nyc properties

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nyc properties

Arthur D.
Investor · Brooklyn, NY · Member since 2014 · 92 posts · 11 votes

I've noticed that a lot of properties talked on here are under $100K.

Avarage nyc property is $300K-$600K for a 2fam. Pretty expensive for a biggener with no $. But good credit and ik job. I can get $100K loan from bank any day. $600 is little more harder and risky in case something goes wrong.

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Darren SagerPro Member
Investor · Tampa, FL · Member since 2013 · 2k+ posts · 1k+ votes
12y

Money is made in real estate when you buy.  Most of us know that.  If you're a buy and hold investor and purchase at the right price you'll make money anywhere, NYC included.  If NYC wasn't such a good investment on a long term basis why would it be attracting so much investment from people around the world?  Its the number one city for investment in not the United States, but North America.   In my opinion its good that the barriers to entry are so high because if they weren't your investment would have a much greater chance of going sideways or down.  Look at any market as a whole after the last market crash.  The NYC metro area overall did not experience the downs that others did percentage wise and rallied back faster.   Its a much safer bet in my opinion.  I love NY!

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  • Mike James
    Valley Stream, NY · Member since 2014 · 5 posts · 6 votes
    12y

    I completely agree. I'm looking in the NYC area (mostly Queens, BK and western Nassau County) and the prices are incredibly high. They are a little lower in LI but the taxes are crazy. I have a feeling I'm going to be looking for a while before I find a good deal on a multi fam.

    1Reply
  • Arthur D.
    OP
    Investor · Brooklyn, NY · Member since 2014 · 92 posts · 11 votes
    12y

    1. I've been looking for pre-foreclosure multi fam properties.

    Still investigating how or to who should I give my offer to.

    2. Need to finish my profile

    3. Listening to podcast real estate and working full time.

    How about you?

    0Reply
  • Vermar White
    Involved In Real Estate · Brooklyn, NY · Member since 2013 · 7 posts · 4 votes
    12y

    i believe your best bet is to spend some time and a little money on R.E.I. training but with the money you do have you can purchase a few sfh turn key properties in areas and states where your roi will be higher and you not only get passive income but experience and a paper networth that will help you qualify for the bigger more expensive nyc properties.

    good luck

    1Reply
  • Mary B.
    Real Estate Investor · Lansdowne, PA · Member since 2013 · 1k+ posts · 656 votes
    12y

    @Arthur D 

    @Mike James 

    Since you have similar goals along with similar hiccups why not meet-up and perhaps do a joint venture or two. Just an idea but you are looking in the same areas and two incomes / good FICOs are better than one....

    Kudos,

    Mary B. 

    1Reply
  • Ali Boone
    Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y

    Well and the odds are that you won't profit off those $300k-600k properties either. That's even more important than loan ability. If you are investing for cash flow, you want to buy a property that isn't so expensive that the rents collected don't cover ALL of the expenses on the property, mortgage included, and then leave extra in your pocket. You won't find that in NYC unfortunately.

    1Reply
  • Darren SagerPro Member
    Investor · Tampa, FL · Member since 2013 · 2k+ posts · 1k+ votes
    12y

    Money is made in real estate when you buy.  Most of us know that.  If you're a buy and hold investor and purchase at the right price you'll make money anywhere, NYC included.  If NYC wasn't such a good investment on a long term basis why would it be attracting so much investment from people around the world?  Its the number one city for investment in not the United States, but North America.   In my opinion its good that the barriers to entry are so high because if they weren't your investment would have a much greater chance of going sideways or down.  Look at any market as a whole after the last market crash.  The NYC metro area overall did not experience the downs that others did percentage wise and rallied back faster.   Its a much safer bet in my opinion.  I love NY!

