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Updated almost 5 years ago, 01/13/2020
Long Distance investors in NYC
Hey friends, Happy New Year!
I am looking to buy my first investment property in the first half of 2020, and since I live in Brooklyn, NY and I’m not yet a millionaire, this will be a long distance investment. So far I’ve read both of David Greene’s excellent books, Brandon Turner’s rental property investing book, and a few others but the list of must-reads remains long and I’m so thrilled to get to them. I’ve earned a lot in the last two months but I would still say I am very much a beginner with most of the concepts.
I am wondering if there are any other NYC dwellers who invest long distance on these forums, and if so, would you be willing to meet up for a coffee or lunch on me in the near future and chat about strategies, areas, and all things investing? Or even just chat on the phone perhaps if time is tight. I know it’s a lot to ask to meet a complete stranger and have them pick your brain, but seriously, you can order whatever you want on the menu and if you want music lessons, I can offer those as I am a musician by trade (mostly drums and guitar.) I also can teach you Spanish or Japanese. Yes, all very random things that may or may not help you in your investing but hey, figured it wouldn’t hurt to put it out there as they are all things that have enriched my life over the years an unquantifiable amount.
Thanks for reading, and may this year bring you all success and fulfillment in your investing and related endeavors!
Tommy
@Thomas Hartman
Hey Thomas,
I am also from the New York area and find it hard to find anything below $400k-$500k to invest in. Have you tried looking in Albany market? I went to college up there and new a few people who bought 2-3 family houses that have high cash flow and can be purchased in the $50k-$150k range with most properties only requiring about $15k-20k down to start it’s not a bad market to begin. As I say this, I myself have not invested there yet but have analyzed many deals from there and know it’s worth taking a look at of your gonna go the long distance route. Plus it’s only a 2 hour drive away.
Hope this helps!
@Thomas Hartman, & @Nicholas Mann, if you guys have no experience with RE investing, I would strongly urge you to start locally somewhere, or near enough where you can get hands on with the process. You need to be well informed and get some experience in order to make your first remote deal work. What you read in the books is informative, but does not replace experience, and each one of the people here can have a different flavor of experience when it comes to reality.
Not to crush your dreams, but you need to first learn the ins and outs of it before you can actually invest remotely and be able to make it work. Would love to hear other investors here as to what they have to say.
Good Luck!
@Nik Corbaxhi
Thanks Nik,
Yes I agree with you as well. Myself personally would love to invest where number seem almost magical but I have made it a priority this year to purchase a simple 2 family in my local market. Average price of about $500-$600k and little cash flow and 2-3% Cash on cash ROI. I'm hoping beginning local and property managing myself will help me to learn a good amount of ins and outs to help spread my investing elsewhere in the future.
Thanks again for the insight
Happy 2020
@Nicholas Mann, great to hear that you are taking this seriously. 2-3% COC is absolutely not worth your time. You have to do better than that.
A couple more things to consider though.
1. Find a good real estate agent in the area and start building a relationship. Work with him/her to learn about the market, what properties are yielding better returns, and what are the "hot" areas in the town where investors are enjoying good yields.
2. Once you know your market and the type of property you want, then start crunching the numbers. A good real estate agent should be able to provide you with comps of similar homes in the area. There are a lot of good posts here if you search for how to calculate ROI and COC including PITI + Maintenance + vacancies.
3. Set a goal for your return. DEFINITELY NOT 2-3%. how about as a first time property 8-10% after all calculations in number 2? This is very judgmental and I am sure other people here will say 8-10 is too high or too low. So you make your own rules on this one, but what is for sure is that 2-3% is absolutely not worth your time. Educate yourself a bit on the 1% rule if you are not familiar with it. Although it does not always stand, it gives you an idea of what the purchase price should be based on expected monthly rent.
4. keep building your network of investors in the area. It could be as simple as asking your real estate agent getting you in touch with other people that are doing the same. Usually people are very open to sharing their stories and helping you understand how they got to where they are, similar to what they are doing here but better, over a meal or a beer or two. :)
Good luck and go out there and network. The wealth of knowledge is there, you just need to go look for it.
@Nicholas Mann
Thanks for the heads up on Albany! I will definitely look into it. I’ve also been interested in other towns up the Hudson a little closer to the city. Kingston for example. I definitely see some potential there but I haven’t yet looked into tenant-landlord laws and how much they’d favor the landlord (NYC proper is a very tenant-friendly city, I do know that.) Nor have I looked into labor costs for rehabs and repairs up there. I know that labor in NYC is crazy expensive. Either way, I’m still very much a beginner and I know there is so much to learn so that’s what I’m trying to do!
