Am I Being Too Pessimistic?

Am I Being Too Pessimistic?

Maspeth, NY · Member since 2016 · 75 posts · 62 votes

So I'm pretty much ready to start my house hunting process but it seems like my pessimism is overtaking everything that I think. I'm looking at Orange county NY and looking at a 2-4 unit property, where I'll live in one unit and rent the others. It seems like every deal that I look at, I either come to one of the conclusion: the property taxes are too high to pull a decent profit (Monroe); the area isn't a desired area (Port Jervis, Newburgh); or the property needs a lot of work and may have a huge hidden repair that is unknown to it due to old age. I'll be using FHA to finance and have no problem with using the 203k loan for rehab. My goal is to make the property as cheap as possible because I only plan on living in it for the one year required as I purchase another investment afterwards. I run the numbers on the deals accounting for all costs (capex, maintenance, vacancy included), and many seem like good deals.... But I always see myself coming back and questioning myself on whether it really is a good deal based on one of the subjects stated earlier. Am I being too picky or cautious, or is this feeling justified??

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Newburgh, NY · Member since 2016 · 10 posts · 17 votes
9y

@Jon B. As a 17 year resident of Newburgh, I won't argue about the violence in the city, I personally know one of the families of the most recent fatality. The "town" area is not so violent. Nonetheless, people still live here and are not moving. Habitat for Humanity is "in the city" of Newburgh - growing strong!! Discouraging investors is unfair. Everyone investor will and should analyze EVERY property they consider. At the end of the day real estate is risky ANYWHERE, people still need a place to live, and if the numbers work for us we have a decision to make. Wishing you all the best in every endevour. 

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  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    9y

    No.  You're not understanding what the "tea leaves" are telling you.

    What they are telling you is you are looking in the wrong market(s).  Just find a market that does work.

  • Maspeth, NY · Member since 2016 · 75 posts · 62 votes
    9y

    @Joe Villeneuve The thing is that I work in NYC, and have to live in the city or surrounding NY county due to my job, and Orange county is the most affordable between Nassau, Suffolk, Rockland, Putnam, and the city.

  • Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
    9y

    Try Danbury, CT -- Commuted to Whiteplains for 3yrs and the Harlem Line goes to Grand Central.

  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    9y
    Originally posted by @Jon B.:

    @Joe Villeneuve The thing is that I work in NYC, and have to live in the city or surrounding NY county due to my job, and Orange county is the most affordable between Nassau, Suffolk, Rockland, Putnam, and the city.

     This doesn't mean you have to invest there.  There are 50 States in the USA.  Investing in the wrong place, simply because you live there, is worse than not investing at all.

    You can't force it.  If the round peg doesn't fit in the square hole, and you have to shave the peg to make it fit, guess what you are shaving off...in ALL cases.

  • Goshen, NY · Member since 2014 · 9 posts · 2 votes
    9y
    I live in Orange County NY (also work in NYC and commute) and have just bought my first 2 family in Walden. I have a few friends who own property in Maybrook, Walden, Warwick, and Slate Hill. I'm a newbie myself and have limited knowledge but would say you've got a great plan to do FHA, but as you said you're limited geographically by your full-time job. I'd suggest to keep looking and be patient. Check out Walden which has a good mix of decent taxes, fair amount of properties, and good prices. I understand your fear of buying older homes common to some of these areas but if you do your homework when looking at the properties and find a reputable home inspector you can help mitigate some of those issues. Good luck and feel free to contact me if you want to talk about the area!
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    9y

    You have to set realistic expectations of what the market will give to you.  

  • Member since 2016 · 13k+ posts · 12k+ votes
    9y

    You are not mentally ready to invest yet. Reasons not to invest are usual excuses to avoid investing.

  • Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes
    9y

    Hi @Jon B., if it's a flat investment.. go elsewhere, VA/NC/KY are great... but you have to live there, so you have you have to be near NYC. Think about it from a regular person's perspective, are you really complaining about getting your housing paid for by someone else? I understand you want a high return, we all do!... but you have realize you win the game by a getting a double, and then another one, and then another one, they don't all have to be home runs! Have confidence in yourself!

  • Bridgeport, CT · Member since 2016 · 11 posts · 1 vote
    9y

    Run the numbers, post the findings of the best two or three deals and listen to the experts on BP. But eventually you will have to over come your fear. The sooner you get started the closer you will become to your end goal. You can do it, you have a whole community for support. i hope this helps.

  • Real Estate Agent · Bridgeport, CT · Member since 2014 · 38 posts · 21 votes
    9y

    Honestly, I'm kind of in love with Newburgh @Jon B..  Have you looked into purchasing from the city or the land bank?  The numbers won't steer you wrong as long as you make the money when you purchase (i.e. buy at the right price).  I took a trip recently and saw some great single family opportunities in a perfectly walkable, suburban looking neighborhood.  

    Best of luck!

