Is NY worth investing in 2021

[Chris Howell]

With everything going on with Covid and the mass exit of people from New York is upstate worth investing in anymore?

I’m an out of state investor with family roots in upstate. But I’m extremely cautious when looking for flips or buy and holds.

How has the market held up and I’m sure there are pockets that are better than others. For my buy and holds we look for C class and higher so the tenants are usually pretty good as far as jobs as everyone knows.

I just hear horror stories about loss rent and no values out of flips. But I love the area and I want to make sure I get the lay of the land before investing.

Thanks for the help!

[Brian Napierala]

I work as a private lender & over the last 12 mos, I"ve been dealing with a broker/ borrower combo in NY that purchased about 20+ properties in the Albany area.  I don't know if this is considered upstate, but all the properties cash flow and he has picked them up between 100-150k price range.  He is a buy & hold type of borrower and less flipper.  I always say 'buy what you like'.  Hope this helps

[Chris Howell]

@Brian Napierala thanks for the info that helps me gauge it. I’m going to travel up there in the next few weeks and try and get the lay of the land.

[Harry McNamara]

Hi Chris, 

I'm an agent in the Hudson Valley, and I'm not how far upstate you're talking, but we are still in a blistering hot market. The inventory here and in the Catskills is pretty low, which is the main struggle right now, but there are definitely deals and flips to be had, especially if you have connections here, or your own team to do the work. 

Flips with a bit of hipster flair are going for wild prices, or buy and hold as a short term rental. If you're more into multi-family, there's a serious shortage of rentals, so a fix and flip or BRRR in that department could also be a great strategy. There is no shortage of tenants.

Feel free to reach out if you'd like to discuss, I'm interested in brokering deals for these types of investments, or partnering on the investment side as well. 

[Nick Rutkowski]

@Chris Howell

Ithaca NY is always a good market with a decent ROI. You might want to take a look here. It's a smaller market but there's plenty of opportunity.

[Jonathan Greene]

Short answer, yes. Some of the best deals in NY are going to be in Syracuse, Albany, and Buffalo, but tough weather. As others have mentioned, everywhere around the Catskills, Hudson, Beacon are all exploding with second homes and move-outs from the city. There is still room to grow in these markets, especially for STR which are all booked all the time since the pandemic.

[Matthew Irish-Jones]

@Chris Howell I have been investing in Buffalo NY for 10 years and own over 40 units.  Its been a great market for cash flow, and recently has come with appreciation over the last decade.   I am also running a property management company so we have a ton of data on returns.  

Our vacancy rate over our entire portfolio of listed units is 5%.  The worst month of Covid our collection rate was at 78%.  We are now at 93% with the 7% being holdover tenants we have not been able to evict yet.

Cash on cash returns are 2-5% in A class areas 6-10% in B class areas 10-15% in C class and 15%+ in D class.  There are opportunities to snag a great deal every once in a while, or do a value add turnover to increase rent and increase returns if you have a strategy and can spend some money up front.

For the flipping business, we see very little properties available off of the MLS. Most flip opportunities are REO, Wholesale from another broker, auction, or desperate seller... That's what we are seeing in the Buffalo NY market in a nutshell.

[Alexander Szikla]

I'm not familiar with upstate, but I think New York City would make a great investment right now. Especially as the FHA recently increased loan limits. A house hack via FHA can get a 4 unit and a basement, which would be ideal and create major cash flow and equity creation, plus you can not worry about a property manager and boost your yield.

Personally, I am very bullish on New York and NYC itself. Sure it suffered due to COVID, but rents are already higher than they were pre pandemic. 

Cap rates remain attractive in many of the outer boroughs while rates (temporarily) remain low - so there has really never been a better time "spread" wise.

If you are looking for yield in the short run, NYC may not be for you. However, it is certainly the most attractive it has been in years from a cash flow perspective. If you are seeking out asset accumulation and equity appreciation over the long term then there are certainly fortunes to be made. And there is still plenty of cash flow opportunities in the outer boroughs if you buy right!