How is NYC real estate surviving?

Member since 2020 · 23 posts · 10 votes

Hi, Im new to BP. Queens nyc resident. trying to invest, but i see no places that are worth investing in. based on new tenant laws and high prices, how are buy and hold investors making it work?

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Mark Allen Kenny

Investor · New York City, NY · Member since 2016 · 155 posts · 105 votes

Welcome, @Andrew Brown! I'm in NYC too. I love living here but it just doesn't make sense to own rentals here. Have you ever considered investing in Philadelphia? It's only about 2 hours away, the cap rates are great. The rental laws are very landlord-friendly and the property taxes are low. It's a great place to get started if you live in NYC. There are some good markets in Jersey as well.

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Anthoney Hanks
Real Estate Broker · Forney, TX · Member since 2019 · 1k+ posts · 399 votes
6y
Welcome to BiggerPockets! Truly nice to meet you. Good luck going forward! Hope the best for you going forward in 2020!! There is a good book on long distance investments by @David Greene. That might be work reading. I wish you the best in your quest.

Podcast: https://www.biggerpockets.com/podcast

Webinars: https://www.biggerpockets.com/webinars

Glossary: https://www.biggerpockets.com/rei/glossary

@David Greene and @Brandon Turner has some good ones.
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Andrew Brown
OP
Member since 2020 · 23 posts · 10 votes
6y
Thanks Anthoney much appreciated!! I hear southeast is a good place to invest. Bit wary of shady contractors/ property managers but I have to take the plunge eventually!!
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Michael Carbonare
Investor · Fort Lauderdale, FL · Member since 2013 · 917 posts · 607 votes
6y
@Andrew Brown I feel your pain. I left NYC many years ago. It was an overpriced, over taxed, over regulated industry back then. It has gotten much worse from what I see and hear. To quote Horace Greely, "Go West, young man." But I'll add to that. . .go South, or North, or Midwest. All kidding aside, you'll find it easier to invest in markets that are more investor friendly. Lower entry point, landlord friendly, etc. Don't be put off by working deals from a distance. With some planning and due diligence it can be done.
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Andrew Brown
OP
Member since 2020 · 23 posts · 10 votes
6y
did you invest away from home? How did you find quality property managers and contractors? I fear dealing with dishonest contractors or property managers
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Michael Carbonare
Investor · Fort Lauderdale, FL · Member since 2013 · 917 posts · 607 votes
6y
My market is here in south FL, Miami-Fort Lauderdale. Overpriced, obnoxious sellers, and way too many investors fighting for crumbs. Been that way for years. I opted a long time ago to invest where the grass is greener. Meaning markets that are more investor friendly. So, yes, much of our investing is now out of state. Crooked contractors are the norm, not the exception, so your fears are well grounded. Until I became established financially and developed a trustworthy network, I worked short term deals. Assignments that allowed me to get quick cash rather than buy and hold and all the potential problems that came with that approach. Then, when I had more cash to ride out any setbacks and had gained some faith in local partners, I was able to consider other strategies such as fix and flip and buy and hold. It's a process, @Andrew Brown.
1 Reply
Mark Allen Kenny
Investor · New York City, NY · Member since 2016 · 155 posts · 105 votes
6y
Welcome, @Andrew Brown! I'm in NYC too. I love living here but it just doesn't make sense to own rentals here. Have you ever considered investing in Philadelphia? It's only about 2 hours away, the cap rates are great. The rental laws are very landlord-friendly and the property taxes are low. It's a great place to get started if you live in NYC. There are some good markets in Jersey as well.
5 Reply
Dawn BrenengenBusiness Member
Moderator
Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes
6y
@Andrew Brown I can't imagine investing in NY now that they have passed all the very landlord unfriendly laws recently.
Podcast Guest on Show #101
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Jason Sinclair
Investor · East Coast · Member since 2020 · 21 posts · 4 votes
6y
@Mark Allen Kenny are you currently investing in Philadelphia? My wife and I are also NYC'ers and we're getting close to pulling the trigger on our first property there. Would love to connect and discuss the market, share thoughts, research, etc.
Cheers, JS
0 Reply
Mark Allen Kenny
Investor · New York City, NY · Member since 2016 · 155 posts · 105 votes
6y
@Jason Sinclair of course. Just send me a message. Happy to hop on the phone or help however I can.
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Chris K.
Attorney · Nashville, TN · Member since 2015 · 1k+ posts · 1k+ votes
6y
@Andrew Brown
On the new construction side, it's a very hot market. We work with many major developers and GCs in the area. They literally cannot build fast enough.
The problem is that you can't really compete with those institutional investors. So I don't know how an "average" investor makes out in that market. Many folks I know did well in the past decade or so thanks to their owning properties in the surrounding boroughs before they got hot. But again, there's a big element of luck counting on such appreciation.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

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Andrew Brown
OP
Member since 2020 · 23 posts · 10 votes
6y
@Michael Carbonare what do you mean by assignments? Wholesaling?

