Newbies looking to invest in Buffalo, NY

22 Replies

Hi everyone! My fiancée and I are fresh into the game of real estate, so we are excited to learn from the wonderful BiggerPockets community.

While we reside in northern Virginia, we are looking to invest in Western New York as my fiancée has close ties there. That said, we’d love to connect with those of you who are active in that market and hear of some of your successes/failures.

Looking forward to connecting with you!

Kaja and Robert

Kaja, nice to meet you. I'm a local investor and agent. Buffalo is a great place to invest even for out of staters. I'm happy connect with you and answer any questions you may have or even point you to pros for anything you need.

@Kaja Baum , Hi I'm from WNY. I recently retired from the military, and I am moving back to WNY. My goal is to renovate my house there and refinance it with a VA loan. Then pull money out of the refinance to buy a commercial property I'm looking at now.

@Kaja Baum and Robert -- welcome! Buffalo is a great place that has managed to stay off the national radar for quite a while. I keep hearing that we are getting an influx of people that left NYC during the pandemic, but have yet to witness it myself. I've been investing and rehabbing locally for about 4 years now. There is a lot to understand about the local neighborhoods and some really great opportunities if you buy right -- but that goes for anywhere. There is a monthly BP Meet-Up; I believe the 2nd Wednesday of each month. I've missed the last few but prior to that, made some great connections (including Khaled above) and it's definitely helped us grow. 

Happy to connect if you'd like, and we also have a local BP facebook group. I think a simple search will find it. Best wishes!

@Kaja Baum - Fredericksburg is considered NoVa now?!!! My....things have changed.

Interestingly, when I first got interested in REI, I considered Buffalo: numbers were great. And homes were sold on eBay. Duplexes for $30k that needed $10k of work; lots of triplexes - all in was rarely over $50k. I ended up not moving forward on any because of concerns of age, pipes in winter, etc. This is before so much info was available online and finding contractors/property managers was much more difficult. Rarely do I see Buffalo come up in BP, perhaps that's a goldmine waiting for you!

@Kaja Baum The most risk is in large renovation projects and higher risk areas.  The returns on both of those are usually superior to what you can find that is readily available on the open market in B class areas but, so is the risk.

Generally speaking when we get someone that wants to take on a large renovation project or wants to add a high risk property to their portfolio we advise them to get one lower risk property under their belt first.  That way you can meet the entire team and get used to all of the ins and outs of out of state investing.

Some other things that increase risk are buying in all cash, buying a multi-family with 2-4 units with tenants in place (due to Covid), and buying an asset that has risk.  Like something with all older mechanicals like galvanized lines, federal pacific circuit breakers, two or more layers on a roof, an old boiler system etc..

The more of these issues you add up the more risk you take on.  If your first project you inherit 2 non-paying tenants, a boiler system that fails 3 days after you buy it, that is wrapped in asbestos, and your plumbing starts springing leaks.. you can be in a tough spot.

That is also why setting up your team is so imperative. I would also advise using a lender and to make sure you don't skip the home inspection. By the time you get to closing you should have several independent professionals signing off on your purchase, including, your agent, your home inspector, your lawyer, your lender, your insurance broker and yourself. There are certainly no guarantees but, having that many professionals that are all independent of each other is the best course of action. Going this route can have less lucrative returns but, if you are investing over a 20 year time period steady and safe returns are better than a home run that has a lot of downside if something goes wrong.

There  is also a lot you need to do on your purchase to make sure you are properly vetting tenants and tenant payments.  You can inherit a bad tenant.  Technically speaking a selling broker is supposed to disclose any tenants in arrears but, we have gotten several new accounts on the property management side that bought property from their aunt sally who is a Realtor but, not necessarily an investment realtor and she missed asking for certain components that would have brought problem tenants to light. 

With eviction restrictions in place you really need to be careful.  

@Tchaka Owen We’re still not quite NoVa but that seems to be where all the fuss is. Lol. And even in Fredericksburg, the numbers are not friendly.

I was wondering what the catch might be with Buffalo, since it wasn’t mentioned much in my research. But having people we can trust and lean on there makes the idea of long distance investing a good deal less nerve wracking!

@Tchaka Owen I know the houses you are talking about and they are selling for 100K+ easy.  Amazingly the returns are still really good on the same house at 100K.  Shoulda...coulda... woulda... I keep kicking myself for not doing things in the past with the information I obtained in the future LOL. 

Hello everyone!!!

This is actually my first time posting in Bigger Pockets. I'm fairly new to real estate investing but I've dedicated quite a bit of time to research. I'm looking to combine my knowledge from previous employment where I coordinated grant based rental assistance programs which covered 100% of the rent for those clients, with my interest in real estate investing. I can't think of anything better than generating cashflow while helping others.

I'm looking to invest mostly in Western NY specifically because that's where have the most contacts, and it's where I grew up.

I look forward hearing all of your stories and would love to connect with you brainstorm new ideas.

@Kaja Baum

I grew up in WNY (Olean) and am in a position to potentially take on properties as part of an inheritance with buyout to siblings. I've always resisted the idea of managing properties (12 unit Victorian apt. Duplex and SFH) from afar (Oakland CA). Trusting a property manager to give the attention that my Father has to these properties seems a stretch. So if you come across any reputable prop. Managers. or companies, please let me know. Thanks. And good luck!

@Matthew Irish-Jones I've gotcha. Thank you for that answer. I've read about many of those factors but having them laid out like that is extremely helpful. 

And yes, while I'd like to move a whole lot faster than 20 years in getting to financial freedom, we're not so foolhardy as to shoot for higher risk/higher returns kinds of deals without establishing the systems and experience first. Certainly is a lot to get one's head wrapped around though. 

@Amedeo M. we are in the neighborhood of 8-12% cash on cash returns on an investment that is what I consider low risk in a B class area.  Returns really depend on strategies and neighborhoods.  Like any city there is a wide range or returns and micro markets.  

Some general numbers are for a double in a B class area we can expect a price of $120K to 140K and a rent roll of $1600-$1800.  Sometimes we need to do some light renovating to get there but, those numbers are achievable in the current market.