All Forum Posts by: Danny Liu

 I like Harrison NJ and surrounding areas, especially with the PATH expansion project finishing up. New Brunswick and Bergen-Lafayette along the light rail are also up and coming in NJ. 

Generally the investor game in NY to buy into deals with as little money as possible, and rent + hold properties in good locations for the appreciation to eventually refinance or HELOC out of. Most of em are negative monthly cashflow even with full occupancy (and full occupancy is never guaranteed even in NY). These deals require a lot of upfront capital or cash in reserve -- you lose money month over month but your property appreciates so well the overall deal is positive, and you get a cool little IRS refund each year from your 'losses'.

Queens + Long Island isn't bad either, you just gotta find areas close to the LIRR or in good school districts. Watch out for the property taxes though.

But 50k total is tough in any of these areas. You'd have to take on quite a lot of risk with creative financing. Not friendly for newer investors. I'd recommend saving up and analyzing deals from the sidelines for a bit, especially with the interest rate hikes and the over-leveraged state of the multifamily space.

Another strategy is to wait for Opendoor to declare bankruptcy and buy from their fire sale: https://www.opendoor.com/w/faq... 
(website traffic to this url has more than tripled since their CEO publicly stepped down).

Good luck!

basically anywhere but nyc =)

chatGPT's training data ends at EOY 2021, and samples of its production database are actually open-source. It basically just scours the web for similar content and then combines them into cohesive sentences with natural language processing.

It's not actually generating any 'new' advice, it's just synthesizing the content that's been viewed and re-viewed on the web. 

i.e chatGPT has never actually built a $100m business, and its production database  (information leading up to EOY 2021 that is labeled "success, 100m, real estate investing, business") may not be the best guide for success in 2023 and beyond.

Also the prime problem with non-technical 'influencers' like alex hormozi reviewing chatGPT is that he actually has no clue how the algorithm was built, how the models were trained, how applicable its results are over time, and what the model's limitations are. He's just tagging along with headlines for clicks on his content.

Also, I look at this advice and think 'no **** and completely vague'. The difficulty is actually getting into high-quality properties at a high quality price, and maintaining a healthy working relationship with a high quality team over time.

Yup, but inflation is more of an effect of cheap debt and not a cause of housing prices in my opinion.

Homeowners probably won't list their homes and overall affordability is going to be low, so single family is probably going to be illiquid-- i agree.

As the cost of debt rises in 2023 it's going to be the syndicates, REITs, and over-leveraged investors (the gurus in YT videos with 'xxxx' doors via no money down, 5x leveraged financing) who are going to be in deep trouble. Will be plenty of opportunities in the foreclosure and pre-foreclosure market for some large multi-family/commercial estate.

I'd do negative CF although not now-- I'm going to wait for the market to bottom. There's a crash coming in the multifamily space.

If I pick up the right deal, I'd settle for $1k-$2k negative CF per deal if it's in the right area and appreciates well.

also if the decision is between

1. a 50k profit flip

2. a 40k profit BRRR with 0 monthly cashflow,

2 is almost always the much better choice if you're able to make enough money to cover the maintenance costs of the property throughout the years. You will burn through the extra $10k in a month or two, but the house is going to appreciate and the tenants are going to steadily pay down your loans. After a few years you can make your invested equity liquid again for another deal via HELOC or refinance.

Also, having a lot of properties means you can pick your timing when it comes to refinancing/selling. A lot of house flippers are going to be forced to sell in the upcoming downturn, but plenty of long term investors are just going to sit through and exit when the interest rates & market is more favorable. 

 The academic answer:

You can calculate your yearly return on equity as:

 Return on Equity = Cash Flow after PITI + Principal Paydown + Appreciation / Total Equity

and theoretically, as long as your negative cash flow is smaller than that number (maybe minus appreciation if you don't want to be exposed to market shifts), you're actually making a positive return on investment yearly.

The practical answer is to only accept negative cashflow when that amount doesn't directly impact your wellbeing and quality of life. I would never want to be making my loved ones live on less because of an investment.

Hey all, a potential rental deal sits on a 10k sq ft lot and has an all-grass front lawn and backyard. City zoning is very unlikely to allow me to build another unit in the current backyard, so what's the best way to keep maintenance costs low? I know I can't expect tenants to take care of it-- are there any possible ways to creatively transform it into something useful?

I sold off all my STRs in NYC a few months ago and I'm looking to re-invest the proceeds in Jersey City/Baltimore BRRRRs and Long Island flips. 

Super bearish on manhattan as a rental market. Rent prices grow but too many corporations and wealthy families have exploited the rules and made neighborhoods unaffordable for most. The city gov is also just backwards, and a lot of the "democratic" policies are just passed for corporations and family funds to benefit off of. If you don't currently operate a nyc STR, dont start now.

I have no proof, but I'd suspect the Airbnb rules got passed after extensive lobbying from the NYC developers, hotel chains, and commercial property owners.

Run it through a property inspector and make any offer with an inspection contingency. a 20k rehab budget is far too low