New Investor in the Buffalo, NY area

[Derek Browning]

Hello BP,

My name is Derek and I've recently moved back to the Buffalo, NY (family is from here) area after spending the past decade across the border in Toronto.

I'm in the process of getting my 1st property, pre-approval for my Financials are set, and I will be looking at properties starting this Sunday (yes, sacrificing a football Sunday, so you know it's serious! Ha) 

This is such a knowledgeable community and a priceless resource that any insights, or possible partnerships would be more than welcomed...

My current plan is to purchase a 2 or 3 unit (which I will occupy as well) and I'm currently looking in the 14216 North Buffalo, North Park, Kenmore, Amherst, Tonawanda areas. Elmwood village is great but a little pricey for me at the moment, thinking about West Buffalo as well close to Richmond but not as familiar with the areas enough to feel confident (I know it's going into a Renaissance mode but like any city, has its good and bad pockets)

For 2016 I plan to buy at least 2 more properties, ideally 1 as a flip and 1 SFH rental, then continue to multiply my output moving forward.

Any suggestions, insight, tips, or contacts would be much appreciated, may you all have a wonderful and prosperous day ahead of you.

Best Regards,

Derek Browning

[Sam Tato]

Hi Derek, welcome! I'm also a new investor and I had some recent insight that I wish I knew when I bought my first property a year ago.  I'm not sure what type of financing you are planning to use but I'll tell you what happened with me.  I used a 5% down conventional loan to purchase a double in the 14216 Buffalo area.  The only reason I was able to get 5% down was because I was going to be living there and there are special terms and rates for owner occupied.  I'm now looking for a second property and I was hoping to move into the new one in order to secure the same type of financing.  What I have come to find out is that banks will almost always see the second multi-unit property as an investment property, which requires 25% down, and will not acknowledge owner occupied status unless there is a very good reason for you moving (i.e. closer to work for a shorter commute, moving to a single family from a double, more space for a spouse and kids, etc.) Since I am looking in the same area I have no credible reason to obtain an owner occupied loan and will need to use investment property financing.  

I work in the city, so in hindsight I could have bought a property in the suburbs and then bought a double closer to the city as my second property using owner occupied financing and use the reason that I'm moving much closer to work which saves time and money (gas).  But, since I didn't do that I will now need to use a 25% down loan for my next property and I am looking for private money much earlier than anticipated!  Plans change! 

Hopefully this will save you from the misconception I had!