Help a newbie looking at investing in Buffalo New York

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Help a newbie looking at investing in Buffalo New York

Joel Moore
Residential Real Estate Agent · waterdown, Ontario · Member since 2014 · 21 posts · 6 votes

Hello I`m looking for my first rental in Buffalo New York, Im in Canada but only 1.5h away, so i can still visit my properties occasionally. I will be using a property management company and hope to obtain multiple properties down the road.  Id love to chat with some buffalo investors, or locals that could share their experiences with this market, and help me avoid some of the common mistakes that come with this city. 

Regards, Joel

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Andrew Schultz
Real Estate Broker · Buffalo, NY · Member since 2013 · 102 posts · 36 votes
12y

Hi Joel,

Welcome to BP!  The Buffalo market is full of great opportunities for Canadian investors looking for cash flow opportunities.  We also have a very solid BP Meet Up (next one is September 10).  If you're looking for an agent and property manager still, feel free to drop me a line.  We can talk about some of the specifics regarding your goals and the market.

Some other solid people from Buffalo: @Michael Sherwood (agent, property manager), @David Niles (contractor), and @Pat L. (investor).

Best of luck on your Buffalo conquest!

Drew

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  • Andrew Schultz
    Real Estate Broker · Buffalo, NY · Member since 2013 · 102 posts · 36 votes
    12y

    Hi Joel,

    Welcome to BP!  The Buffalo market is full of great opportunities for Canadian investors looking for cash flow opportunities.  We also have a very solid BP Meet Up (next one is September 10).  If you're looking for an agent and property manager still, feel free to drop me a line.  We can talk about some of the specifics regarding your goals and the market.

    Some other solid people from Buffalo: @Michael Sherwood (agent, property manager), @David Niles (contractor), and @Pat L. (investor).

    Best of luck on your Buffalo conquest!

    Drew

    1Reply
  • Joel Moore
    OP
    Residential Real Estate Agent · waterdown, Ontario · Member since 2014 · 21 posts · 6 votes
    12y

    Thanks, Andrew I have signed up and look forward to meeting some Buffalo BP members. 

    0Reply
  • David Eisenberg
    Investor · Buffalo, NY · Member since 2014 · 7 posts · 2 votes
    12y

    @Joel Moore, welcome to BP! I am a new investor to the Buffalo market as well. Will be make a trip there from downstate NY this weekend to scope out some properties. BP has been a great help with not only understanding the individual markets, but investing overall. The pod casts are a great resource. Happy to chat and network.

    0Reply
  • David NilesBusiness Member
    Property Manager · DeLand FL · Member since 2012 · 860 posts · 243 votes
    12y

    Hey Joel welcome to BP!  As @Andrew Schultz said, their are quite a few of us "Buffalonians" active here so dont hesitiate to reach out and ask questions, we are always glad to help.

    Hi to @David Eisenberg also, look forward to meeting all of you at the next BP meetup.

    Dave

    0Reply
  • Paul Timmins
    Specialist · Rockland, MA · Member since 2010 · 7k+ posts · 2k+ votes
    12y

    @Joel Moore 

    Welcome. Fill in 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 80 past ones to catch up on.

    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 rehabbers.

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

    To find out about an area go to IREM.org search for ARM certified property managers. Call 5 ask them what parts of the city they like/dislike and why. Ask them what they see expenses running per category per unit. What do they see them selling for per unit, what is the market occupancy rate. What are the market rents? Ask them if they know anything coming up for sale. Great way to pick up some good info and possibly a deal.

    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

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  • Account Closed
    Real Estate Investor · Brampton, Ontario · Member since 2014 · 62 posts · 9 votes
    12y

    Hi All,

    I am glad I found this forum. I am in a very similar situation as @Joel Moore is. Have been investing in Ontario but want more CF and invest in the US. I have come across many turnkey property companies from the US but I have been hesitant to make a move. Mainly because I always build a relationship and network first before investing in a certain area. But also, once the high interest loans available for Canadians is included, the numbers don't look attractive anymore.

    I am going to a US buying summit this upcoming weekend; its run by this company:

    http://buyingsummit.com/ if anyone has heard of them let me know. My goal is just to gather information.

    I would love to learn from you guys and participate in the meet ups. @Andrew Schultz 

    what time do you have them in Buffalo? Probably is tough for me to come during a weekday since I am good 3 hours away from the border. But would love to connect on a Friday or weekend. I am also looking for a mentor from the US. If there is anything I can provide in return please let me know.

