Though they might look younger than their 27 years, real estate developers and twin brothers Austin and Jake Deraaff aren’t babes in the woods.
Having completed over 400 deals in the seven years they’ve been in business, and now the owners of 600 units in apartment buildings and hotels throughout the Hudson Valley, the Deraaffs are a whirlwind in the real estate game. They have their sights on a new territory to conquer – the city of Peekskill.
“What’s interesting to us is that Peekskill’s the last opportunity in Westchester,” Austin said. “Go 20 minutes down to Ossining and then another 20 minutes to Tarrytown, and the real estate prices are three or four times the value pricing of Peekskill.”
His brother Jake echoes why Peekskill is where they’re betting their money now. “We like everything along Metro North and that’s where we buy,” Jake said. “We believe everything is going up north — all the money, all the people. Eventually all the prices go up in Westchester.
“I was renting a two-bedroom in Tarrytown for $2,000 and that same place is going for $4,000 now. Anything with access on the Hudson Line is a sure thing.”
They started out at the age of 20 buying and flipping houses after paying $299 for a course on how to buy real estate with no money down. They posted signs all around Peekskill saying “AJ Buys Houses” and wound up doing their first flip with a Westchester Avenue house where they earned a finder’s fee from their investor, the father of a friend who financed the flip. They also flipped two other houses in Peekskill early on at 114 Wells Avenue and 604 Nelson Avenue.
Two new apartment buildings on the drawing board
The brothers launched three deals in Peekskill recently. One of them, the purchase of an existing apartment building at 939-943 Diven St., has nine units already rented. They’re updating all the apartments that have old kitchens, old floors, old cabinets and old bathrooms and targeting a rental price of $2,500 for two-bedroom units.
Their other two projects will be market-rate apartment buildings of new construction and all the challenges that come with clearing the land, hiring contractors, winning permits and overcoming all the unforeseen obstacles and delays when building from the ground up.
Late last year, working with an investor from Brooklyn, they purchased the former Stop N Go Deli and empty lot at 716-730 South St., down the block from the post office, for $1.45 million from Marcus Perez.
“We think the South Street property is the best piece of land in Peekskill. We’ve been trying to buy it for three years,” Jake said. They hope to have approvals by the end of the year.
Plans now call for approximately 150 market-rate units on the site with 10% affordable units as required by city law. “We want to be market rate and we also call it affordable luxury,” Austin said. “We will make them beautiful, high-end but we’re not going to charge at the very high end as some others do. We’re going to make it reasonable so we’ll be filled but also high end and nice.
“We’ll offer the option so locals can rent but we’ll also attract newcomers. Other developers sometimes do it wrong – they try to get outsiders and push everybody out, and the city is not going to like that. We want the current residents of Peekskill able to rent from us too,” he said.
The third Peekskill project is a plan to build 40 apartments at the bottom of Main Street, across from the Copperhead Club bar. Along with investors, they purchased the building at 400-410 Main St. from the late Phil Miller for $1 million in 2022. The land extends from the road all the way up to Route 9 and will present some difficult engineering and design issues. The site is located just around the corner from the Jan Peek homeless shelter on North Water Street.
The brothers anticipate a lot of commuter interest in the site because of its prime location, amazing riverfront views and all the nearby resources Peekskill has to offer.
“It will definitely be a challenge, but our team is very confident with Joe Thompson as our architect and Anthony Sesi as our engineering consultant,” Jake said. “We had to redesign the building based on some of the preliminary meetings we’ve had and now they seem pretty confident.”
The start of a real estate empire?
After their first couple of money-making flips, the twins knew they were on to something. “We started slowly building the business,” Jake said. “We got a very small office and hired one salesperson and one assistant. Austin was on the front side of the business and I was on the back and together we just started to buy properties. At one point we were flipping 10 houses at a time all across the Hudson Valley.”
Their first company was Raven3 Home Buyers, handling only residential flips. Today they have several separate companies — Raven3 Residential, Raven3 Apartments, Raven3 Management, Raven3 Home Buyers and Hudson Valley Luxury Resorts.
Another business was created one day on a whim when Jake decided to take a shot.
“I was living in the rooms with my friends in a house we owned in Ossining and I listed it on AirBNB for fun,” Jake said. “A week later I got a booking for around $16,000 for two months so I said to everybody ‘we gotta go – we have a new business.'”
They now have properties in the west village in Manhattan, White Plains, Cornwall and Ossining that they rent out through AirBNB, VRBO and their own website, and just sold a fifth one in Beacon.
The business model now brings in investors to help finance deals and focuses less and less on flipping. “We still flip here and there but we like to hold because there’s no better investment than real estate,” Jake said. “It appreciates, there’s cash flow, you pay less taxes and you can amortize the loan down — all the benefits are just as clear as day.”
The drive and ambition that keeps them working 80-hour weeks comes from their desire to build wealth and a great future. It all started when they dropped out of college and headed back home, only to have their parents tell them to move and strike out on their own. Their parents today are employees of the business.
The family moved to Cortlandt Manor from Queens when the boys were 11. They graduated from Walter Panas High School and were basketball fanatics as kids. “We both started with nothing — we have big dreams and aspirations to accumulate a lot of wealth and give back a lot,” Austin said.
“We want to be able to make an impact and we also want to live a good life because we never went on vacations growing up and didn’t do a lot of extravagant things – we just feel like the world is your oyster.”