Originally posted by @Michael Carbonare:
My market is here in south FL, Miami-Fort Lauderdale. Overpriced, obnoxious sellers, and way too many investors fighting for crumbs. Been that way for years. I opted a long time ago to invest where the grass is greener. Meaning markets that are more investor friendly. So, yes, much of our investing is now out of state. Crooked contractors are the norm, not the exception, so your fears are well grounded. Until I became established financially and developed a trustworthy network, I worked short term deals. Assignments that allowed me to get quick cash rather than buy and hold and all the potential problems that came with that approach. Then, when I had more cash to ride out any setbacks and had gained some faith in local partners, I was able to consider other strategies such as fix and flip and buy and hold. It's a process, @Andrew Brown.

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Michael Carbonare
Investor · Fort Lauderdale, FL · Member since 2013 · 917 posts · 607 votes
6y
@Andrew Brown I was referring to a strategy called a Cooperative Assignment. It's a type of lease option. Risk free and no cash out-of-pocket. Not like wholesaling, at all. In fact, the opposite. We put together a full priced lease option with a homeowner, and then assign the deal to a tenant/buyer. No middle man, homeowner receives a full price, easier to get the homeowner to agree to do the deal.
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Brian Holt
Real Estate Agent · Member since 2018 · 70 posts · 19 votes
6y
@Andrew Brown listen to long distance investing podcasts on biggerpockets. Other markets are more affordable
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Andrew Brown
OP
Member since 2020 · 23 posts · 10 votes
6y
Thanks @Brian Holt!! Will.do!!
Do you know of any pm or agents in the Orlando area? I have family there so I'm considering investing there also.
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Andrew Brown
OP
Member since 2020 · 23 posts · 10 votes
6y
Thanks @Michael Carbonare. Very insightful!! Thanks @Chris K. Makes alot of sense why the numbers in nyc don't add up. I've seen that alot of.listings in Brooklyn say corporate owned..its ridiculous
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Andrew Brown
OP
Member since 2020 · 23 posts · 10 votes
6y
@Dawn Brenengen I hear NC market is doing great. That true?
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Andrew Brown
OP
Member since 2020 · 23 posts · 10 votes
6y
@Mark A. Kenny Would.i be able to speak to you over the phone as well?
Thx for the reply
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Ronan DonnellyPro Member
Investor · New York City, NY · Member since 2012 · 332 posts · 385 votes
6y
Originally posted by @Andrew Brown:
Hi, Im new to BP. Queens nyc resident. trying to invest, but i see no places that are worth investing in. based on new tenant laws and high prices, how are buy and hold investors making it work?

They pay cash!
[email protected]
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Andrew Brown
OP
Member since 2020 · 23 posts · 10 votes
6y
@Ronan Donnelly are these regular new Yorkers paying cash or is it mostly institutional or foreign investment money?
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Andrew Brown
OP
Member since 2020 · 23 posts · 10 votes
6y
@Brian Holt thx for the reply!!
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Brian Holt
Real Estate Agent · Member since 2018 · 70 posts · 19 votes
6y
@Andrew Brown I cover Tampa and Orlando area. Let me know if you ever have any questions.
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Dawn BrenengenBusiness Member
Moderator
Real Estate Broker · Raleigh, NC · Member since 2014 · 2k+ posts · 1k+ votes
6y
@Andrew Brown I'm in Raleigh, NC, and it's doing phenomenally. Homes have been appreciating nicely (without going up so rapidly it's unsustainable). We have both job and population growth. Traffic is getting worse, but it's still better than most cities. :) It's just a really nice place to live.
Podcast Guest on Show #101
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Ronan DonnellyPro Member
Investor · New York City, NY · Member since 2012 · 332 posts · 385 votes
6y
Originally posted by @Andrew Brown:
@Ronan Donnelly are these regular new Yorkers paying cash or is it mostly institutional or foreign investment money?

It's more a case of investors looking for safety in terms of principle in exchange for lower yields. With the new rent control rules there has been an increase in people wanting to sell which probably represents an opportunity for someone with a longer term view.

[email protected]
1 Reply
Juan Barreneche
Real Estate Agent · NYC & FL · Member since 2014 · 69 posts · 29 votes
6y
@Abel Curiel
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Abel CurielBusiness Member
Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
6y
Originally posted by @Andrew Brown:
Hi, Im new to BP. Queens nyc resident. trying to invest, but i see no places that are worth investing in. based on new tenant laws and high prices, how are buy and hold investors making it work?

Hey Andrew!
Many new investors in NYC + Long Island are making it work by house-hacking. Cash buyers and other experienced investors are jumping on off-market, undervalued deals, but these deals are tough to come by and even tougher to CLOSE for newer investors.
Here are the reasons why folks use the house-hack strategy when building/growing their NYC portfolio:
- They can get in with a low down payment - You can get into a multifamily property property in Queens, Brooklyn, the Bronx, and Long Island with less than $35K!
- They can significantly lower their current living expenses - People currently paying ~$2K/month in rent can pay as little as half of that for their portion of the mortgage (after collecting rental income).
- They gain acquisition, project management AND property management experience - all which will help tremendously when its time to scale and grow the portfolio.
- NYC properties appreciate higher than most parts of the country - of course, this should not be relied upon. Rather, it should be looked at as a bonus!
Best of luck to you on your journey!
Abel
REbuild Team - eXp Realty5234 Reviews
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