From Toronto, looking to invest in Buffalo & Rochester area.

[Somesh Mukherjee]

Hello all, I am from Toronto, Ontario and own a few properties locally. I am looking to diversify and start with by buying a small apartment building in the upstate NY area (a few hours drive for me). 

From my research so far, Buffalo and Rochester rental markets seem strong at the moment. I was looking for some advice (viable target area, financing options and credible PM/realtor contacts) from the experts here though especially if you are in a similar boat as mine (reside in Canada/Ontario area and invest in US).

Thanks much, in advance!

[Michal Liviatan Carpenter]

Hi @Somesh 

I am a US lender based in Toronto, feel free to reach out with any question regarding financing/US entity formation or accounting services. I also have some partners/realtors working in Rochester and specifically working with foreign national investors.

Good luck! 

[Preston Garcia]

Hey,

I'm an agent over here in Rochester and can definitely help you out with both lenders and PML's. I would like to jump on a call and discuss those and target areas over here. I also have a couple clients in Canada and I can give you their contact info so you can talk to them. Feel free to reach out at anytime!

[Somesh Mukherjee]

Quote from @Michal Liviatan Carpenter:

Hi @Somesh 

I am a US lender based in Toronto, feel free to reach out with any question regarding financing/US entity formation or accounting services. I also have some partners/realtors working in Rochester and specifically working with foreign national investors.

Good luck! 

Thanks @Michal Liviatan Carpenter, I'd definitely reach out once I finalize the target market. Thanks again! 

[Somesh Mukherjee]

Quote from @Preston Garcia:

Hey,

I'm an agent over here in Rochester and can definitely help you out with both lenders and PML's. I would like to jump on a call and discuss those and target areas over here. I also have a couple clients in Canada and I can give you their contact info so you can talk to them. Feel free to reach out at anytime!

Thanks @Preston Garcia, I'll hit you up if I shortlist Rochester.

[Preston Garcia]

You’re welcome, best of luck either way!

[Kiernan LaFaver]

Hey Somesh! 
I know it's a little outside of the two areas you gave, but I'm in Syracuse NY and there is lots of opportunity for any type of investing if you happen to be looking out this way…BRRRR, buy and hold, fix and flip you name it. I have several lenders that I like to work with as well. Please let me know if you have any interest in this area and I'd be happy to discuss with you! Good luck!

[Peter W.]

I’m mostly a new investor in the Rochester area (I own one property). I will give you some of my highlights.

People in Texas complain about their property taxes at 3% ours are about 4.5%.
New York in general and Monroe county specifically are very tenant friendly.

Depending  on the town, the code inspectors/police can be quite anal.

Since Covid and the 2020 protests we’ve seen an increase in crime in the city and therefore weakening demand in the city proper and increasing demand for the suburbs.

Industry is well diversified—University of Rochester (medicine) L3Harris (defense) xerox (IT) and paychex (software/hr)) and relatively recession proof.

Population growth is low and therefore appreciation (except the past 4 years) has been moderate as well.

There aren’t many builders in the area so supply is relatively fixed.

Home (and rent) prices are both affordable with homes typically being less than 1/3 median household income and rent being similarly affordable.

For single family homes at 8% rent will cover piti with about 100$ to spare in the A areas. In b areas it's about 75% of rent to cover PITI. In the c areas in the city you are at closer to 50-60% or rent covering piti. This assumes ~8% interest rates.

Interest rates in New York tend to be 25-50 points higher than the national average although maybe I suck at finding good mortgage brokers.

[Matthew Irish-Jones]

Quote from @Somesh Mukherjee:

Hello all, I am from Toronto, Ontario and own a few properties locally. I am looking to diversify and start with by buying a small apartment building in the upstate NY area (a few hours drive for me). 

From my research so far, Buffalo and Rochester rental markets seem strong at the moment. I was looking for some advice (viable target area, financing options and credible PM/realtor contacts) from the experts here though especially if you are in a similar boat as mine (reside in Canada/Ontario area and invest in US).

Thanks much, in advance!

 Most Canadian clients we work with use TD bank because they offer US mortgages for Canadian investors. 

What do you consider a small apartment building 4 units or 20 units?  Buffalo is a good city to invest in, but you really need to understand each micro market.  If I am buying a larger apartment building I am going for a low risk investment.  

I have seen one bad tenant crush an entire 4 unit building with bed bugs, non payment of rent, and drive good paying tenants out of the building.

The location is the # 1 priority, after that asset condition is really important.  I would prefer the risk of a renovation to upgrade a building as opposed to location risk with a high risk tenant pool. 

[Somesh Mukherjee]

Quote from @Matthew Irish-Jones:

Quote from @Somesh Mukherjee:

Hello all, I am from Toronto, Ontario and own a few properties locally. I am looking to diversify and start with by buying a small apartment building in the upstate NY area (a few hours drive for me). 

From my research so far, Buffalo and Rochester rental markets seem strong at the moment. I was looking for some advice (viable target area, financing options and credible PM/realtor contacts) from the experts here though especially if you are in a similar boat as mine (reside in Canada/Ontario area and invest in US).

Thanks much, in advance!

 Most Canadian clients we work with use TD bank because they offer US mortgages for Canadian investors. 

What do you consider a small apartment building 4 units or 20 units?  Buffalo is a good city to invest in, but you really need to understand each micro market.  If I am buying a larger apartment building I am going for a low risk investment.  