  • Maspeth, NY · Member since 2016 · 75 posts · 62 votes
    9y

    @Nhrai Jordan Newburgh is one of the most dangerous towns in the country, and in infused heavily with gang activity.  I would put it right up there with inner-city Detroit and Baltimore.  Not sure who would want to live around that. 

  • Maspeth, NY · Member since 2016 · 75 posts · 62 votes
    9y

    @Jeff B. My job requires me to reside in NYC, Nassau/Suffolk, Orange, Rockland, Westchester, or Putnam counties.

    @Joe Villeneuve I want to do my first investment an FHA multi-unit which would require me to reside in the property for 1 year. Afterwards, my goal would to invest out of state.

  • Newburgh, NY · Member since 2016 · 10 posts · 17 votes
    9y

    @Jon B. I'm curious, is your statement an opinion or from statistics??

  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    9y

    @Jon B. How many properties have you invested in, or analyzed, in inner city Detroit or Baltimore?

  • Maspeth, NY · Member since 2016 · 75 posts · 62 votes
    9y

    @Tymalaya Thomas Newburgh is statistically one of the most dangerous and violent cities in America. There are only a handful of towns/cities in America where you are more likely to be a victim of a violent crime. This data is backed by the Uniform Crime Report by the FBI which is a yearly compilation of crime data based off local police departments.

  • Real Estate Agent · Bridgeport, CT · Member since 2014 · 38 posts · 21 votes
    9y

    @Jon B. funny, lots of people say similar things about Bridgeport, CT.  I suppose I just a have a higher tolerance or just a different investment criteria for my portfolio.  Plenty of people live in C-D neighborhoods and they all pay rent or a mortgage.  Good luck in your search!

  • Newburgh, NY · Member since 2016 · 10 posts · 17 votes
    9y

    @Jon B. As a 17 year resident of Newburgh, I won't argue about the violence in the city, I personally know one of the families of the most recent fatality. The "town" area is not so violent. Nonetheless, people still live here and are not moving. Habitat for Humanity is "in the city" of Newburgh - growing strong!! Discouraging investors is unfair. Everyone investor will and should analyze EVERY property they consider. At the end of the day real estate is risky ANYWHERE, people still need a place to live, and if the numbers work for us we have a decision to make. Wishing you all the best in every endevour. 

  • Real Estate Agent · Richmond, VA · Member since 2016 · 30 posts · 11 votes
    9y
    Hello I am an agent in Orange County and I can share the city of Newburgh has some big plans for revitalizing many parts of the city. Now maybe perfect timing if looking for investment property. I'm available to help if I'm need of an agent.
  • Maspeth, NY · Member since 2016 · 75 posts · 62 votes
    9y

    @Nhrai Jordan In 2015, Newburgh had 1 violent crime per 68 people; Bridgeport had 1 violent crime per 148 people. I'm sure there are many B-C areas in Newburgh, but I'm also sure there are many D-F neighborhoods as well which will draw people away.  

    @Tymalaya Thomas I know the town part is very much different from the city part; as a long-time resident can you share what parts are the town part?

  • Newburgh, NY · Member since 2016 · 10 posts · 17 votes
    9y

    @Jon B. For specifics, I would have to refer you to a map of Orange County which would clearly outline the area. Also when driving, there are green and white signs that mark the end of the city line that say "Town of Newburgh". Hope this helps.

  • Maspeth, NY · Member since 2016 · 75 posts · 62 votes
    9y

    @Tymalaya Thomas I went to Google Maps and searched for "Town of Newburgh and it gave me a outline of what seems like the town part pretty clearly. 

  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    9y

    How many square miles are marked on your map @Jon B. ? I ask because I was wondering if I accessed a 3/1 1000 ranch home near the river, and compared it to a 3/1 1000 ranch home near the Airport, and also a 3/1 1000 ranch in the far NW corner...would they all be worth the same price?  Would they all have the same rent?

  • Maspeth, NY · Member since 2016 · 75 posts · 62 votes
    9y

    @Joe Villeneuve There is a difference between those areas, and the area by the river below the outline area is Newburgh city which is mostly a D area.

  • Joe VilleneuvePro Member
    Plymouth, MI · Member since 2013 · 13k+ posts · 19k+ votes
    9y
    Originally posted by @Jon B.:

    @Joe Villeneuve There is a difference between those areas, and the area by the river below the outline area is Newburgh city which is mostly a D area.

     I wonder if the same thing could be said about the different sections in both Detroit and Baltimore?

  • Investor · Detroit, MI · Member since 2014 · 360 posts · 354 votes
    9y

    Newburgh is dangerous I spent 3 weeks in Poughkeepsie,NY and would fly into and drive around Newburgh...it seemed fine. shows looks can be deceiving.

    Several people I worked with said they used to or had a spouse that commuted to the NYC.

    I worked a lot in Danbury, CT that seemes like a solid area. Nice mall, I know the locals said it was overpriced, many said its better to just move closer to NYC.

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