Investment Info:

Small multi-family (2-4 units) buy & hold investment in Poughkeepsie.

Purchase price: $80,000
Cash invested: $72,000

Top and bottom duplex with 2,000 sq ft. Each unit has 3 BR plus bonus room 1 BA and rents for $1400.

What made you interested in investing in this type of deal?

The rent in the city of Poughkeepsie is higher compared to other towns in upstate NY. Total monthly rent is $2800 which made this a 2% deal after the rehab.

How did you find this deal and how did you negotiate it?

I found this deal on the Bigger Pockets Marketplace. I called the owner, walked through the property and negotiated over the phone. He originally asked for 85k and I offered 78k. We landed at 80k.

How did you finance this deal?

I used a broker I met on the Bigger Pockets site who helped me find a hard money lender at 11.5% and 2.5 points. This wasn't bad for a newbie.

How did you add value to the deal?

I updated electrical in the entire house, added new kitchens and appliances, did maintenance on the existing furnace and cleaned up curb appeal. Some surprises were the cost of replacing the deck in the rear, replacing more windows than expected and having to replace the entire back wall of the house due to a leak.

What was the outcome?

My rehab costs doubled but thankfully I had a few backup plans for financing the rest of the project (401k loan and credit cards). The house appraised for much more than expected (210k) and I was able to do a cash out refi and pay back the over budget money I borrowed (32k).

Lessons learned? Challenges?

Lots! The appraisal came back at 70k and I should've renegotiated but I was scared to lose the deal. Ended up hurting me at closing when my interest/points went up and I had to bring 10k more. I should have walked the property with a contractor before submitting an offer. While in contract, I should have gotten AT LEAST 3 bids. I didn't know any contractors in the area and ended up using my property manager which wasn't the best experience because we went over schedule due to other priorities.

@Maritza Soto great job, for the first deal you did great and I'm sure your next one will be much better. Thank you to share your experience.

@Maritza Soto Congrats! I am considering this area too for my first property as I am also in NYC. Knowing what you know now, do you still think Poughkeepsie still has opportunities? Would you recommend a multi or SFH? I was looking closer the Metro North line but not sure if it's already too saturated.

Just missed it. I just wholesaled 2 deals.  One on cannon and one on n Hamilton 

@Maritza Soto that's awesome!  Who's your property manager?  I own a property in Hyde Park, NY, not too far from there.

I hold a meet up at Jason Patrick’s on 44 at 6 the 2nd weds if you want to join us it is free. 

@Maritza Soto is crushing it!!! She is on her way to bring podcast worthy once she finishes this next deal! Keep up the great work! Metro north proximity is still key for the near future! 

@Maritza Soto  awesome deal, congrats. I am focusing on Pok area and have a few investments there.  What’s the address of your property, I’d love to check it out. 

@cindy Truong   for your questions: MNR vicinity is good but all of Poughkeepsie is getting a boost right now so there’s opportunity all over (don’t get me wrong though, there are still some really bad areas you should steer clear of).  The Arlington Town center is another hot area to look around, and the city is really pumping it up. 

It's def getting saturated with a ton more interest coming in the city which is driving up prices a bit but there's still a lot of meat out there if you put in the efffort. And some of the big builders are grabbing up big distressed building and lots in crappy areas and revitalizing them. So I'd suggest doing your homework on who's buying/bought what and try to grab some of the smaller stuff near by that they aren't going to be interested in. Then you get a deal on something no one wants and 18 months later it's a hot zone with complete new buildings that drive up your value - I know easy said than done but you get the point. As for SFR vs Multi fam, I only specialize in multi so can't offer too much insight. However the Vassar hospital project is said to be bringing in 2500-3k new jobs when done so I think both are going to be lucrative. Good luck!

@Eric Hrlbock DM the info to your meetup. I’ll try to check out one of the upcoming ones if I can make it up there. 

Stephen

This month will be held at heritage on rt 9

6 pm feb 12

Mayor Matt Alexander of wappengiers 

Hope to see you then

@Ilcar Rosario Thanks! I appreciate your positive feedback.

@Cindy Truong Poughkeepsie has become a hot market for investors but keep looking. There are deals everywhere. I would suggest you connect with wholesalers like @Eric Hrlbock and go to meetups in NYC or in Poughkeepsie if you can make the trip. I believe multi-family will give you more cashflow because they are still in the $200k - 250k range. However, single family homes may be more desirable to families especially if they're on Section 8 or any other assistance programs. Therefore, they would be easier to rent and less in utility/maintenance costs. I'm looking into possibly investing single family for my next deal. @Stephen Loguidice is right, there are more jobs coming to the area thanks to the Vassar hospital expansion so hopefully that would bring better quality tenants, stimulate the economy there and increase property value. Keep us posted on your journey to buying your first investment!

@Eric Hrlbock please add me to your buyers list. I hope to make it to your meetup soon.

@Scott Wolf I'll send you a private message.

@Adam Cherko it's been great working with you! So glad I met you at a Bigger Pockets meetup.

@Stephen Loguidice Thanks! I'll DM you. The rental potential in Poughkeepsie is great and I'm looking forward to growing my portfolio there.

@Cindy Truong I’ve seen you’ve been looking to Poughkeepsie a lot. You’ve been active on several of the posts I’ve been following. Have you been to any of the meet ups here in Poughkeepsie, do a drive through? This city has so much potential but has it’s rough edges. I literally walked to the train station every day and it was only a 90min train ride into Grand Central. It’s definitely worth looking into. Market rents is about $1.5 per square foot to do a quick calculation to see if a property will bring in cash flow, but only start there and definitely dive in deeper in your numbers as you narrow down your your list, as location plays a key part in the rent. The difference between here and the city is that you literally move into a new community every block where as in the city each community is a few and more blocks deep. Transitions here are crazy so you definitely need boots on ground.

Hi all, I purchased a property a few months back in Poughkeepsie on Winnikiee ave.  Finishing up the rehab in hopefully the next few months and wanted to start getting into contact with a few property managers.  Does anyone know of any in the area? Thanks!

This is an excellent deal. I am jealous!!!  What's next? 

@Philip Roedig congrats on your new property in Poughkeepsie! Did you end up finding a property manager? I may be looking to replace mine so if you have any recommendations, please let me know.

@Moises R Cosme I'm looking into airbnb properties.

sorry maritza that I never reached out. 
I have a duplex on park place to wholesale it’s a fixer in po 

I have another duplex on balding that is turn key not exactly wholesale but needs nothing 3/1 in each. 
2 yr roof 5 yr heating 7 yr hvac. It’s value is 260-275  Cash around 220’s

I have 2 other turn keys  Harrison duplex 

And a baker duplex  

I own those so a loan can be taken