    Thanks,

    0Reply
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y
    Originally posted by @Joel Moore:

    Hello I`m looking for my first rental in Buffalo New York, Im in Canada but only 1.5h away, so i can still visit my properties occasionally. I will be using a property management company and hope to obtain multiple properties down the road.  Id love to chat with some buffalo investors, or locals that could share their experiences with this market, and help me avoid some of the common mistakes that come with this city. 

    Regards, Joel

    Hi Joel,

    Up state NY is one if the toughest rental markets in the US, in my opinion.

    Having great property management will be the key to anyone's success in those area's.

    I owned properties in Rochester NY and have recently sold out of those investments.

    Thanks and have a great day.

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  • Jonathan Sowinski
    Investor · Buffalo, NY · Member since 2011 · 100 posts · 86 votes
    12y

    @Engelo Rumora I am wondering what are the specific reasons for thinking upstate NY is one of the toughest rental markets?

    0Reply
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y
    Originally posted by @Jonathan Sowinski:

    @Engelo Rumora I am wondering what are the specific reasons for thinking upstate NY is one of the toughest rental markets?

     Hi Jonathan,

    Thanks for your comment.

    One key word "Greed"

    There is too much of it going on there.

    Many operators are going 100 mph and are just pumping the numbers without caring too much about the quality.

    It also difficult to find trustworthy people as everyone seems to be caught up in making profit.

    Thanks

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  • Susan Velasquez
    Ontario · Member since 2013 · 28 posts · 6 votes
    12y
    Originally posted by @Engelo Rumora:
    Originally posted by @Jonathan Sowinski:

    @Engelo Rumora I am wondering what are the specific reasons for thinking upstate NY is one of the toughest rental markets?

     Hi Jonathan,

    Thanks for your comment.

    One key word "Greed"

    There is too much of it going on there.

    Many operators are going 100 mph and are just pumping the numbers without caring too much about the quality.

    It also difficult to find trustworthy people as everyone seems to be caught up in making profit.

    Thanks

     Agreed with this observation.At least with some people we dealt with in Buffalo.Hoping things will be better as we expand our WNN connections.

    0Reply
  • Michael Sherwood
    Investor · buffalo, NY · Member since 2008 · 354 posts · 23 votes
    12y

    @Engelo Rumora @Jonathan Sowinski 

    I believe there are folks out there that are not quality property managers which make the reputation as you described for this area. With that being said I believe that if you are doing quality work as a property manager there needs to be profit because at the end of the day you have bills too.  I also think a quality property manager has to educate their clients on what is needed because they tend to know the markets better because they are living in the market.  With this in mind the right expectations can be set for both the owner and property manager, with this mutual win can be achieved. 

    Mike

    0Reply
  • Jonathan Sowinski
    Investor · Buffalo, NY · Member since 2011 · 100 posts · 86 votes
    12y

    @Engelo Rumora 

    I was hoping for some sort of analytics or quantitative basis for your original statement of "Up state NY is one if the toughest rental markets in the US, in my opinion" Unfortunately, "greed" being the basis does not do it for me and I have to respectfully disagree with you.

    How "greed" is specific to a region or market? 

    Also, I initially didn't think that generalizing "upstate" (approximately 54,000 sq miles) was going to be fair, and you have confirmed my opinion through your reasoning.  

    I can share that where I have invested in "upstate" specifically WNY, more specifically the City of Buffalo it has been fairly easy to realize decent returns (15% Caps 20% ROI with buy and holds (these are in the nice neighborhoods too) and 165% CoC on my rehab) and I do not try too hard and would consider myself still "greenish" in the REI world.

    The one thing I do agree with is the importance of finding a good PM if you are not managing yourself. 

    I am assuming that you are basing your opinion on a poor experience with a PM (or a few)...?   Perhaps you could share some lessons learned?

    0Reply
  • Joel Moore
    OP
    Residential Real Estate Agent · waterdown, Ontario · Member since 2014 · 21 posts · 6 votes
    12y

    Thanks for the discussion and comments, it sounds like its easy to get hurt in Buffalo if you don't due some extensive due diligence.  I'd imagine the process would be easier for a local like @Jonathan Sowinski than out of state or country investors. I guess I will have to work harder!

     That said I'd also love to hear some more specific problems with Buffalo that investors have had, so myself and others can try to avoid the same pitfalls or mistakes.

    0Reply
  • Shannon Sadik
    Rochester, NY · Member since 2014 · 152 posts · 65 votes
    12y
    Originally posted by @Jonathan Sowinski:

    I can share that where I have invested in "upstate" specifically WNY, more specifically the City of Buffalo it has been fairly easy to realize decent returns (15% Caps 20% ROI with buy and holds (these are in the nice neighborhoods too) and 165% CoC on my rehab) and I do not try too hard and would consider myself still "greenish" in the REI world.