I have seen one bad tenant crush an entire 4 unit building with bed bugs, non payment of rent, and drive good paying tenants out of the building.

The location is the # 1 priority, after that asset condition is really important.  I would prefer the risk of a renovation to upgrade a building as opposed to location risk with a high risk tenant pool. 

Thanks @Matthew Irish-Jones, great advice! I am looking at a 4-6unit to start with. Still in the process of researching Buffalo neighborhoods to find a viable target area.

[Matthew Irish-Jones]

Quote from @Somesh Mukherjee:

Quote from @Matthew Irish-Jones:

Quote from @Somesh Mukherjee:

Hello all, I am from Toronto, Ontario and own a few properties locally. I am looking to diversify and start with by buying a small apartment building in the upstate NY area (a few hours drive for me). 

From my research so far, Buffalo and Rochester rental markets seem strong at the moment. I was looking for some advice (viable target area, financing options and credible PM/realtor contacts) from the experts here though especially if you are in a similar boat as mine (reside in Canada/Ontario area and invest in US).

Thanks much, in advance!

 Most Canadian clients we work with use TD bank because they offer US mortgages for Canadian investors. 

What do you consider a small apartment building 4 units or 20 units?  Buffalo is a good city to invest in, but you really need to understand each micro market.  If I am buying a larger apartment building I am going for a low risk investment.  

I have seen one bad tenant crush an entire 4 unit building with bed bugs, non payment of rent, and drive good paying tenants out of the building.

The location is the # 1 priority, after that asset condition is really important.  I would prefer the risk of a renovation to upgrade a building as opposed to location risk with a high risk tenant pool. 

Thanks @Matthew Irish-Jones, great advice! I am looking at a 4-6unit to start with. Still in the process of researching Buffalo neighborhoods to find a viable target area.

 You are probably going to need to find a B class area to make the numbers work. 

[Ty M.]

Somesh I have one property in Toronto. It has been challenging to acquire more properties but do you have any advice of areas you think I should focus on in Toronto or general acquisition strategies that work right now as an investor in Toronto or GTA . Also are you no longer going to be investing in this market ?

[Somesh Mukherjee]

Quote from @Ty M.:

Somesh I have one property in Toronto. It has been challenging to acquire more properties but do you have any advice of areas you think I should focus on in Toronto or general acquisition strategies that work right now as an investor in Toronto or GTA . Also are you no longer going to be investing in this market ?

Hi Titus, I have decided to pause investing in the GTA market for a few years atleast. Inspite of the recent correction, as the house prices currently stand and with inflated interest rates plus steeply rising property taxes (year over year municipalities have increased taxes and utilities 7-15% to make up for covid deficits); cash flow is virtually impossible even if you buy in the GTA outskirts like Oshawa, etc. The extreme tenant friendly laws in Ontario and increasing regulations for short-term rentals are additional reasons why I do not find investing in GTA no longer viable. Hope this helps!

[Ty M.]

Quote from @Somesh Mukherjee:

Quote from @Ty M.:

Somesh I have one property in Toronto. It has been challenging to acquire more properties but do you have any advice of areas you think I should focus on in Toronto or general acquisition strategies that work right now as an investor in Toronto or GTA . Also are you no longer going to be investing in this market ?

Hi Titus, I have decided to pause investing in the GTA market for a few years atleast. Inspite of the recent correction, as the house prices currently stand and with inflated interest rates plus steeply rising property taxes (year over year municipalities have increased taxes and utilities 7-15% to make up for covid deficits); cash flow is virtually impossible even if you buy in the GTA outskirts like Oshawa, etc. The extreme tenant friendly laws in Ontario and increasing regulations for short-term rentals are additional reasons why I do not find investing in GTA no longer viable. Hope this helps!

[Ty M.]

I have the same sentiments. Have you looked anywhere outside Ontario? 

[Martin Grizzanti]

I invest full time in Rochester--great market for investors

[Chelsea Finnerty]

Welcome to Rochester, NY! I am an agent here if you ever need a second opinion :) Good luck!

[Colin McMahon]

Hi @Somesh Mukherjee

Fellow lender here - Not sure where you are in the process but as Matthew said - location is top priority, not just in terms of the tenant pool but depending on the loan program you're seeking (say DSCR), the comps in the area can also impact your appraisal and what rate and term you'll qualify for. I would suggest exploring outside of your local bank as well and exploring U.S-based lenders that work with foreign nationals and compare as banks tend to be more conservative and therefore more limited especially once you venture beyond a single-family household or condo.

Feel free to reach out for more insight on the lending process in the U.S. as it can help guide the property you ultimately invest in!

[Stephanie Bell]

Hi! I am also a Torontonian and have just gotten started with investing in Buffalo. Closed on my first property today, in fact! I went with RBC's lending program for Canadian investors in the US. I worked with an agent from Irish Jones (see @Matthew Irish-Jones) and had a positive experience. Enjoy the process!

[Matthew Irish-Jones]

Quote from @Stephanie Bell:

Hi! I am also a Torontonian and have just gotten started with investing in Buffalo. Closed on my first property today, in fact! I went with RBC's lending program for Canadian investors in the US. I worked with an agent from Irish Jones (see @Matthew Irish-Jones) and had a positive experience. Enjoy the process!

 Thank you Stephanie, glad you had a positive experience.  We appreciate the opportunity!