Looking for a market. NYC / Philly / New Jersey / other??

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Looking for a market. NYC / Philly / New Jersey / other??

Brian R.
New York City, NY · Member since 2014 · 20 posts · 2 votes

My name is Brian and I live in New York City. I am having trouble/analysis paralysis on finding a rental market to focus my efforts on. I grow up in Southern NJ/Philadelphia and part of me wants to invest there. NYC is too pricey for me to enter and I am not sure where I should invest.. I would appreciate thoughts. I was thinking Rochester, NY but that's hours away and I feel for my first investment it might serve me well to be closer to the investment. The trouble I am facing is after having run the numbers on investments in Rochester I can't find anything like there in NJ, Philly, or more southern parts of New York State. I would love to get some pointers on places that might be worth looking into.

Thank you! Brian

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Amy C.
Philadelphia, PA · Member since 2012 · 104 posts · 8 votes
12y

I'm a new investor, buying first property in Philly, and we live in S.Jersey...I wish we could buy in our cute S. Jersey town, but the dang property taxes prohibit the numbers from working the way I want them to. My preference is to buy in Chicago where I lived for 20 years and the housing stock kicks Philly's... but too inconvenient for a novice. Hoping Philly continues to improve, though I still think about 1/3 of it needs to be bulldozed. Best of luck!

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  • Andriy Boychuk
    Rental Property Investor · Staten Island, NY · Member since 2013 · 480 posts · 197 votes
    12y

    Hello Brian,

    I live in NYC as well (Staten Island). I bought my first real estate in Dignmans Ferry PA because I was familiar with the area and real estate in NYC is extremely expensive. However, there are deals as well.

    Rochester is too far from NYC :)

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  • Account Closed
    Investor · South Jersey, NJ · Member since 2013 · 338 posts · 22 votes
    12y

    Great luck on your grind. I'm in the region you're from in South Jersey/Philadelphia.

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  • Mark UpdegraffBusiness Member
    Real Estate Broker · Rochester, NY · Member since 2010 · 1k+ posts · 689 votes
    12y

    ROC isn't that far from NYC if you fly. Definitely too far to drive unless you've got business along the way. Boring drive too!

    If you want some representation up up up here, I love working with serious investors. Send me a PM with your email address and I can get you dialed in.

    Cheers,

    Mark

    Podcast Guest on Show #112
    Updegraff Group Realty4.746 Reviews
    WebsiteView Page
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  • Amy C.
    Philadelphia, PA · Member since 2012 · 104 posts · 8 votes
    12y

    I'm a new investor, buying first property in Philly, and we live in S.Jersey...I wish we could buy in our cute S. Jersey town, but the dang property taxes prohibit the numbers from working the way I want them to. My preference is to buy in Chicago where I lived for 20 years and the housing stock kicks Philly's... but too inconvenient for a novice. Hoping Philly continues to improve, though I still think about 1/3 of it needs to be bulldozed. Best of luck!

    1Reply
  • Ankit Duggal
    Specialist · Boca Raton, FL · Member since 2011 · 113 posts · 39 votes
    12y

    @Brian R. Welcome to BP. The first question that I would love to ask is what are the dynamics that you believe make Rochester a viable market. To dig deeper, what are the return-risk hurdles you are seeking? Purchase Price/Equity investment targets?

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  • Marci Stein
    Rental Property Investor · New York, NY · Member since 2011 · 956 posts · 510 votes
    12y

    sullivan, ulster, orange counties are all good options,

    and only 90 minutes from nyc---good luck.

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  • Brian R.
    OP
    New York City, NY · Member since 2014 · 20 posts · 2 votes
    12y

    @Ankit Duggal , What is attacking me to Rochester is that there are properties priced sub 50k which I like for two reasons, 1] cheaper purchase prices means I could invest with less of my own money while still getting a 30yr fixed loan, and 2] if everything goes wrong that could it's cheap enough where I could [with the help of family] purchase it outright and not risk foreclosure. To me there is peace of mind in this because I really want my first investment to be a low stakes as possible.

    What I also like about Rochester, is there seems to be a strong rental market. So demand plus affordable investment options makes Rochester look appealing. All of that said, I am not opposed to looking elsewhere but that is what has caught my attention so far.

    I am trying to keep returns high and risk low [I know that's what everyone wants,] but I would prefer stability and safety for my first investment as I am learning the ropes.

    Any thoughts on other markets I might consider? Also, how do you feel about investing far from where you live vs. near by? I live in Manhattan so that's not so easy for me.

    Thanks alot Ankit!

    Brian

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  • Ankit Duggal
    Specialist · Boca Raton, FL · Member since 2011 · 113 posts · 39 votes
    12y

    @Brian R. The asset you can purchase for $50k; how relatively risky are the neighborhoods?

    In terms of investing far away, you need two very good property management firms that you can rely on and a local realtor who can pay to be an asset manager on a quarterly basis. So if you can build out that team and you can monitor the market demand- supply trends fairly well then investing out of your area is not as big of an issue.

