First Time Investor - Schenectady, NY

[Oudit Rambharose]

Hi All,

I'm a first time investor.  I will be closing on my first 2 properties sometime this month, and have run the cash flow several times.  Each time that I receive more accurate information, the cash flow looks smaller and smaller.  Does this happens to anyone?  The first time I ran the cash Flow, everything looked very positive, and it's still positive, but not as I would hope it would be.  I do live in NYC, so I will be hiring property managers to manage the properties.  As I buy more properties, I will look towards having my brother or friend handle the properties for me.  Also, I'm buying these 2 properties from the management company.  Is that a good idea or did I get into a trap?  FYI, the rent in the area I'm buying the properties from average around $750, but these properties are currently renting for less than $600.  I will be doing an owner finance for both properties, and the title will be under my name.  Even though the cash flow isn't that great as first though, I'm still sticking with it as a learning experience of what and what not to do for my next purchase.  Any suggestions or advice for a first time investor?

[Steve B.]

I've looked at a few in Mont Pleasant and personally I would stay away. The casino will not affect anything in Mont Plesant, it's too far away and divided from the rest of the city by 890. A lot of investors have given me the same story, that rents are under market because they let the property go for so many years. The fact is nobody wants to live in Mont Pleasant unless they have to. Interesting too is someone at Maddalone told me if I bought a property in Mont Pleasant or Hamilton Hill they wouldn't even manage it! 

If you still want to buy in Schenectady I would stick to Stockade, Downtown, and Upper Union St neighborhoods. This is where people want to live, rents are high compared to the property values, and deals can still be found. Around Union college is good too, just stay between union and Nott streets, go across those streets and your rents drop quite a bit.

If you want to know more how the casino will affect Schenectady, google stories about how the Seneca Indian casino affected Niagara Falls, NY. Similar towns with many abandoned homes because most of he manufacturing jobs left town. Basically 10 years later Niagara Falls is the same, the city has wasted all the casino revenue on special interest projects, and the homeowners still have absurdly high property taxes. The same will happen in Schenctady, corrupt liberal politicians will never change.