Multi family investment

[Olu Oguntoyinbo]

Hi! Im looking to invest in a multi family property with the NYC/NJ area. This would be my first investment property. With everything so expensive within the east coast how can work cash flow positively? Especially with high interest rates

[Nicholas Mann]

The interest rates are definitely making it a hard market to get into. If you do find a deal and maybe it doesn’t cash flow for the first year or 2 but you can make improvements, raise rents on under market leases, manage property effectively and cover your expenses at least you will have started and can look for better cashflow over time. Look at it as a 20-30 year investment and it should eventually cashflow. Interest rates in the mid 1980’s were 15% plenty of people who bought then and still own those properties probably aren’t talking about how high the interest was anymore. Either way best of luck!

[Jerell Edmonds]

I'm in RI I felt the same but I'm not chasing cash flow anymore. I'm mainly house hacking to get equity build up so i can use that for my next investment . 

[Wale Lawal]

@Olu Oguntoyinbo

Investing in a multi-family property in NYC/NJ can be hard because of high costs and loan rates. Tips include looking into the area, finding places growing, checking rent prices, and looking at loan choices. Bring in more money by charging extra rent and taking care of it yourself. When you figure out money flow, count all costs, and know the laws for renters and owners. You can get help from real estate folks or managers.

Good luck!

[Sam Kahl]

My experience in Baltimore is that while we have plenty of multifamily listings, there aren't many priced really well upfront and most require work. Still, you may try evaluating a different east coast market and seeing if you're liking more of what you see down here compared to NYC/Newark. It takes patience to get a good multi (and decisiveness to act when the right one strikes). The interest rates will hurt you equally no matter the geographic market. I've had investors that come to me originally looking for multis in Baltimore end up switching to SFRs because there's a bit more to choose from, and a decent SFR is better than waiting a year for the right multi.

[Gino Barbaro]

@Olu Oguntoyinbo

The NYC/NJ area is hard to cash flow, but there is appreciation. When I lived there, I ventured to other markets in upstate NY for cash flow.

I would also consider looking at other markets in the U.S. if you are looking for cash flow

Gino

[Ryan Donohue]

Quote from @Olu Oguntoyinbo:

Hi! Im looking to invest in a multi family property with the NYC/NJ area. This would be my first investment property. With everything so expensive within the east coast how can work cash flow positively? Especially with high interest rates

 Hey Olu, 

It's definately hard to make properties pencil from day 1 but my reccomendation would be to practice practive practice underwriting deals to know a deal when you find one. You will get a feel for rents in certain towns and home prices. Some towns you will find a cheap two family where tenants are paying far below market and you can then strategize what you'd do if you bought it to make the numbers make sense. Now if the time where true investors shine and can still make money. Let me know if I can help anymore! 

[Jeffrey Abraham]

Investing in multifamily properties in the NYC/NJ area can be challenging due to high property prices and interest rates, but it’s still possible to achieve positive cash flow with the right strategies. Here are some tips to help you make a successful investment:

Strategies for Positive Cash Flow

1. Careful Property Selection
   • Emerging Neighborhoods: Look for properties in emerging neighborhoods where prices are lower but expected to appreciate. These areas often have better cash flow potential.
   • Value-Add Opportunities: Seek properties that need some renovation or improvement. Enhancing the property can increase rental income and property value.
   • Smaller Units: Consider investing in properties with smaller units, such as studios or one-bedroom apartments, which often have higher rental demand and lower per-unit costs.

[Anthony DiSanzo]

@Jeffrey Abraham is right on with what he is saying. I handle the Central Jersey Area (Middlesex, Monmouth & Ocean Counties). Some investors are leaning on smaller units and even including some mix use options in their search as well to see if those numbers make more sense. 

[Vaughn Smith]

@Olu Oguntoyinbo Its more difficult to cashflow the closer you get to NYC. Cashflow is difficult, but not impossible remember you make your money when you buy, not when you sell. The process is simple, but not easy. Here is how you do it:

1-Research the areas you're interested in make sure to stay away from heavy rent controlled areas. Focus on areas with low vacancy rates, strong rental appreciation and economic growth (check to see if businesses are coming or leaving and what unemployment looks like). during this phase you should decide what tenant profile you are going to target section 8 (or similar)? Cash? MTR? Also make sure your budget fits the market 

2-Analyze deals, make sure you are cash flowing from day 1 (even if you're house hacking) also look for ways to improve the revenue of the units like adding bedrooms if possible

3-Start looking for off market deals and FSBO properties, you want to buy under retail. The MLS is good, but that's where 99% of the buyers shop so competition will be fierce and a bidding war will kill your cashflow. Calling property managers, old rentals etc are also good ways to find deals

Simple not easy. If you make it your mission to find a deal you will...eventually 

[Andrew Garcia]

Quote from @Gino Barbaro:

@Olu Oguntoyinbo

The NYC/NJ area is hard to cash flow, but there is appreciation. When I lived there, I ventured to other markets in upstate NY for cash flow.

I would also consider looking at other markets in the U.S. if you are looking for cash flow

Gino

 What other markets, on the east coast, show positive cash flow?