Best place to invest in the Hudson River Valley (upstate NY)?

39 Replies

Hi, BP friends! 

I'm looking to invest in a multi-family property (BRRR) in upstate NY, and have been exploring Newburgh, Kingston, Cornwall-on-Hudson, Coldspring, Beacon, and Poughkeepsie.

I'm new to this area - does anyone have thoughts or insight into these markets? Maybe you own a rental in one of the cities above and have some lessons learned you could share? Any investor-friendly realtors I should work with? Tax breaks for renovations I should know about?

Thanks in advance!

-Megan

Hi Megan! I'm in that market, and there are opportunities to BRRR in each of those cities you mentioned. Will you be managing the entire process from Oregon? Do you have "boots on the ground?" Curious to know more about your strategy so I can best offer some help if possible...

Hi @Jared Gettinger ! My partner and I are doing some long-term traveling, and we're currently in Brooklyn through October. My hope is to purchase a place while we're here, stay until any needed renovations are done (maybe living in one of the units while we renovate), and then either manage the rental process remotely or find a property manager. I've been able to manage my Portland property remotely for the past year without too many hiccups. Thanks for your input!

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Hi Megan,

We are an investor's brokerage in Kingston/Ulster Co, and work with affiliate brokers in Beacon, Poughkeepsie and Newburgh if you need a referral.

Very truly yours,

Cree

@Megan S. I have keyword alerts set up for Newburgh. I checked out some of the cities you mentioned and I came up with Newburgh being the best for me. It happens to be close enough...Kingston is great but a hike from westchester. Poughkeepsie I don't like the administration of the city not so much a political thing. They just seemed to not care about fixing what's obviously broken. Beacon is great but pricey. The other towns I don't know.

I own 2-2 families in newburgh with partners and am working on more.

I would check out newburgh. It's a little rough but I think it's got great potential and even if it doesn't turn around the cash flow is great.

@Megan S. I think @Account Closed made some excellent points. I would definitely visit Newburgh a few times (talk to locals) before getting serious, as it's VERY "rough around the edges" and you should know what you're getting yourself into, especially if planning on living there. Investing for cashflow would work, but living or expecting to see appreciation may not be as attractive. Depends on what you want. Cornwall,  Cold Spring and Beacon are all beautiful and great, and pricey/difficult to cashflow. Kingston is up and coming and my particular area of interest. It's a little far from the city, but it has a lot of city/brooklyn influence and vibe. Great place to live if you aren't commuting, and the numbers can work. 

@Account Closed I'm making my second trip up to Newburgh this weekend. I know it's rough - but it does seem like the cash flow is there as long as the rental market remains okay. And I like the idea of supporting the city by keeping property in good condition, being a good landlord, etc. Kingston is also interesting to me, but as you point out, not commutable from NYC, which is a bummer. Do you own property in Kingston? Seems like a place to do fix-n-flips, or do you BRRR there, too? Thanks again!

Hey, @Account Closed , how goes it?  I'm finally under contract on my 1031 and am starting to get serious on looking for replacement properties... Do tell, how is the progress going on your Newburgh places?  What kind of cash flow are you seeing, if the work is done yet?  

@Alan Brown way to go! Things are going well, way too long. I'm closing on my sale 7/14.  The house on Benkard I bought two months ago is great. Tenant started out saying they pay on the 15th every month. After I told them that I would serve an eviction notice in an hour or two if they could wait for it the whole thing went away. So far so good. The other place on Lutheran I've just started to work on...good new on Lutheran is that house is the last vacant not under renovation on the block. 3 of 6 houses on my side two months were vacant with no signs of life....except squatters and racoons. Now I'm the worst house on the block...not for long.

Working on another deal too. Good numbers. I have some stuff for you if your looking for buy and hold. I'm going to self manage...You?

PS I was doing some comps and I saw a house sold on Carson last year in the 200's. I think it was a flip.

@Megan S. My bad I forgot to give you numbers. This is an old spreadsheet I got off BP and editied a while ago. One of my places is in there.  I have a new spreadsheet but I have all my current deals on it.  Some aren't closed yet. Fingers crossed

The numbers on some houses are a bit off, and that's if it was true to start with.

On My own deals some info... My insurance is $500. I self manage. I do have a partner. It's bringing above 15% at the moment. That is a legal 2 family being rented as a 1 family. As a 2 family the numbers would be very different, but I would need to invest more to restore it to 2 family. Some of the below houses have closed and the listing price wasn't the sale price so that changes things quite a bit.

Btw I really agree with @Jared Gettinger
Two people have been shot and killed steps from my place in the last month. Maybe more though because my neighbor told me that it was 4 weeks in a row with a shooting. Who knows I've always been able to avoid getting shot.

Shawn Ackerman not sure about the others but I'm up there for appreciation I don't mind cash flow , but it's just a stipend for me and I usually reinvest, and have massive growth of capital. The only way I've learned to do that is by buying cheap in transitioning neighborhoods and self managing.

@James Canoy welcome to BP. Kingston is a pretty good market...seems like a lot going on up there. Have you listened to the podcasts? Lot of info in there.

