Newbie in New York - Long Distance / BRRRR Focused

[Erik Berg]

Hi everyone my name is Erik and I am a newbie in New York. I am currently house hacking in the Westchester area and have caught the real estate investing bug!

I am interested in using Long Distance Real Estate Investing with the BRRRR method. The prices in New York coupled with uncertainty and population exodus are what make me interested in Long Distance investing.

Currently, I am saving capital and evaluating markets trying to find where I will get the best mixture of appreciation and cash flow. I expect to have enough cash in 7 months. While I expect to use Hard Money for my first BRRRR I want to have enough cash to buy it outright should it go completely sideways.

I have been lurking on this forum, site, and podcast for a long time... lots of positivity here. Glad to finally introduce myself.

 

[Alexander Szikla]

Why focus on out of state when you can rinse and repeat locally. The suburbs have seen an influx and I'm sure your property will appraise well. NYC though is on sale!

Definitely house hack via FHA in NYC right now. If you can get a 4 unit and a basement, that would be ideal and create major cash flow and equity creation, plus you can not worry about a property manager and boost your yield.

Personally, I am very bullish on New York and NYC itself. Sure it suffered due to COVID, but you want to buy when there is distress. I think all the folks who moved away are already getting bored and already coming back. Plus, the vaccine is getting rolled out which will curb the spread tremendously. Now is the time to buy.

Cap rates came all the way down to 3% (or below!) during the "boom" times but COVID has loosened everything up and now 5% can be had in Manhattan, 6%-7% in Brooklyn and even 8% in the Bronx. Nationwide rates hit a low of 2.7% - so there has really never been a better time "spread" wise.

Long term, I think NYC will come back as it always has time and time again. I am also a great believer in investing when there is distress and deploying capital when you can.

If you are looking for yield in the short run, Manhattan may not be for you. However, it is certainly the most attractive it has been in years from a cash flow perspective. If you are seeking out asset accumulation and equity appreciation over the long term then there are certainly fortunes to be made. And there is still plenty of cash flow opportunities in the outer boroughs if you buy right!