    1Reply
  • Mark UpdegraffBusiness Member
    Real Estate Broker · Rochester, NY · Member since 2010 · 1k+ posts · 689 votes
    12y

    Rochester is a great market to invest in. Like anywhere else people try to pass crap off as 'investments' but if you do your DD and have a good team it is a breeze. We're an active market too, true deals don't wait around for buyers and sell cash.

    Podcast Guest on Show #112
    Updegraff Group Realty4.746 Reviews
    WebsiteView Page
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  • Account Closed
    Renter · Rochester, NY · Member since 2013 · 26 posts · 1 vote
    12y
    Living in Rochester myself, the sub 50k homes are usually in the riskier parts of the city. East Rochester might have a few in that price range, but from what I've seen a good deal in the "rentable" areas with lower risk would be closer to 70-90k. If you go for a sub 50k I would def. Suggest hiring a property manager.... Rochester is a very hit or miss city... One street is good the next street over has 3-5 homicides a year. Good luck! I'd like to hear what others in the area think about Rochester as an investment city for out of towners.
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  • Ankit Duggal
    Specialist · Boca Raton, FL · Member since 2011 · 113 posts · 39 votes
    12y

    @Account Closed thanks for the insights.

    @Brian R. Based on Tiffany insights, you can see that $50k investments are in high risk neighborhoods. So could you find $50k investment in risky neighborhoods sure. Here are some cities in NJ that have single families under $50k:

    Trenton, Camden, Salem, Ewing, Jackson, Newark.

    I hope that helps

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  • Account Closed
    Renter · Rochester, NY · Member since 2013 · 26 posts · 1 vote
    12y

    There is also an area in Rochester called the "south wedge" which you could find a decent property for around 50k but again I recommend really figuring out the best small niches in each area of the city. Some of the areas to look for in the city would bethe Monroe Ave area, Park Ave, South Wedge, North Winton/Browncroft, Corn Hill and maybe a couple more I am missing? There are def. Some good areas in the city, just need some patience in getting a good deal in those areas!

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  • Mark UpdegraffBusiness Member
    Real Estate Broker · Rochester, NY · Member since 2010 · 1k+ posts · 689 votes
    12y

    @Account Closed There is no way you'll pick up anything in those neighborhoods for 50k. Especially the south wedge! DOM are low and prices are market. Out if the ones you mentioned Merchants is the cheapest, but you need to be careful where specifically you buy.

    Podcast Guest on Show #112
    Updegraff Group Realty4.746 Reviews
    WebsiteView Page
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  • Eric M.
    Wholesaler · Rochester, NY · Member since 2013 · 100 posts · 23 votes
    12y

    I talk with a lot of out-of-state property owners that invest/hold in Rochester. I'll tell you right now that the biggest thing I see is investors who bought between 05-08 who want to sell - in the "risky" areas - but owe double what it's worth. An example is an owner who lives in CA and bought a single for $54K in '06. She still owes $45K on her mortgage. She needs to spend $6-8K to renovate to obtain a C of O. That doesn't include the $6-8K she'll need in 5 years when her roof goes. I'm closing on a single 3 blocks away in better shape albeit 1 less bedroom for $14K.

    My point is that just because you can find cheap properties in the city relative to other areas, don't assume it's going to be a good deal. The CA owner offered to pay $20K in order to sell, but even at $25K it wasn't worth it.

    1Reply
  • Mike Parks
    Flipper/Rehabber · PA · Member since 2010 · 60 posts · 8 votes
    12y

    philly is always good in the right areas

    1Reply
  • Mark UpdegraffBusiness Member
    Real Estate Broker · Rochester, NY · Member since 2010 · 1k+ posts · 689 votes
    12y

    @Eric M. You said it! Due diligence is up to the buyer. At the same time Period I spent similar amounts in areas that have doubled in value!!

    Ahh boo yah!

    Podcast Guest on Show #112
    Updegraff Group Realty4.746 Reviews
    WebsiteView Page
    1Reply
  • Lior Solomon
    Investor · Demarest, NJ · Member since 2013 · 78 posts · 29 votes
    12y

    Hi @Brian R.

    I've been trying to figure the same question for the past couple of months

    I live in Bergen county NJ and my mission statement when I've started looking was kind of yours, and I was looking for 8% cap rate as a target.

    Here's my 2 cents

    1. There is no such cap rate in NJ unless you go to risky areas such as Camden, Trenton etc. the reasonable cap rate you should expect in decent areas are 6%

    2. I would look into Essex county (Bloomfield, Oranges, Linden etc) and Bergen county(Ridgefield park, Lodi, Garfield etc)

    If you are looking for someone to help you finding the relevant prospects in Essex talk to @Darren Sager , he is great.

    I hope that helps,

    Lior

    1Reply
  • Luke M.Pro Member
    Rental Property Investor · Brooklyn, NY · Member since 2011 · 76 posts · 17 votes
    12y

    @Ankit Duggal Hey, I know this is an old post, but could you expound on your strategy for having two property management firms, and utilizing a local realtor as an asset manager? All of my properties are out of state (I live in NYC), and my system has been working, but I want to fully tuck into a market, and have it nailed down. Loved your podcast episode, by the way!

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