    Jonathan, your comment is curious to me for a few reasons: 1) you are "greenish", 2) you do not "try too hard" and 3) these are in nice neighborhoods. I ask because I am a newbie, who just moved to Rochester, looking to purchase an owner occupied MF here, and am working with an experienced realtor/investor. However, I am struggling to find good cap rates; some homes actually have negative cash flow and are being bought up. I ask because you mentioned that these were in the nice neighborhoods too. We want to live somewhere somewhat decent, but the best cap rates I have yet to find are 8% and they are snatched up quickly. Do you find Buffalo to be similar to Rochester? From all I have heard, I thought that they were, so I am wondering what you are doing that I can be doing?

    0Reply
  • Larry Turowski
    Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes
    12y

    @Shannon Sadik "Nice" is relative.  I don't think he is talking about the type of neighborhoods I know you are looking in.  I think the neighborhoods I have properties in are nice, too, but again, not comparable to where you are looking.

    @Engelo Rumora You may have just found better property managers elsewhere.  I've heard plenty of horror stories about PMs here.  And I know some investors here have raked unsuspecting investors across the coals.

    As others have said, a good PM is critical. 

    0Reply
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y
    Originally posted by @Jonathan Sowinski:

    @Engelo Rumora 

    I was hoping for some sort of analytics or quantitative basis for your original statement of "Up state NY is one if the toughest rental markets in the US, in my opinion" Unfortunately, "greed" being the basis does not do it for me and I have to respectfully disagree with you.

    How "greed" is specific to a region or market? 

    Also, I initially didn't think that generalizing "upstate" (approximately 54,000 sq miles) was going to be fair, and you have confirmed my opinion through your reasoning.  

    I can share that where I have invested in "upstate" specifically WNY, more specifically the City of Buffalo it has been fairly easy to realize decent returns (15% Caps 20% ROI with buy and holds (these are in the nice neighborhoods too) and 165% CoC on my rehab) and I do not try too hard and would consider myself still "greenish" in the REI world.

    The one thing I do agree with is the importance of finding a good PM if you are not managing yourself. 

    I am assuming that you are basing your opinion on a poor experience with a PM (or a few)...?   Perhaps you could share some lessons learned?

    Hi Jonathan,

    Thanks for your post albeit I sense sarcasm within it.

    I contribute to this forum to share my opinion and experiences and have no intentions of getting into any online keyboard banter.

    Most individuals will have different perceptions on different circumstances and I never argue that I am right or wrong.

    My perception on the upstate NY market comes from being personally involved in 25+ transactions in the last 2 years and also having close partners that transact in 100+ per year.

    My opinion is also based on mostly larger groups/turnkey operators and not individual investors doing 1 or 2 deals per year or a bad experience with 1 or 2 property managers as you mentioned.

    Feel free to send me a private message and I will be more than happy go into more depth. Or even better I am actually visiting the area and will be in Buffalo on the 17th of this month and am happy to spare a few moment to discuss in person.

    Thanks and have a great day.

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  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y
    Originally posted by @Michael Sherwood:

    @Engelo Rumora @Jonathan Sowinski 

    I believe there are folks out there that are not quality property managers which make the reputation as you described for this area. With that being said I believe that if you are doing quality work as a property manager there needs to be profit because at the end of the day you have bills too.  I also think a quality property manager has to educate their clients on what is needed because they tend to know the markets better because they are living in the market.  With this in mind the right expectations can be set for both the owner and property manager, with this mutual win can be achieved. 

    Mike

    Hi Michael,

    Thanks for your comment.

    I am 100% for profit. I also believe business should be conducted with honesty, loyalty and by not being greedy.

    I have witnessed and heard stories from investors getting cheated by many PM's in Rochester that would tack on stupid fees on top of maintenance calls.

    On a few occasions it was proven that no work was even carried out and it was a fake maintenance expense.

    Its very sad to see these these things happening.

    Thanks and have a great day.

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  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y
    Originally posted by @Larry Turowski:

    @Shannon Sadik "Nice" is relative.  I don't think he is talking about the type of neighborhoods I know you are looking in.  I think the neighborhoods I have properties in are nice, too, but again, not comparable to where you are looking.

    @Engelo Rumora You may have just found better property managers elsewhere.  I've heard plenty of horror stories about PMs here.  And I know some investors here have raked unsuspecting investors across the coals.

    As others have said, a good PM is critical. 

    Hi Larry and thanks for your comment.

    I don't even want to start with the horror stories of PM's in Rochester.

    I sometimes wear a white shirt and red cross on my back trying to assist fellow Australian investors that have bought and are now suffering severely.

    Thanks and have a great day.