@Nik Corbaxhi
Hey Nik, I appreciate your input! Thank you for sharing. I’d like to dig deeper into this with you if possible.
No, I have no experience with any single property yet other than analyzing deals on my own, so I’m sure I will learn a TON when I jump into a deal, but I have to say that after reading both of David Greene’s books, he makes a really strong case that investing long distance is really no different than investing in your own backyard, and if anything, investing closer to home might only be a hindrance to your progress as you will tend to get more emotionally involved, and want to micro-manage everyone on your team. Virtually all correspondence with team members would be over the phone, text, FaceTime/Zoom, or email anyway, so I’m wondering if you could share your perspective on why it should actually make a difference where the property is located? I am not meaning to sound argumentative, I only want to know because yes at first I was thinking it sounds almost silly to try and trust a team of people I don’t know and will never meet in person to do everything in my best interest for my investments. But the more I am learning about it, it just seems like the core foundation of succeeding in real estate is about building relationships, and having solid communication. What do you think?
@Thomas Hartman you may consider connecting with @Horton M. he already knows Spanish but I'm not sure Japanese is up his sleeve!
@Thomas Hartman happy to chat. I live in NYC too and I invest long distance. Let me know if you’re free Sunday or Monday.
Originally posted by @Thomas Hartman:
@Nik Corbaxhi
Hey Nik, I appreciate your input! Thank you for sharing. I’d like to dig deeper into this with you if possible.
No, I have no experience with any single property yet other than analyzing deals on my own, so I’m sure I will learn a TON when I jump into a deal, but I have to say that after reading both of David Greene’s books, he makes a really strong case that investing long distance is really no different than investing in your own backyard, and if anything, investing closer to home might only be a hindrance to your progress as you will tend to get more emotionally involved, and want to micro-manage everyone on your team. Virtually all correspondence with team members would be over the phone, text, FaceTime/Zoom, or email anyway, so I’m wondering if you could share your perspective on why it should actually make a difference where the property is located? I am not meaning to sound argumentative, I only want to know because yes at first I was thinking it sounds almost silly to try and trust a team of people I don’t know and will never meet in person to do everything in my best interest for my investments. But the more I am learning about it, it just seems like the core foundation of succeeding in real estate is about building relationships, and having solid communication. What do you think?
I haven't read any of the books that you are referring to but from experience, investing long distance while exploring real estate would not work for me. I see it regularly. Building relationships and building trust with a team long distance is great, but in order to have strong foundation of such relationships, it has to start by meeting in person. Also, how can you give clear concise directions to your team when you are new in the field and many times you dont know the answers yourself? Being hands off might make you some money but you will not know the ins and outs of property management and being a landlord.
Happy to chat about the Albany market as well. I might suggest to determine your criteria first, find the area(s) that provides those opportunities second, team third, and lastly the asset itself.
Don’t try to hit homerun your first at bat, just get on base. Things will snowball from there.
Things will never be perfect when starting (or ever), but it’s all part of the story.
@Horton M.
Hey Horton, thanks for the message. Could we meet on Sunday afternoon? I’ll be working in UWS til 12:15pm, could meet shortly after that anywhere in town. Let me know!
+1 to @Nik Corbaxhi and @Jerid Meagan's advice. Pick one method of investing and do it local first; get on base and take it from there.
I am starting out with buy/hold for a 4-plex, leveraging 3.5% FHA then will refinance out after rehab to get (most of my) cash back. Even on a $600k+ home the closing costs are very doable given the budget you specified. Just have to be patient and find a good deal!
I have read a number of BP books that detail both BRRRR and Flipping; buy/hold is what make sense for me at this time :-).
@Thomas Hartman if you are ever find yourself in Westchester, feel free to give me a shout; I've got Spanish covered but my Japanese is only somewhat conversational!
@Thomas Hartman @Horton M. I live in BKLYN and by in Albany area
The recent changes in NY landlord / tennant laws, is now more tenant friendly.
Hi everybody, I am an agent from Albany, NY. If anyone would like to connect about the market up here feel free to send me a message. Thanks!
@Thomas Hartman I"m an agent and an investor in Albany - I can show you the ropes if you want at no cost. I went through the information posted here and some of the information is false...as in buying a 2 family between 50-150k. For starters thats a really wide range, secondly the amount needed to purchase that much is tad more - depending on how you buy..in your case seems as if you wouldn't be living in it...and if you go the bank route you need a minimum of 20% down + closing costs.
Message me and we can continue this conversation, I have a bunch of listings I've analyzed for clients and maybe one of them will work in your favor.