How Do You Buy a Two to Four Family in Bay Ridge?

When you buy a two to four family in Bay Ridge, you are buying a home and a small business on one deed. The bank will count about 75 percent of the rent, not all of it. The tenants and their leases come with the building. And a vacant apartment is only better if you have a plan for it. Here is how I walk a buyer through it.

Two family house at 362 Senator Street in Bay Ridge, Brooklyn — 362 Senator Street. I represented the buyers of this two family in 2025. Everything on this page is what we went through before they made the offer.

How does the bank count the rent?

Not the way you do. You see two apartments paying rent and you add it to your paycheck. The lender sees two apartments that might sit empty for a month or need a new boiler. So Fannie Mae, Freddie Mac and FHA all take a haircut on the gross rent, and the standard cut is 25 percent. You get credit for 75. On a three or four family, FHA goes one step further: the building’s own rent, after that haircut, has to cover the full mortgage payment on its own. If it does not, the loan does not work, no matter how strong your income is.

Where the rent number comes from matters too. A signed lease is the cleanest. On a vacant unit the appraiser writes a market rent, and some lenders want to see the seller actually collected something close to it. Get your lender to run these numbers before we write an offer, not after.

What the bank sees on a two family

An example to show the math. These are not Bay Ridge rents and not any specific building. Your lender runs the real numbers.

Apartment 1, lease in place	$2,800 a month
Apartment 2, lease in place	$2,600 a month
What you see: gross rent	$5,400
Lender’s vacancy and expense allowance, 25 percent	−$1,350
What the bank counts toward your income	$4,050

Gross rent

$5,400

What the lender counts

$4,050

If you plan to live in one unit, only the other unit’s rent counts. That is the number to build your budget on.

What happens to the tenants who already live there?

They stay, and you become their landlord the day you close. Every lease the seller signed transfers to you on the same terms, and so do the security deposits. You do not get to renegotiate because the deed changed hands. Before contract, I want your attorney holding a copy of every lease, a rent roll showing what each apartment actually pays, and a letter confirming where the deposits are sitting. I also want you inside every occupied apartment, not just the empty one. You are buying the condition of the whole building.

A tenant with a written lease stays until it ends. A month to month tenant can be given notice if you want the apartment for yourself or want to bring it to market rent, and New York sets the notice by how long they have lived there.

days notice

Tenant has lived there less than one year.

days notice

Tenant has lived there one to two years.

days notice

Tenant has lived there more than two years.

Do I want the apartment vacant or rented?

Buyers ask me this on almost every showing, and the honest answer is that it depends on what you are buying the building to do. Neither one is the better deal on its own.

Vacant apartment

What you get

Set today’s rent, or move in yourself. Several low down payment loans require you to live in the building.
Renovate before anyone moves in.

What it costs you

No income until it is rented.
The lender credits an appraiser’s estimate, not a signed lease, and is often more careful with that number.

Tenant in place

What you get

Rent from the first of the month.
A lease the bank can underwrite without guessing.

What it costs you

You inherit the seller’s rent, which is sometimes below market.
You inherit the tenant’s rights. You cannot raise the rent or take the apartment back until the lease allows it.

Living in the building with a paying tenant downstairs is one plan. Holding it as a straight rental is another. Tell me which one you are buying and I will tell you which apartment I want to see empty.

Are these buildings rent stabilized?

Most of them are not. The City describes rent stabilized apartments as most often found in buildings of six or more units built before 1974, and a Bay Ridge two, three or four family is outside that. Rent here is set by the market and by the lease in the drawer. But I do not let a buyer assume it. A small building that once took a tax benefit like a J-51 can carry stabilized units, and the only way to know is a DHCR rent history search. Your attorney orders it. It is part of the due diligence, not an extra.

What do I check before I make an offer?

The same things I would check on any house, plus the income. Here is the list I hand buyers.

Before the offer

Every lease, every amendment, and the rent roll. What each apartment pays and when each lease ends.
Where the security deposits are held. A letter from the bank, not the seller’s word.
Two years of expenses. Fuel, water and sewer, insurance, taxes. If the seller has them, I want them.
A DHCR rent history search. To rule stabilization in or out.
The certificate of occupancy against what is actually there. A finished basement apartment or a converted layout that was never legalized is a common find in Bay Ridge. It can change your financing and whether you can legally collect rent on that unit. Before contract, it is a negotiating point. After closing, it is your problem.
Inspection and title. Same as a single family. The income does not excuse you from the roof.

A two to four family is priced the way a house is, against what similar buildings actually sold for. I laid that out in how a Bay Ridge home is priced. If you are weighing a single family instead, none of the tenant questions above apply, and what it costs to sell a Bay Ridge house shows you the other side of that deal. The seller’s side of a two to four family, the leases, the rent roll and the unit delivered vacant, is on how a house or two to four family is sold here. Either way, having me on your side of the table costs you nothing, which I explain on the buyer representation page. Call or text the office at 718-333-5233. Bring me the address and I will walk the numbers with you before you fall in love with the kitchen.

The Soldano Realty Buyer’s Guide

The whole process from pre approval to closing day, including how lenders look at income property. Read it before your first showing and you will know what a two to four family will actually qualify for.

Download the Buyer’s Guide