All Forum Posts by: Tony D'Anzica.

Hello Rob,

I can only tell you about Syracuse. I work closely with investors from all over the country that are trying to work within the same budget that you have. Let me know when you plan to be in Syracuse. I would be very happy to assist you. I am a real estate attorney and a licensed real estate broker, but I now run my own property management firm in Syracuse.

Syracuse has some great investment opportunities. Most brokers have very little understanding of what investors really need (e.g., return on investment, maximizing cashflow), nor do they they thoroughly understand the rental market, which is one of the most important things every investor must understand before investing in any real estate. Consequently, many investors end up with properties with amazing cap rates (they just have a very hard time collecting any rent whatsoever).

By the way, if you are considering other markets, do a thorough comparative analysis of them. I think that you will find that the Syracuse market has much to offer.

I would love to give you a tour of Syracuse if you are in the neighborhood. Looking forward to hearing from you and good luck!

Tony L. D'Anzica, Esq.
DynaMax Realty, Inc.
Property Manager and Realtor

hi hustler,
i think you've got great plans. my regret is that i didn't start investing in real estate right after i got out of college. instead, i spent several years working at a great paying job representing landlords as their attorney (and dreaming about being a landlord myself) and never actually taking the leap until years after i should have. i've since quit that job, i now spend my full time investing and i own my own real estate brokerage and property management firm. So my advice....follow through with your plans! Buying the 4-unit is a great investment.

One tip, check out the listings for HUD homes in your area (http://www.hud.gov/homes/index.cfm). These are properties (many of which can only be sold to individuals who intend to owner occupy) that can be bought at SUBSTANTIAL discount from market prices (essentially, they are foreclosures from gov't backed loans). You may find a multi-family on their listings, but you do have to bid for the property and you may not win the bid, but keep trying.

Additionally, you've got the right mentality - think long term. that's definitely playing it safe. Never buy a property based entirely on price trends (people who bet on appreciation lost their shirts in places like florida). Always do your research. Know the area you are buying in. If you're buying a 3-bedroom house that you want to rent out, spend time looking at 3-bedroom rentals in that area so you know exactly what you can get in rent. Factor in expected costs (i.e., 5% vacancy rate; 5% maintenance costs, property taxes, insurance, utilities, property management fees, advertising). My personal belief, if you're buying long-term, stay away from mortgages with adjustable rates.

Your cashflow may not be much in the beginning, but over time, as rents increase, you can start seeing some very good returns even after several years. Just do the math first and never buy a property that doesn't cashflow. Also, always get a property inspector to look at the property for you. Avoid buying properties that require major structural work as they can be money pits - unless you plan to go into the rehabbing business and you know what you're doing. MAke sure you interview property managers. Don't hire some mom & pop operation that offers a cheap fee but they can't deliver on service because they have more properties they can handle.

One other thing about LLCs or corporations - these are EASY to form, BUT banks are very weary about giving mortgages to new companies. Many banks don't unless you're buying a bigger property. It will be a LOT easier for you to buy in your individual capacity even though that will create limitations once you've bought a certain number of properties - banks are hesitant to give too many mortgages to one person. Also remember this rule - always make sure you keep your credit score high!

All in all, 100 properties in your lifetime?? Don't be so modest. If you do it right, you can reach that goal in the next 5 years if you choose to. Hope this was useful. Good luck!!!

Hi Roc,
I'm a real estate investor, attorney and property in NY. I have my own property management company and we do most of our work in Syracuse, but I'm familiar with other upstate NY areas.

Most property management companies in upstate NY charge anywhere from 10% to as high as 15% of rent collected. The average in upstate is about 11-12%. My company charges 10-11% (depending on how labor intensive we believe the property will be).

I've seen some companies charge a flat fee per apartment per month, but it's rare and i would not hire a company that does that since it gives them no incentive to keep properties insured. Be careful with unlicensed mom & pop property managers who seem "cheap" and take on more than they can handle - a lot ends up falling through the cracks and you waste even more money in landlord-tenant court and in repairs due to neglected maintenance. Hope that helps!