    862-208-2287Podcast Guest on Show #48
    13Reply
  • Rachelle Rayner
    Investor · Rye, NY · Member since 2014 · 80 posts · 35 votes
    12y
    Originally posted by @Darren Sager:

    Money is made in real estate when you buy.  Most of us know that.  If you're a buy and hold investor and purchase at the right price you'll make money anywhere, NYC included.  If NYC wasn't such a good investment on a long term basis why would it be attracting so much investment from people around the world?  Its the number one city for investment in not the United States, but North America.   In my opinion its good that the barriers to entry are so high because if they weren't your investment would have a much greater chance of going sideways or down.  Look at any market as a whole after the last market crash.  The NYC metro area overall did not experience the downs that others did percentage wise and rallied back faster.   Its a much safer bet in my opinion.  I love NY!

    As a newbie starting out in the NY market this is good to hear. 

    3Reply
  • Felix L.
    Summit, NJ · Member since 2014 · 32 posts · 9 votes
    12y
    Originally posted by @Darren Sager:

    "  If NYC wasn't such a good investment on a long term basis why would it be attracting so much investment from people around the world? "

    I would like to be able to invest in NYC but the Purchase Price vs. Rent ratio there doesnt seem to fit into any of the cashflow criteria that are being discussed here in this forum(ex: the 2% and the 50% rule), or am I missing something?

    1Reply
  • Felix L.
    Summit, NJ · Member since 2014 · 32 posts · 9 votes
    12y

    @Darren Sager 

    Originally posted by @Darren Sager:

    " If NYC wasn't such a good investment on a long term basis why would it be attracting so much investment from people around the world? "

    I would like to be able to invest in NYC but the Purchase Price vs. Rent ratio there doesnt seem to fit into any of the cashflow criteria that are being discussed here in this forum(ex: the 2% and the 50% rule), or am I missing something?

    (Sorry for the repost, still learning how to tag people.)

    1Reply
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y
    Originally posted by @Arthur D.:

    I've noticed that a lot of properties talked on here are under $100K.

    Avarage nyc property is $300K-$600K for a 2fam. Pretty expensive for a biggener with no $. But good credit and ik job. I can get $100K loan from bank any day. $600 is little more harder and risky in case something goes wrong.

    Hi Arthur,

    Upper state NY has lower end deals.

    You will need great management in place there tho.

    Its the toughest market in all of the US IMO.

    Thanks

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    1Reply
  • Matt Payne
    Involved In Real Estate · New York City, NY · Member since 2013 · 28 posts · 18 votes
    12y

    Felix,

    As Darren mentioned, NYC and in particular Manhattan are much tighter markets than the rest of the country. This means that you will have a much harder time finding deals with high cap rates and ROIs. The trade off is the low vacancy rates and price stability in the long term.

    The best way I've seen investors make money in NYC is by adding significant value to rental properties. This can be done through renovations, aggressive management (especially with stabilized and controlled leases) and by finding properties that have been under-managed (rents haven't risen with the tide on free market units).

    Depending on what scale you're working on, the deals are out there, but in a saturated market you've got to be smart about finding them.

    -Matt

    4Reply
  • Matt Payne
    Involved In Real Estate · New York City, NY · Member since 2013 · 28 posts · 18 votes
    12y

    Engelo,

    Why do you think upstate is the toughest market? Is it the quality of tenant? I hear a lot of people are making great returns in Rochester and Syracuse areas.

    -Matt

    0Reply
  • Jonathan K.
    Investor · Scotch Plains, NJ · Member since 2014 · 105 posts · 50 votes
    12y

    @Felix L.  I don't think you're missing anything. Conventional rules of thumb that often work in other areas of the country can be difficult to apply in and just outside of Manhattan. In addition to the local market appeal of Manhattan being a major employment center, a destination frequented by tourists, and severely space-constrained, international investors (the Chinese in particular) like to hold NYC real estate as a place to park their money. Kind of speaks to the stability of the U.S. dollar over time relative to currencies of less developed nations. This leads to a unique appreciation component in property values and escalating rents as well.

