Newburgh NY vs Poughkeepsie NY ?

[Eder Aldana]

Hello everyone , I want to start looking for my second property In ither of this two cities. Does anyone have any insight as which city my be best for cash flow or what city provide the least risk. I want to but via seller finance or hard money. Thanks everyone

[Aaron Latos]

I'm in Newburgh: living here since late 2015, investing here since early 2016.  

I can't speak to Poughkeepsie: I'm very interested in it, and am starting to look there, but it's not my strong suit.  I will say that I know of a few experienced investors here in Newburgh who are starting to make their way up to Poughkeepsie.

On getting a deal for cash flow:
The "crazy deals" with incredible cash flow that got people talking about Newburgh a few years ago are quite scarce, and when they do hit the open market, they go really quick, often for all cash.  Things have slowed down in the late summer and early fall, but prices are still up.  There's a good inventory of properties on the market right now: people who paid top dollar last time the market was high and have been waiting for a chance to get their money out of their properties are doing so.  

That said, the higher prices have had the benefit of shaking loose a lot of what I like to call "good old boy" properties: things held in families for a couple of generations, or owned by older guard investors who have been somewhat out of touch with the market.  Some of these folks will do seller financing, and some of these deals are reasonable.  A lot of these are off market, word of mouth.  I'm working on a deal that falls into this category now.  

Especially regarding "good old boy" deals, I feel like Newburgh is a very "boots on the ground" city right now: you've either got to be here, pounding the pavement, or have a rockstar real estate agent doing that for you, shaking out deals.  I'm very lucky to have one I can recommend (PM me if interested).  

On risk:

Since I saw in another post that you may have a limited renovation budget, I do wanna say that in Newburgh, you've got to do your numbers very carefully, especially in terms of analyzing construction costs.  Due to a number of factors (urban renewal, slumlording, institutional racism, 2006), lots of properties that are hitting the market in this cycle have huge potential but are in rough shape.

Your best bet to avoid getting blindsided is to walk potential properties with a really, really good contractor who has worked extensively in the City of Newburgh, not just the town of Newburgh.  A huge percentage of buildings in the City are Victorian-era, with a whole different construction style, and the City's Building Codes Dept is strict about things that aren't enforced in many municipalities, including the town.