Investor · Albany, NY · Member since 2017 · 58 posts · 22 votes
Hi All-just joined BP. I am a CPA who works and lives on Long Island.
I wanted to see who is in the Long Island area and has valuable information for a newbie entering the LI real estate investing market. Seeking to connect and network with a local experienced real estate investors or any other like-mind individuals.
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
@James Caruso Ok, not too bad. @Rich Becker@Christopher PhillipsI just got word of something going on tomorrow night in West bury. Waiting for the info. I can PM you guys if your free. Can't post the info in this forum.
Investor · Albany, NY · Member since 2017 · 58 posts · 22 votes
9y
Thanks, James Caruso . I have family who do short sales near you in Shirley. Shawn Ackerman DM me with the details if it is tomorrow, I'll try to make it.
Investor · Albany, NY · Member since 2017 · 58 posts · 22 votes
9y
Thanks Apoorva K. & George Waters .
I am also seeking some buy and hold investing opportunities. Do you have any investments on Long Island yet? I am still in the "education phase", but I have a few target areas in mind.
Investor · Commack, NY · Member since 2014 · 22 posts · 5 votes
9y
No - I don't have any locally. I researched queens last year, and quickly dropped it because of NYC laws and that market is too hot there.
Then worked on Nassau and mostly Suffolk (west & central Suffolk). What I found was that numbers are little better in Suffolk. But it's still quite low IMHO. Even if we don't include much on capex, vacancy and PM, it was generally hard to go beyond 6 CAP. When one is making larger investment here, I didn't like those numbers. Specially I don't want to manage properties - so if I add PM, numbers just didn't make sense.
That demotivated me. And I started looking elsewhere.
OTOH, vacancy is very little anywhere on the island. So that's a plus. And that rents have increased quite a bit in last 2 years or so.
If you are looking in Suffolk, do LMK. Will be more than happy to share what I saw.
Investor · Albany, NY · Member since 2017 · 58 posts · 22 votes
9y
Apoorva K. Thanks for the information. Just by following the basic rules of thumb, it's hard for me to imagine any of my desired properties making sense. For example, 2% rule (monthly rent being 2% of the of the purchase price) on a $300k home rent would need to be $6k a month. Are the prices just too inflated in LI? In my view you'd need a 2 family home to make any property look somewhat economical. I understand this is just a general rule, but is there something I am not considering? Is the assumption of gradual appreciation necessary?
Investor · Commack, NY · Member since 2014 · 22 posts · 5 votes
9y
@Rich Becker Yes, you are right on most of things you mentioned. Prices are high here on LI. 2% is a dream. I was looking for 1%, and even that is hard to get.
I guess if one looks harder, spends more time and efforts, one can find deal(s) here as well. Just that for me, overall scenario didn't make sense : prices are high, so too much capital invested in single property, and most of these houses are old. After 50 years, any house would need maintenance. So it's more than just a PM job.
I do sound negative here, but it doesn't mean it won't work here. There are many people here who are doing it successfully on Long Island - just like Kiyosaki said. May be they can chime in and advise both of us.
East Setauket, NY · Member since 2016 · 3 posts · 0 votes
9y
Hello, my name is Michael I am a recent homeowner in Setauket, Long Island, NY and ever since have become very interested in buy and hold investing. Stony brook University is around the block from me and I know the university has a lack of housing for students. A house up the block from me (originally a 3/2 but converted garage made it to a 5/2 - Heather Wood split ranch) is renting for $3800 to grad students. It was listed available for rent last spring and the owner filled it as soon as it was vacant. He's owned the house since the 90s (paid maybe $130k back then) so must be cash flowing well. Obviously students can be a risk but there is also alot of wealthy foreign students who may pay lease in full. I am on the prowl all the time on mlsli for SFM properties and alot of the houses do not make sense financially for cap rate, etc. But some mediocre SFM 3/2+ houses are renting for 3k+ to single families. Over here, I tend to see long initial ~2 month vacancies, but once rented they rarely come back on vacant. There is a huge lack of multi family properties on long Island so SFM will work out. Lastly, property taxes are an issue... In 1 year my property taxes jumped from $8500 to $9200 so need to greeve but investor needs to prepare for that.
Investor · Commack, NY · Member since 2014 · 22 posts · 5 votes
9y
@Michael Poat - SBU is a good idea. What would be market value of that 3/2 converted to 5/2 house? Is there any (extra) town inspection for student/shared housing?
For 3800 rent, if I were to do back calculation, 12K tax, 2K insurance, 10%PM and 10K for closing - price should be around 330K to make it 8CAP. And that would be without any capex and vacancy considerations. If I add 8% of rent towards it, then 330K (+10K) would make it <7CAP.
7 CAP appears low, but that's very difficult to achieve - is what I saw.
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
9y
Rich Becker Christopher Phillips sorry I didn't get back to you guys about the meet up last week. The guy never sent me the info. Hope
You guys are doing well. Seems like we have more Long Islanders since last week. Excellent!!!
East Setauket, NY · Member since 2016 · 3 posts · 0 votes
9y
@Apoorva K. I do not think you need any 'extra' town inspection for student/shared housing however you do need to obtain a Rental Registration Permit from the Town of Brookhaven. The permit requires copies of Certificate of Occupancy - (the converted garage must be legal), CC, CEU, & CZC.
Not sure of the specifications for rental permits in all Towns (Babylon, Islip, etc), but the Town of Brookhaven permit requires renewal every 15 months for SFM + you need a NYS licensed Home Inspector to inspect the home and sign off. So a 15 month recurring ~$500 for inspection + $455 fee for 5/2 permit. Add that to expenses.
Secondly, where did you get your 12K tax + 2K insurance from or this just rough LI estimate? The taxes on the 5/2 property are $9500. And what are going insurance rates for 300K-350K properties when renting them out?
Lastly, when you calculate your CAP rate are you doing ((Monthly rent * 12) - 12K tax - 2K insurance - 3160PM) / home price)*100 = CAP rate? Still learning here myself and want my numbers straight for analyzing LI properties.
Investor · Commack, NY · Member since 2014 · 22 posts · 5 votes
9y
Right, 12K tax and 2K insurance are just rough numbers so we arrive at price and cap rate. They do vary a bit depending on everything (schools, neighborhood, proximity to water, size/location of property and so on), but 12+2=14K are good starting points to do numbers on small multis.
For cap rate,
Cap Rate = ((TI-TE)/PP)*100
Where TI = Total Income (yearly)
TE=Total Expenses (yearly)
PP=total Purchase Price including closing & financing costs
That's for rough numbers.
When I do detailed numbers, some parts are adjusted. For example, take realistic rents after stabilization, take out tax payment section from closing costs etc.