 3 or 4 calls from angry tenants in the middle of your workday?  Will you have the flexibility to spend time getting folks to come out and fix that leak?  "Being a landlord" shouldn't impact your career at all, but doing all the things you need to do to keep a NYC property up to code and functioning smoothly is a full time job - which is why tens of thousands of people in NYC have entire careers dedicated to it.  And if you want to pay someone else to do it for you, you can wave goodbye to most of your cash flow.

Feb 25, 2021 - 1:55am
HIV Neutral, what's your opinion? Comment below:
[Comment removed by mod team]
Feb 25, 2021 - 9:29am
Ozymandia, what's your opinion? Comment below:

HIV Neutral

I don't see this as being a huge deterrent

In what sense?  If you mean you have the work flexibility and reasonable hours to deal with it, great.  If you think these are ancillary issues, I would suggest staying out of the owner/operator real estate space.

Feb 24, 2021 - 12:20pm
Goya Beans, what's your opinion? Comment below:

It's cashflow for sure but don't be under the illusion you aren't working for it. I've heard some absolutely horrendous stories about tenants and having to deal with just all the random shit that can come up when renting out a house/apartment. I'd shoot for something more passive especially if you're working in IB where you already have a boiler breaking once a week. The only way to do it imo is to own enough properties to have them managed by a rental management company but idk how much a cut they take and if it's even worth it after that.

To live is to suffer, to survive is to find some meaning in the suffering.

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Feb 25, 2021 - 3:48am
6969, what's your opinion? Comment below:

I think as an associate in banking you're in a rough spot - you really don't have enough time to do rental management yourself but probably don't have enough capital to buy enough property where hiring a rental management company would make sense. So because the property management company would eat signfiicantly into your return, I say pick out some different assets that will generate cash flow, don't do real estate yet.

If you have a friend/brother/cousin/uncle who has free time and is cut out for property management, see if you can get them to do it for a fair price. I've seen this before - one guy is a rainmaker and buys property, his uncle has been less successful but is the perfect guy to manage property and earn additional income. Win-win scenario if you can keep it in the family imo. 

Mar 4, 2021 - 8:01pm
Pierogi Equities, what's your opinion? Comment below:

This is definitely the way to go and tbh probably how a lot of family real estate firms start.

Quant (ˈkwänt) n: An expert, someone who knows more and more about less and less until they know everything about nothing.

Mar 4, 2021 - 8:00pm
Pierogi Equities, what's your opinion? Comment below:

Goya Beans

managed by a rental management company but idk how much a cut they take

where I live it's around 10% of gross rent, but probably could work out a better deal with you had multiple units, but that's a mo' money, mo' problems kind of thing

Quant (ˈkwänt) n: An expert, someone who knows more and more about less and less until they know everything about nothing.

  • 1
Mar 4, 2021 - 8:05pm
Pierogi Equities, what's your opinion? Comment below:

High property taxes, HOA fees, insurance, etc. and 15-yr mortgages will cut into your money too, but you're right in that you'll have equity, but worse levered returns.

Quant (ˈkwänt) n: An expert, someone who knows more and more about less and less until they know everything about nothing.

Most Helpful
May 8, 2022 - 4:12pm
hutcht11, what's your opinion? Comment below:

Ok- so I know this is a bit late , but here goes. 
 

My experience - I own a 4 family in Brooklyn NY and have a full time job in tech. 
 

The Time 

Time is your most valuable resource. If you're doing proper tenant screening (background checks , calling references, etc) and not investing in the trap, you'll significantly mitigate your risk of dealing with evictions and bad tenants. The issue of maintenance could be dealt with significantly by doing a renovation at the beginning , or just dealing with issues as they happen. 
 

I don't have a property manager but as I get more units I will probably have to. But I would say between taking out the trash, sweeping leaves, and getting a call maybe once every 2 months, I spend about 7 hrs a month on the property. This will definitely  vary. 

The Cashflow 

This is probably the one that most people get wrong in NY. Cash flow is tough and will only get tougher with rising rates. 

I barely cashflow on a 4 unit, but I also live in the nicest unit in the building and didn't get roommates. If I Airbnb'd out the rooms in my apartment ( which is legal) or got a roommate, I could probably collect another 1500-2000 a month and would certainly cash flow. 

But generally speaking if you go 4 unit, you can probably cover your mortgage

Leverage 

I want to be clear that the main advantage to house hacking in ny is that you can take down a huge building (up to roughly $1,900,000) with 3% down. You understand the deep value in that. Controlling an almost 2 million dollar building that hedges against inflation … you can see the benefits. So in some way, you're lowering your cost of living, gaining equity, and in time gaining cash flow. Is that worth on average 2 hrs a week, IMO, yes, but only you can answer that. 
 

The Long Game 

You're playing the long game with real estate in nyc. But imagine this. You house hack every year for 10 years and at the end own 20-40 units worth 20 million at the end of 10 years with a few million of equity. When your bank decided you're not  suiting their business needs, you're smiling to collect your severance and take care of your properties.

there's downsides for sure. It's time, you can have a bad tenant, winter shoveling can be tough, and heaters will go out. But if you're making 300-500k, it's a pretty decent low - medium risk investment in addition to your stocks and crypto. I also think there's value in just the process of learning to deal with real estate and a nice change from what you're dealing with on a daily basis- maybe you'll love it and decide it's better for you than banking ! Or that you want to be a real estate banker!
 

just one dudes opinion. This is just stretching the surface. DM me if you have questions or want advice ! 

Sep 13, 2022 - 6:22pm
Woverne, what's your opinion? Comment below:

I have not seen such cases in my life, but I have met with the hacking of "smart home" systems, bank cards, and games. In the case of the first example, this is an illegal act, but as for hacking games, this is not punished. That's why it's a good way to increase your hacking skills or take some character victories for yourself, for those who have long wanted to learn this, then https://guidedhacking.com may come in handy. Recently, I want to master this area of ​​work, which, in my opinion, can be further applied to something more significant. What do you say?

Sep 19, 2022 - 4:27am
gRhgOjpFj, what's your opinion? Comment below:

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Sep 19, 2022 - 4:27am
gRhgOjpFj, what's your opinion? Comment below:

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