Newbie from Manhattan, New York City

[Vik C.]

Hi all,

I am a 30 year old guy from NYC looking to slowly transition from a salaried income to a real-estate income via rental properties. I am very well-versed in finance and financial modeling so this stuff is very fun for me to think about, but my only practical experience is buying my own apartment a couple of years ago. I'm sitting on about $150K of liquid assets at the moment, but could move some things around to get to $300K or so if I saw opportunities. My goal is to have $50,000 in annual rental income within 7 years. I think I can make more in the stock market, but I am very focused on early retirement and therefore am more interested in low-volatility income than "high-risk, high-returns". Goal is a consistent income within 7 years, not maximum assets after 40 years.

What I know best is the New York City rental market, so I was planning on getting started with single apartment units or single-family homes in the city and surrounding areas, including Connecticut which I also know well. 

I know that Manhattan and to a lesser extent the outer boroughs have very low cap rates compared to other locations in the US. This sucks, but it leaves me with a choice of a market I know with low returns or investing out-of-state and getting higher returns at higher risk. I would like to get a true 4-5% cap rate if possible (including taxes, maintenance, insurance, utilities, vacancy, etc.). 

What I would love to connect with some of you on is:

• Are there any good resources on small-scale real estate investment for income in NYC? It seems to a be beast unlike any other, particularly due to the predominance of co-op buildings.
• Is a 4-5% true cap rate attainable in NYC?
• What are average property manager fees in NYC, if I go that route? Is a 3-4% cap rate still possible using a management co?
• Which neighborhoods are good bets? From what I have researched, within Manhattan the UES seems best for price-to-rent ratio.

Thank you. I hope to be able to add value to the forum as I get settled in.

Cheers,

Vik