    2Reply
  • Felix L.
    Summit, NJ · Member since 2014 · 32 posts · 9 votes
    12y

    Hi @Jonathan K. . Are there any good areas in Jersey with better numbers that you can recomment to look at?

    Regards,

    Felix

    0Reply
  • Folami M.
    Mount Vernon, NY · Member since 2014 · 2 posts · 1 vote
    12y

    @Jonathan K. 

    Good Afternoon, a little off topic but from my layman's understanding of current economic times, parking ones capital into real property or silver and gold is a means to buffer against the DECLINE of the U.S. dollar, not its strength, and its eventual removal as the world's reserve currency. The Chinese themselves now have currency deals in place to circumvent the use of the dollar in international transactions. 

     As a new investor living in the Greater NY Metro area, I would not try to cut my teeth in the NYC market.  Rochester or Buffalo, even areas in Dutchess County are worth looking at.  There are pockets of NY state undergoing revitalization.  I stay away from Mount Vernon:  3.58% property tax and no cap, Westchester: high taxes and low rate of return,  NYC outer boroughs:  Evictions take to long to complete  Newburgh: Warzone

    1Reply
  • Jonathan K.
    Investor · Scotch Plains, NJ · Member since 2014 · 105 posts · 50 votes
    12y

    @Folami M.  I think in the case of the wealthy Chinese investors, they've enjoyed considerably high levels of appreciation by investing in Hong Kong, Singapore and other areas and have concerns that such valuations may not hold.

    When the equity markets get rattled and investors fear a lack of good alternatives, you see a flight to quality (safety) into things like gold and U.S. Treasuries. My comment for which you're disputing was to highlight the fact that the U.S. dollar (despite having periods of down time) has been fortunate enough NOT to have suffered a currency crisis. Dollar denominated assets, whether rightfully or wrongfully, are viewed as being SAFE. I do agree with you and understand that investors can hedge against FX risk.

    I also agree with your final point above, in that novice investors better be really educated (and possibly alongside experienced partners) before contemplating diving into the Manhattan market.

    1Reply
  • Folami M.
    Mount Vernon, NY · Member since 2014 · 2 posts · 1 vote
    12y

    @Jonathan K. 

    Thanks for the reply, I love stimulating conversation :)

    0Reply
  • Tara Piantanida-Kelly
    Investor · Caledonia, NY · Member since 2013 · 114 posts · 41 votes
    12y

    Great comments!  I agree that it can be daunting for a newbie to start investing when the prices are so high - like in NYC.  Getting your feet wet in an area with lower price points and higher cash flows percentage-wise (like in Western NY) is always a viable option - as long as you have a good "boots-on-the-ground" team in place.  The local team - including a great property manager - is CRITICAL!  

    3Reply
  • Jonathan K.
    Investor · Scotch Plains, NJ · Member since 2014 · 105 posts · 50 votes
    12y

    @Felix L. 

    Sorry for the delayed response. That's what I'm mining for right now, more so in my local area. I'm not really considering the southern part of the state and don't know that area of the market as well. I know there are some wholesalers on BP peddling low-priced properties in southern NJ towns that are rehab candidates. I'm convinced there are deals out there, but finding them takes much more work than I think it used to.

    0Reply
  • Tim C.
    Investor · Queens, NY · Member since 2014 · 16 posts · 4 votes
    12y

    Newbie here.. Hello All!  

    Great site.. so much info to digest! I am looking for cash flow R.E.. but, find the prices in NYC very high ( 2 fam , duplex) in "safer" hoods... hard to find a deal.. Plus.. I don't know a thing about fixing toilets etc.. I also work full time with 2 kids! So the time factor is limited... I wanted to know if anyone considered or went the crowdfunding route. If you had 100k ..invest it in a cashflow at say 9% cash on cash and you also have upside value when they sell.. so total IRR is at least 15%. I am seriously considering this route due to the time factor..and not having to deal with toilets, leases and collecting rent. Curious what you guys/gals think??