What do folks think of the Village of Saugerties? I'm totally charmed by it and don't understand why it's not "hot" (aside from no major employers, and its small size, perhaps). Seems like real estate has been stagnant in Saugerties since 2004-ish. Anyone have thoughts? 

I live right up here and wonder the same. The place is very slowly creeping upward in price and with places like the diamond Mills's and the entire downtown area it may finally get over the hump. It's tantalizingly close to skiing and hiking but just a little too far. I think that's part of the issue. It doesn't have world class dining or amenities or proximity to "fun". Also there isn't a large "stylish" population in that town like you'd find in sections of Kingston. 

Hi Megan,

I live in Saugerties but own rental property in Kingston. I prefer Kingston because there is high demand for decent rentals so I can charge more for my Kingston rentals then I could for comparable place in Saugerties. I agree you can't beat Saugerties for charm and the small town feel - that's why I live there. But, I get a much better return in Kingston. However, you need to know Kingston pretty well. There are some streets that if you go a couple of blocks north or south, your in a whole other world. I could recommend a very good agent if your curious.

I haven't looked at inventory in Saugerties lately but a month or so ago there weren't alot of multi-families on the market. So, I started looking at Catskill and Hudson. I personally don't own anything there but rents seem comparable to Saugerties and multi-family prices seemed reasonable.

Originally posted by @Tom Ham :

Hi Megan,

I live in Saugerties but own rental property in Kingston. I prefer Kingston because there is high demand for decent rentals so I can charge more for my Kingston rentals then I could for comparable place in Saugerties. I agree you can't beat Saugerties for charm and the small town feel - that's why I live there. But, I get a much better return in Kingston. However, you need to know Kingston pretty well. There are some streets that if you go a couple of blocks north or south, your in a whole other world. I could recommend a very good agent if your curious.

I haven't looked at inventory in Saugerties lately but a month or so ago there weren't alot of multi-families on the market. So, I started looking at Catskill and Hudson. I personally don't own anything there but rents seem comparable to Saugerties and multi-family prices seemed reasonable.

I'm new to investing up here. I'm really trying to get into flipping first then multifamily. Is there an REI up here or are you interested in starting one?

Hi Megan,

The wife and I looked very seriously at Saugerties for a long time.

First the positives: Saugerties is geographically beautiful, and has a great downtown.

It is a little depressed in spots, and like much of New York, the properties tend to be quite a bit overpriced compared to rents, and once you factor in property taxes and other costs.

It could probably make a very nice place to live, and we almost pulled the trigger on a place there before deciding to move to New Hampshire instead.

So why didn't we buy in Saugerties? Because, in our experience, very few homes we might have been comfortable owning in that area currently make any sense from an investment standpoint.

You're just not likely going to be able to buy a place there right now and have it cashflow as a rental property or BRRR, or have it pencil out anywhere near being a profitable 70% ARV flip.

In our experience, the rents just aren't high enough, and the home prices just aren't low enough—even when they need a lot of work.

Some eventually sell for far below their ask and may be an OK deal then if you're savvy enough to make that happen. I recall one property that was originally priced at $150-$170k, and we penciled it out as being worth about $50k-$70k for a modest return.

It stayed on the market for more than a year before it eventually did sell for closer to the $50-$70k range to someone brave enough to wait and wait and then bid super low. So there is always a chance of finding something.


That said, there may be exceptions, and things may have changed from a couple years ago. But we ran the numbers on about a hundred places and came up pretty empty compared to where we wound up in New Hampshire, where properties penciled out much better.

(I have come to think that New Yorkers are a little delusional about their property values. As a life long New Yorker till now, I get to say that :)


That said, Saugerties is a lot better on all these fronts than say, Westchester, or some of the even more developed upper Hudson valley towns where home prices are completely divorced from rents, and only speculation (or habitation for your own personal enjoyment) is possible as a strategy.

If you're talking about investing, rather than speculating however, the game around that general region seems to be buying rental units in C or D properties in C or D neighborhoods and finding renters who can pay modest rates based on welfare payments.

That's not something we wanted to get involved in personally. Even then, I'm not sure the cashflow is tremendous in the region, though there are probably exceptions and some people probably do quite well.

Well, that's quite a bit of typing. But I hope that helps! Your experience may differ. And your luck as a speculator may be different than for a pragmatic math-loving investor. Good luck! Please let us know how it turns out.

@Megan S. , I have Kingston and Newburgh in my keyword list, and was just reading your post from 3 months ago and had seen my good friend @Account Closed 's wonderful brokerage (Kelli is the multi family specialist there) but could not find a danged thing that worked!  John turned me on to a really good one in Newburgh, but the seller (and her agents) jerked me around so much I've had to walk away... 

I think the end result is you have to find the off market stuff in NY... And I think that will really work, but we have to be determined and patient, don't we?  I am determined to take that route in Kingston and Saugerties (I think the family vibe in Saugerties is not to be overlooked, and maybe Single Family is the way to go there, because if someone has kids and they move in, they may be there a long time!)  

So maybe if my lazy butt has some success with off market stuff, I'll have too much to work with and will wholesale them (cheep) to you!!  

Cheers

alan