Buying a duplex in Syracuse NY

[Fernando Z.]

Hi, fellow investors,

I recently got a job offer that will make me move to Syracuse NY (I'm currently in New Mexico). I was really considering buying a duplex there, which would be my first property, but as I browse through the market it really gives me bad vibes for all multi-family properties available. They're either dilapidated, crooked, bad craftsmanship, and that's from simply looking at the pictures! I visited the town twice as I was interviewing for the position and didn't have much opportunity to see properties but I looked around some of the neighborhoods that had multifamily homes advertised and they are actually THAT UGLY. Plus, a lot of random, shady (seemingly unemployed) people on the streets, even though it was pretty cold (like it was 25F and windy outside). I looked mostly around the university, (Northeast, Lincoln hill, and also south of Colvin St. east of the I81). I didn't go to the nice neighborhoods because there's no multifamily houses advertised there.

I honestly am really divided. Most duplexes seem to have potential to cash flow positive or zero even with only one unit rented (i.e., I live in one of the units of the duplex). This would present a great opportunity to "househack", but when I look at the neighborhoods it looks like this city has multi-family homes only at really bad neighborhoods. I also read that a large fraction of tenants are on welfare and struggle to pay rent. 

This really gives me the feeling I should NOT buy such a property because 

(1) I would have to live in a bad neighborhood, 

(2) I would have to eventually evict somebody, 

(3) the local market is declining but now houses are "expensive" because of all the stimulus 

(4) it looks like NY state is not very landlord-friendly. 

As a single guy, I don't mind living in a more simple place with a single bedroom, but if there's drug dealing and all that crap I really don't want anything with it.

Anyways, anyone from the town who owns property there has any experiences to share? My gut is saying "don't buy, even though cashflow looks good". Maybe you can also give me your thoughts on whether this gut feeling is real or if it is me just being too afraid to take the first step.

Thanks, guys! I know it was a long post, but I feel this choice may shape the next decade of my life and it is somewhat terrifying!

[Michael Smythe]

@Fernando Z.

Your biggest question shouldn't be WHERE to invest, but HOW you will invest!

Many OOS investors set themselves up for failure because they don't invest the time to ACTUALLY understand:

1) The Class of the NEIGHBORHOOD they are buying in - which is relative to the overall area.

2) The Class of the PROPERTY they are buying - which is relative to the overall area.

3) The Class of the TENANT POOL the Neighborhood & Property will attract - which is relative to the overall area.

4) The Class of the CONTRACTORS that will work on their Property, given the Neighborhood location - which is relative to the overall area.

5) The Class of the PROPERTY MANAGEMENT COMPANIES (PMC) that will manage their Property, given the Neighborhood location and the Tenants it will attract - which is relative to the overall area.

6) That a Class X NEIGHBORHOOD will have mostly Class X PROPERTIES, which will only attract Class X TENANTS, CONTRACTORS AND PMCs and deliver Class X RESULTS.

7) That OOS property Class rankings are often different than the Class ranking of the local market they live.

8) Class A is relatively easy to manage, can even be DIY remote managed from another state. Can usually allot 5-10% vacancy factor and same for maintenance.

9) Class B usually also okay, but needs more attention from owner and/or PMC. Vacancy and maintenance factors should be higher than for Class A as homes will be older, have more deferred maintenance and tenants will be harder on them.

10) Class C can be relatively successful with a great PMC (do NOT hire the cheapest!), but very difficult to DIY remote manage. Vacancy and maintenance factors should be higher than for Class A or B. Homes will have even more deferred maintenance and tenants will be even harder on them.

11) Class D pretty much requires an OWNER to be on location and at the property 3-4 times/week. Most quality PMCs will not manage these properties as they understand most owners won’t pay them enough for the time required and even then it’s too difficult successfully manage them.
***Only exception is if an owner has plan & funds to reposition Class D to Class C or higher.

https://www.biggerpockets.com/forums/776/topics/960183-what-they-dont-tell-you-about-cheap-rental-properties?highlight_post=5562799&page=3#p5562799

Also, SERIOUSLY consider - do you really have the time to be a DIY landlord or should you hire a PMC?

Good luck with whatever you decide😊