Would like advice re: where to invest near NYC (or elsewhere)

Question

Hi - I own a house in Brooklyn, NY, and will shortly be refinancing to pull out about $200k to invest in other properties. I am leaning toward multi-families because I have experience with this type of property but would consider other types of property.  I would probably prefer to remain near NYC, but would consider out-of-state also or even overseas.  I am fairly new to this (although I have owned my Brooklyn 2-family for twenty years), so I would appreciate any advice regarding where I can find the best deals.  Most (maybe all) of Brooklyn and NYC generally is probably out of my price range. I am considering the Philly and Jersey City areas (and DC or Chicago if the deal makes the distance worth it). An acquaintance recently bought a condo in Berlin, Germany with a 1.3% mortgage interest rate (to my amazement), so that's also appealing, although the city just approved a 5-year rent freeze.  I'm obviously having difficulties focusing, so any advice would be appreciated. Thanks!!

Vaughn Smith · Answer

@Karl Kauper If you want to keep it local here are a few options for you in the $200k price range (If you could provide more details on what you're looking for the answers may change a bit)

Trenton/Camden NJ- There seems to be a lot of opportunity there but the real $ will come when the areas are further into the revitalization process

Newburgh NY- Theres a lot of speculation on when Newburgh will actually "Happen" and become the next (insert up and coming city here) but I have a friend up there that invested about the same amount that you are contemplating and he appears to be doing well

Philadelphia (Philadelphia outskirts)- Heres another area where people are doing well with a similar budget taxes and laws are very investor friendly as well.

If you are looking to use $200k as a downpayment to buy something larger in hope of reaching scale faster then the conversation looks different, Lastly be creative with the budget and explore other options short term rentals and single families are just a few often over looked ways to build your portfolio and to start to collect cashflow

Max Vishnev · Answer

Hi Karl, as a long-time (now former) Brooklyn resident and current Bayonne, NJ home owner and landlord, I can definitely say that your $200k in cash will go much further in many parts of NJ compared to Brooklyn and other gentrified parts of NYC.  There are good cashflowing opportunities for multi-families in parts of Jersey City, other parts of Hudson County, as well as counties a bit further out like Essex.  You want to look for towns with strong demand for quality rental units, proximity to public transportation, and price points where you can still get it to cash-flow after all expenses.

Let me know if you'd like to chat about this further.  Feel free to drop me a private message.  I'm a licensed NJ Realtor.

Jane Orlando · Answer

I'm in downtown Jersey City.  The prices are ticked up more toward Brooklyn prices.  $200k would cover a down payment for sure.  Take a look at Bayonne, NJ.  Cute two family homes under $500k with direct rail access to NYC.  I've been looking in this area for myself and clients.

Trevor Ewen · Answer

@Karl Kauper

The guys recommend Philly are correct that it is a little more reasonable, but it's still heated up in recent years.

Trenton is another nearby market that is affordable. It has its problems, but there are still deals there, and you have the transportation options.

Karl Kauper · Answer

Thank you all for all the information.

Alyse Oz · Answer

I’m originally from New York and have recently invested in Philadelphia and Wilmington, Delaware.  I see a lot of potential in both markets.  I especially like the low taxes in Delaware, and Wilmington is just such a cute little city with adorable brick homes.

Joe White · Answer

Almost half of the properties I manage, are owned by out of Philadelphia investors. NY being common among them.

Brendan Markle · Answer

I 100% second what Jimmy said, I have worked with many investors from New York who have been finding soem great deals in Philadelphia .  Especially with 200k to work with, you should have no problem finding good deals-  i'm an agent/investor in the city, let me know if you have any questions!

Jimmy O'Connor · Answer

@Karl Kauper a majority of the investors I work with have migrated down from NYC down to Philly for the reasons you stated above. 200k goes a lot further down here and you are not going up against the rent control Policy. As far as out of state investing, this market would be a great starting point for you as it is only a couple hour drive down I-95. I'll follow up with you in the private messenger to find out more about your strategy

Karl Kauper · Answer

Thank you, both. We definitely are looking for cash flow primarily, and we would be willing to look at out-if-state markets if the numbers make the most sense in Florida or the Midwest, etc. We probably want a cash-flowing multi-family. Does anyone have suggestions about specific markets to look in? Or, if that’s too broad a question, can anyone recommend a particular means or resource for finding the right market?