Would you consider selling a Queens property to invest elsewhere?

Question

Hello,As some background, I currently own a duplex in deep Queens, close to LI. I've owned the property for almost 5 years. The house could sell around 900-1 mil based on recent sales in the area and I have around 40% equity at this point. The mortgage interest is low at 3.5% and I receive a cash flow of ~$1000 a month. I handle the property management myself including repairs.I've been crunching numbers and a Cash Out Refinance would put it at 0 cash flow or negative so that is not an option. After getting into BP podcasts and reading the material, I started considering investing further out of the NYC/LI area. Would you guys consider selling my current duplex to fund multi families elsewhere or would it be better to hold on to this property and save up some capital over the next couple years to invest elsewhere?Looking at other markets (Albany, Connecticut, PA), I could optimistically own multiple properties and receive almost double the cash flow.

Tommy Cheng · Answer

Thanks Mohammed. I think I'll hold on for now as I rebuild my capital and look elsewhere to grow my portfolio. Its in the Bellerose area. I def overpaid for the Duplex when I bought it years back but its still churning out decent cash flow and I have decent tenants.

Mohammed Rahman · Answer

Good decision @Tommy Cheng - if you're getting a good return, nice cashflow, and have decent long-term tenants that aren't causing headaches... you didn't overpay :) It seems like a solid investment and I wouldn't recommend selling it now unless you absolutely need the liquidity. Wait a few years for the interest rates to come back down, and it'll be another seller's market. Feel free to reach out if more questions come up and good luck, thanks.

Drew Sygit · Answer

@Tommy Cheng are you living in the property 2 of last 5 years? If so, would definetly sell to take advantage of taxfree sale proceeds.Otherwise, you shouldn't sell until you are CONFIDENT you can reinvest elsewhere for better return. Read advice below:We think the Midwest is a GREAT place for OOS investors to consider! YES, we may be a little biased, but check out our blog here on BP comparing Detroit to other cities and Deep Dives on Metro Detroit cities & neighborhoods: https://www.biggerpockets.com/... 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 truly take the time to 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😊

Mohammed Rahman · Answer

Hey @Tommy Cheng - I'm an investor and realtor based in Queens. Which part of 'deep Queens' is your property? Asking since I've lived & worked on the edge of Queens & Nassau County for a while (grew up in Bayside). You have a decent amount of equity built up, but I would only recommend selling if you want to take your cash out and purchase larger/multiple properties.$1000/month cashflow in Queens is very good, and it's almost unheard of these days since property prices and rates have been increasing. I'm not too familiar with CT or PA, but I know Albany can give you more bang for your buck since property prices aren't as crazy as they are here. I'd focus back on your WHY. If you're unhappy with having just 1 duplex and are looking to expand quickly, then best course of action would be to sell and invest in lower cost areas. Although rates have been going up, some neighborhoods in NYC (particularly Queens) have been insulated from the price drops because they're in desirable areas of the city (good commute, taxes, school district, etc.) If you want to chat more, just DM me and we can take it from there thanks!