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  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y
    Originally posted by @Shannon Sadik:
    Originally posted by @Jonathan Sowinski:

    I can share that where I have invested in "upstate" specifically WNY, more specifically the City of Buffalo it has been fairly easy to realize decent returns (15% Caps 20% ROI with buy and holds (these are in the nice neighborhoods too) and 165% CoC on my rehab) and I do not try too hard and would consider myself still "greenish" in the REI world.

    Jonathan, your comment is curious to me for a few reasons: 1) you are "greenish", 2) you do not "try too hard" and 3) these are in nice neighborhoods. I ask because I am a newbie, who just moved to Rochester, looking to purchase an owner occupied MF here, and am working with an experienced realtor/investor. However, I am struggling to find good cap rates; some homes actually have negative cash flow and are being bought up. I ask because you mentioned that these were in the nice neighborhoods too. We want to live somewhere somewhat decent, but the best cap rates I have yet to find are 8% and they are snatched up quickly. Do you find Buffalo to be similar to Rochester? From all I have heard, I thought that they were, so I am wondering what you are doing that I can be doing?

    Hi Shannon,

    MLS would be the last place I would to find a great deal. Spend enough time working the emails and attending local RE meetups and you will open doors to wholesalers or even bird dogs that can source property for you at amazing figures.

    We are based in Ohio and some of the cap rates that we find are stupidly good ;)

    Just bought an A class property here in Toledo for $35,000 at Auction that after a $15,000 renovation will rent for $1,100 - $1,200pm showing a 20% net return.

    A walk it out the door sale price would be $85,000.

    Be patient and the right deals always come along.

    Thanks and have a great day.

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  • Shannon Sadik
    Rochester, NY · Member since 2014 · 152 posts · 65 votes
    12y

    thanks @Engelo Rumora ! I appreciate the encouragement and plan on attending the next REIA meeting.

    @Larry Turowski , do you know of any meetup groups outside of REIA here?

    0Reply
  • Engelo RumoraBusiness Member
    Investor · Toledo, OH · Member since 2013 · 4k+ posts · 2k+ votes
    12y
    Originally posted by @Shannon Sadik:

    thanks @Engelo Rumora ! I appreciate the encouragement and plan on attending the next REIA meeting.

    @Larry Turowski , do you know of any meetup groups outside of REIA here?

    My pleasure Shannon :)

    Happy to help.

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  • Larry Turowski
    Flipper/Rehabber · Rochester, NY · Member since 2014 · 1k+ posts · 1k+ votes
    12y

    @Shannon Sadik No, I don't know of others. But the REIA group has several sub-groups. Maybe one of these days I'll host group. I don't get to talk enough at my day job. :)

    0Reply
  • Michael Sherwood
    Investor · buffalo, NY · Member since 2008 · 354 posts · 23 votes
    12y

    I actually one in Buffalo, we have one next week if interested.

    @Larry Turowski 

    @Shannon Sadik 

    0Reply
  • Shannon Sadik
    Rochester, NY · Member since 2014 · 152 posts · 65 votes
    12y

    @Michael Sherwood  Thanks! But I think I need to try to wrap my head around Rochester first. :)

    0Reply
  • Jonathan Sowinski
    Investor · Buffalo, NY · Member since 2011 · 100 posts · 86 votes
    12y

    @Engelo Rumora I wasn't trying to start any banter, I just thought your statement was a little broad-brushed, sorry if my sarcasm bled through the keyboard...

    I would love to meet up when you are in town.

    @Shannon Sadik @Larry Turowski 

    I do not know the Rochester market very well...so can not comment on it specifically.

    We started with a  owner occupied double that we where seeing any cash flow while living in there, just a greatly reduced mtg payment.  We just moved out and are now seeing the cash flow...What are you basing your 8% on the total potential rent?  Some folks might think that 8% in an "A" neighborhood is good.  

    We also picked up an 8-unit that gets ~$200/door (both of these are in the "nice" Elmwood Village neighborhood.

    We bought off the MLS in the beginning and I believe timing had a lot to do with those early deals. since then the area has really seen a huge change in the market (last 2 years) and you would be hard pressed to find something in that area on the MLS that produced.

    Moving into the West side you can still get great numbers and if you are ready to pull the trigger could probably find it on the MLS. Also, in areas of south buffalo and some of the subburbs you could probably find something that work off the MLS, though probably nothing like Engelo's 20% net in a "nice" neighborhood.

    Now we are mainly focusing on off-market properties...

    I would echo Engelo and suggest you keep at it, network and stay motivated while educating yourself.

    Also, there is a local BP meetup scheduled here for Sept. 10th if you wanted to check it out. 

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