NYC - When is the time to buy a bargain?

Question

Read a lot of bad news about NYC especially Manhattan, which has a serious problem with vacancies and declining rent (as much as 25%).

Do you think this is just temporary (I'm pretty sure it will roaring back, just not immediately)? Any bargain to be had? I'd love to own a piece of big apple...

Of course, this could be a pipe dream as I can see that there are a ton of investors with hot cash ready to decent like a bunch of vultures...

Alexander Szikla · Answer

Hi Billy, Long term, I think NYC will come back as it always has time and time again. People are already getting bored of the suburbs and coming back! I am also a great believer in investing when there is distress and deploying capital when you can.

Personally, I have had the best luck purchasing co-ops from estate sales. They are less desirable than condos and families typically just want to move on and don't wait around for the highest and best offers.

Even purchasing at the peak, my units still have plenty of equity (albeit less due to COVID-19).

The only downside is (typically) high monthly maintenance costs and (currently) a tough rental market.

With that being said, yield can still be found in Brooklyn/Queens (~6%) and the Bronx (~8%).

If you are looking for yield in the short run, Manhattan may not be for you. If you are seeking out asset accumulation and equity appreciation over the long term then there are certainly fortunes to be made

Billy Zhao · Answer

If you don't mind, can you share a couple of properties for me to study? 20% below ask is a significant drop. I was wondering if a lot of NYC investors are local or from outside (even the country). How many of them are trying to hold on to them with no cash flow right now.

Dennis Cosgrave · Answer

I have lived through distressed markets before. My strategy was to follow the sales statistics; number of properties sold and the average selling price. I waited until both of those statistics turned positive for 3 consecutive months. That was usually the bottom.

Brandon Cohen · Answer

Depending on the seller there are absolutely deals to be had.  I’m getting offers on my listing and offers are consistently coming in 20% below ask.  Just depends on which buyers are willing to dig their heels in and which sellers need to offload.