Buying in NYC

8 Replies

Hi everyone- 

I'm Eva, am a newbie to Bigger Pockets. I'm in a bit of a predicament and was hoping to get some advice/suggestions. I would like to start investing but I'm not really sure how to go about it. 

I live in NYC and as you all know it's hard to make an ROI in the first couple years (maybe only once it appreciates). I also have a very demanding job (am in consulting) which does not provide a lot of flexibility to look at places. So my questions are the following:

(1) Should I even try to invest in NYC (buying a small condo or something)? If not what are better alternatives that are nearby?

(2) Should I look into out of state investing?

(3) Are there alternatives to hands on investing and what are some passive investing options? (maybe that's a better option since my time is limited and there aren't a lot of buying options in the area)

Thanks in advance!!

@Eva G.    Welcome to the community. NYC is definitely tough for positive cash flow.It is just about impossible. This is true for NYC, LA, SF, an a few others. I live in LA and I invest in the NYC metro area, in North Jersey. I have found some areas (even with the high property tax) that cash flow. It's not easy, but it is possible. Since you are living in NYC, I am not sure how you feel about out of state investing. You can always look into Long Island, Staten Island, North Jersey or upstate NY. I have heard that there is cash flow in each of those places. Good luck with which ever you decide and  can assure you that you'd have the support of the website.

Some places in Queens are still possible to get positive cash flows by buying and holding. Of coursing comparing to other places, the return on rental is very low, but the appreciation is great. Tracking Zillow's Zestimate for a while, it's actually quite reliable for some areas that I know, and in the last a few months, very easy to get 60K to 70K of appreciation based on a property valued at 600K to 700K.

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Originally posted by @Eva G. :
(1) Should I even try to invest in NYC (buying a small condo or something)? If not what are better alternatives that are nearby?

(2) Should I look into out of state investing?

(3) Are there alternatives to hands on investing and what are some passive investing options? (maybe that's a better option since my time is limited and there aren't a lot of buying options in the area)

Thanks in advance!!

 I don't know the NYC market however I also have heard that like California and other states around the country, it doesn't have a high cash flow.

(1) Are you primarily looking for cash flow, or for appreciation?  If you are looking for cash flow then you're likely not getting it in NYC.  If you're looking for appreciation, then it might be a good investment.

(2) You can definitely look into out of state investing.  Some will say it's harder because you aren't local, and you can't visit the properties yourself.  However if you are in a high time demand job like consulting, even if you're local you may not have that much time to sink into that anyway.

There are ways to invest out of state and still get a return. One is by buying from a reputable turnkey company. The key is "reputable" as there are a bunch of badly run and poorly managed ones out there. The upside is that it's mostly hands-off, the downside is that your ROI isn't going to be that high. Another way is by establishing a team on the ground where you want to invest. The upside is that you can get a higher return, the downside is that you have to take time to build that team.

(3) You don't have to be a landlord to make investments. You can invest in a REIT, which upside is that they are established, but downside lower ROI. There's crowdfunding. There have been posts on crowdfunding here on BP. Some have gone well, some not so well. There's also private lending. The upside to this is that you get to work with another investor to make their goals a reality, but the downside is that you do have to spend some time to get to know someone, make sure they have the experience level you can trust in, and build a relationship with that person.

There is definitely a lot to think about.  But just break it down into pieces.  Decide if you want to be a landlord and own property, or do another type of investing.  Once you have that decision made, then you just have to go down the decision tree.

@Eva G.

Welcome. Time to build the foundation below.

Check out the Start Here page http://www.biggerpockets.com/starthere

Check out BiggerPockets Ultimate Beginner's Guide - A fantastic free book that walks through many of the key topics of real estate investing.

Check out the free BiggerPockets Podcast - A weekly podcast with interviews and a ton of great advice. And you get the benefit of having over 90 past ones to catch up on.

Two Great reads, I bought both J. Scott The Book on Flipping Houses,The Book on Estimating ReHab Costshttp://www.biggerpockets.com/flippingbook

Locate and attend 3 different local REIA club meetings great place to meet people gather resources and info. Here you will meet wholesalers who provide deals and all the cash buyers (rehabbers) you will need.

Consider checking out HUD homes for small multi's owner occupied gets first crack.

You might consider Niche or Specialized Housing like student housing. Rents can be 2-4 times more. Remember you don't have to own a property to control it.

Download BP’s newest book here some good due diligence in Chapter 10. Real Estate Rewind Starting over

http://www.biggerpockets.com/files/user/brandonatbp/file/real-estate-rewind-a-biggerpockets-community-book

Good luck

Paul

Welcome Eva, it's tough to find workable deals in major urban markets like NYC & LA without a ton of cash or leverage.  You might want to consider investing in a crowdfunder like groundfloor.us where you can leverage your funds while earning 8% to 12% with as little as $100 in...that's right, you can get started investing with a $100 bucks.  I love the concept and am using it to raise funds for our renovations but also investing their as well.

You can also consider joining forces with a turn-key operator or joint venture with others where the deal is attractive or makes sense from your perspective. We JV with investors with at least $20k. We find them a property, they take title to it, we fix, rent and sell it off & split the profits. You can follow a project we have in atlanta on groundfloor.us to see how it goes. We have $37k in the property and we are spending another $28k to renovate it.....once it is rented it will be sold off for between $110k and $140k. We already have a buyer at $110k. Our model is shared housing and, though a tough one to work, the profits and minimized risks make it worth the effort. This front-end partner is looking at a 60% to 90% return on investment in under 12 months. Our back-end buyers purchase strictly based on net cashflow and see 7% to 12% returns on average.

You will find tons of TK operators here on BP...just find the ones who have a financial incentive to perform.  Some are in the murder capitals of america so not sure why anyone would want to invest there...but within those cities there are some TKs who have been there for decades and have the boots on the ground to make it work.  Lot's of options depending on what you have to invest and your risk for pain!  The crowdfunders are an excellent way to get involved with little risk and PERFECT for many of the BP crowd who like kicking tires.  Look for the deals where the investor posting will offer a personal guaranty on the project to gain an extra measure of success.  Happy Investing!

I'm in LA so same price problem out here. I've always bought out-of-state properties, and I buy them turnkey so they are hands-off. It's always worked out great, I wouldn't do it any other way!

Whatever way you go, I just don't recommend NYC properties because you'll be in the negative something fierce.

Hello, one thing to keep in mind is in NYC there are housing programs that might sell 2-4 families. I live in Harlem and know people who got in that way. You live in one unit and rent out the rest. Not for everyone but that is an option. But, you need to be ready to move on it when and if they call.

Welcome to bp! 

  If there was a way for you to invest in NYC with 40% down you could get cash flow going and join the exclusive list of investors with top tier appreciation. In the Queens example above that one produced 10k a month in appreciation. Returns like that are why NYC/LA/SF/Paris/London attract investors worldwide. 

The turnkey option also could be an attractive more passive play but anyone can do that...it is not very exclusive as compared let's say. 

NYC vs other options? No official recommendation other than go with what fits your longterm investment goals and expectations best. 

BTW, Jay H. Wrote a free ebook on investing out of state, check it out here. There are going to be some rules you want to closely follow. He has 40 years experience with turnkeys and the rest. Good luck with your search!

http://www.biggerpockets.com/forums/517/topics/146...

Thanks,

Matt