Foreigners can get the same loans as Americans - just expect larger downpayment requirements and slightly higher interest rate.

As for using a corporation to buy/own real estate, they are easy to set up and can certainly be used to buy property. However, it would be very difficult to get bank financing for any purchase of real estate if the corporation is less than 2 years old, and/or has little credit history or assets, or is intending to purchase any residential properties that have less than 5 units....

All in all, with lower real estate prices, lower interest rates and a weak dollar there are some GREAT opportunities for foreigners to invest in US real estate...

There are no special real estate loans for foreign nationals in NY per se. Foreigners are eligible for the SAME loans as American citizens/residents. The only difference is:

1) expect banks to require higher downpayments (30-40%, instead of 10-20%)

2) expect to pay a slightly higher interest rate, maybe about 1% higher

You will still need a good credit history and favorable debt-income ration.

Hope this helps!

One commentator made a very good point - it depends on where in the US you invest in. We spent years researching and visiting markets throughout the east coast before we decided to settle in Syracuse. We've been successful in Syracuse, NY so far and we are very optimistic about the opportunities here. Bucking the national trend, Syracuse has shown modest, consistent growth and economic forecasts indicate that this trend will continue in 2008-2009. Here are some recent encouraging statistics:

* In January 2008, the National Association of Realtors named Syracuse as one of the four healthiest housing markets in the nation.

* Home sales in greater Syracuse increased 11% in December 2007, compared with December 2006, according to the National Association of Realtors. That contrasts with a 22% decline in sales nationwide.

* The New York State Association of Realtors reports that the median price of homes sold in Onondaga County rose 4.8% to $131,000 between 2006 and 2007.

* Fortune Magazine ranks Syracuse #5 on its list of cities where home values are expected to rise, with projected increases of 3.6% in 2008.

* CNN recently ranked Syracuse #99 out of 100 cities in terms of foreclosure rates.

* According to the Housing Cycle Barometer, Syracuse ranks as one of the least overpriced cities in the nation, coming in at #118 in a list of 189 cities.

Hope this info helps you!

If you can take advantage of the historically weak dollar, you can find some GREAT opportunities if you choose the right property and invest with the right mind-set. I recently wrote a blog for a newsletter that was just released about opportunities in this market. Since I think it goes directly to your question, I'll post it here for your consideration...

For years, many investors were fortunate to ride a seemingly unstoppable wave of price appreciation, fueled by a stagnant stock market, unscrupulous lending practices and low interest rates. Since the price appreciation was not supported by sound fundamentals the era of "buy, hold, and pray" came to a crashing end. However, high foreclosure rates, increased housing inventory and declining prices may represent a once-in-a-lifetime opportunity for investors to make intelligent long term acquisitions. Here are a few points to consider:

* Although banks are tightening lending criteria, if you have a strong credit history and favorable debt-income ratio, you will still be able to obtain an attractive loan at historically low interest rates.

* With increased foreclosures and more restrictive lending policies preventing many potential homeowners from purchasing a home, rental demand is expected to increase. According to Nicholas Retsinas of Harvard University, “…If you have high demand and a restrained supply the only result is higher prices.

In the near term, you will also see rents go up.” As the price of real estate decreases and rents inch upward, the return on your investment increases.

* Warren Buffett recently compared money managers who promise double-digit returns to the queen in “Alice in Wonderland.” Instead of relying on appreciation, today’s investors must analyze the economic fundamentals of every acquisition and pursue every deal with the right mentality: 1) take a long-term investment approach; and 2) adjust your investment return expectations to reflect more sensible market conditions. Although you may never achieve the returns gained (and lost) over the past decade, an investment in real estate uniquely offers financial benefits that most other investments do not, such as long term tax depreciation and the ability to significantly leverage your money.

The current real estate environment offers smart investors enormous opportunities: decreasing prices; increasing rents; historically low interest rates. By adopting a long-term perspective in your investment philosophy and modifying your expectations to reflect a more sober economic reality, the current real estate market may offer some of the best investment opportunities yet.

Tony D'Anzica, JD
Dynamx Realty, Inc.