    Thanks! 

    1Reply
  • Deondra Carter
    New York, NY · Member since 2014 · 83 posts · 25 votes
    12y

    Hi, I'm excited you're discussing crowd-funding. I think it's a good way to invest so long as you can get a high rate of return. Finding a good return on rents is a bit of a challenge in NYC due to purchase price vs rent rates. However, the condo market is booming so it may be possible to hold for 1-2 year and then resale for a high rate of return.  

    1Reply
  • Curt H.
    Appraiser · Flushing, NY · Member since 2014 · 5 posts · 4 votes
    12y

    Just speaking about the sfr and 2-4 units in 5 boroughs here. Generally speaking, one is going to have a difficult time on finding a property with the 1% rule. If you are able to find one with a 1% rule, these properties are going to be purchased with lots of underlying issues, bringing your GRM to well over 100 after all of your costs.

    There are a lot of people buying properties with .a 5% rule or even lower. Their mindset is more for appreciation rather than cash flow, which brings up the prices. So becoming a buy and hold investor in NYC is tough because you are competing with others with a different investing mindset. 

    But, what you have going for you in NYC is the constant demand for housing. 

    1Reply
  • Account Closed
    Real Estate Investor · Los Angeles, CA · Member since 2014 · 143 posts · 29 votes
    12y

    Hi @Tim C. 

    I would choose several cash flow markets, do some research, and go with turnkey companies, so you are as passive as possible.

    Andrew

    0Reply
  • Phil M.
    Developer · Staten Island, NY · Member since 2009 · 88 posts · 9 votes
    11y
    Originally posted by @Felix L.:
    Originally posted by @Darren Sager:

    "  If NYC wasn't such a good investment on a long term basis why would it be attracting so much investment from people around the world? "

    I would like to be able to invest in NYC but the Purchase Price vs. Rent ratio there doesnt seem to fit into any of the cashflow criteria that are being discussed here in this forum(ex: the 2% and the 50% rule), or am I missing something?

     It's very difficult to follow even the 1% rule in NYC because of extremely high housing prices. The average single family home is currently selling for $554k in the five boroughs. 

    Now, say you go for an older 3br in a below average neighborhood. Say Fordam (Queens), East New York (Brooklyn), or Mariner's Harbor (Staten Island). Houses that fit that description in those areas hover around the $325-$425k range. Say you get lucky and find one that needs no improvement for $325k. Rents for 3br homes in those areas are anywhere from $1600-$1900. Say you get the median of $1750. Average property tax being roughly $4k a year or about $350/month in those areas.

    $1750x50%=$875

    A mortgage at current rates with 20% down will be about $1200/month. That means you're negative -$325/month.

    It is VERY hard to get a positive cash flow on rental properties in NY, unless you already down the property of course. Even if you score an excellent deal (Say around $200k) on a 3br sf in those areas you just make around $125 positive cash flow on the property. Unless you section 8 the property (Which in those areas you'd pretty much have to), you'd be dealing with tenants that will probably not only have payment issues, but with squatting. Squatters usually get 6 months until eviction in NYC, and sometimes more if they claim disability or something else. I knew somebody who squatted in an apartment for 2 years!

    But, properties do increase in value in NYC. So, if you're able to break even with a rental for a few years, you could probably make the monthly $125 back if the property stays in good condition. You might even make money if you take the property that has a -$325 loss every month, because chances are that $325k in 2 years that property will go up in value a few points. If it goes up 5% in 2 years you'll make $8450 in equity after you factor in your monthly loss.

    So if you're willing to buy and hold and pay out a bit in the short run, you might be able to sit on that appreciating asset and make a few bucks (But don't forget transfer costs and taxes :)

    0Reply
  • Malcolm V.
    New York City, NY · Member since 2014 · 8 posts · 1 vote
    11y
    Looking at East New York for rentals.. Pretty much bad neighborhoods that have the potential to get better. Id consider renting those.
    0Reply
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