Any long island wholesalers here?

Question

I'm in long island for a few days, want to see how the market is for wholesaling good deals?  How much investor activity, etc. Just want to understand the market more.

Thanks in advance!

Corey Demuth · Answer

I don't know how easy it is to sell to another investor; I will say there are plenty of houses that need work out in LI, but from my personal perspective the sellers are still out on cloud 9 as far as their price expectations. The prices don't seem to have sank far enough considering 10% of New Yorkers are still unemployed, and businesses are starting to close down left and right, and nobody can get qualified for a loan for the prices these nuts are asking. It seems like the only people buying are older investors who are content to eek out a tiny profit since they can't put their money in CDs or savings accounts (because they aren't even beating inflation at current rates.)

And, the taxes on the properties don't seem to be reflecting the new low values of the houses; Homes that sold for 400-500k in 2004 and are now listed for 200k are still showing roughly the same taxes that they were charged back at the peak of the market... go figure. Oh and by the way, the taxes on a MF home in Long Island are usually 10-12k! So if you get a MF property, the rent one of the tenants pays basically just covers the taxes... Then the other tenant covers a little over your mortgage payment... but by the time you figure maintenance costs, insurance (which can be higher in LI for a number of reasons, flooding being the primary one) and occasional vacancy, well, there go your profits...

Anson Young · Answer

Corey, thanks for the insight!  Taxes is the main issue I'm hearing from multiple sources.

A couple more questions. Are some properties, even at list price, still a deal. 
And, if you did get a deal, would it be easy to sell to another investor?
How do remodeled fixed houses sell with nice finishes?  Pretty quickly or ?

Thanks again Corey!

Corey Demuth · Answer

well, for one thing there are plenty of investors buying deals at AND ABOVE list/retail prices. In Long Island you will bid on a ton of REOs and short sales, and you will never hear back and when you really investigate you find out your offer was dead right out of the gate because somebody else had already bid on top of you.

My friend just bought a house in suffolk and it was crazy when he was shopping around, he'd find all these properties he was interested in, check them out, 9/10 times he'd offer list price, and not even get a call back.

buy and hold is tough on LI because taxes are sky-freaking-high. You will be hard pressed to find even a small SFR with lower than 500$/month property taxes, and if you DO find one, it will be in the hood. It's really tough to create cash flow with the damn taxes being so high.

I have been trying to invest in Long Island for almost 2 years now, before I thought the only thing holding me back was lack of sufficient capital, but now that I have plenty of cash on hand to invest I still can't find a single damn deal. I'm still looking, but man is it discouraging... Every time I think I have a good one I realize either the taxes are going to eat up all the profits (this is typically the problem) or there is some kind of legal complication associated with renting or having a 2-family in the particular area/incorporated village that the house is located in.

Anson Young · Answer

What's the norm?  Buy and hold?  Fix and flip?

Competition rough here?  REOs not priced well?
Sorry for all the questions, just trying to understand the market.

Corey Demuth · Answer

in my experience, wholesaling is completely impractical in NYC and long island.