All Forum Posts by: Eric A.

JOE MILL what are your favorite neighborhoods in NY with 5-caps and what is the cash flow situation if you put 20% down purchasing today?

I'm considering investing out of state, and from what I've read here on BP, the best cash flow areas are in or around cities in the Midwest or South. Cities like Kansas City, Indianapolis, and Milwaukee frequently come up as great cash flow areas, but always come with the caveat that in 10 years the properties will be worth basically the same when adjusting for inflation. My understanding is that these areas have healthy and diverse economies, stable populations, and strong rental demand, all of which create high cap rates and above average rental returns. My question is, where can I find cash flow AND appreciation? Cities like NYC where I live are highly speculative in nature, meaning the only way to make money is through appreciation (there is no cash flow when cap rates are 3% and rent to purchase price ratios are below 0.3%. I know some people did really well in the last 6-7 years in several Texas cities (Austin/Dallas/Houston etc) where they enjoyed cash flow and then a sudden boom of appreciation. But I'm assuming I missed the boat on those cities at this point in the RE cycle. Has anyone done some good research and is willing to share predictions for which cities might be the next Austin/Dallas? Or can anyone make the case for a particular city as being strong for both cash flow and appreciation? Or am I searching for a unicorn?

Thanks guys. I have a pretty solid idea of what the comps are. Basically the same unit one floor up sold in June. The problem is, I don't want to pay "retail price" if you know what I mean. My hope is that by cutting out the middle man (broker) that I can get the unit for a bit below (3-6%) where the comps are. The landlord may find value in not going through the full dog and pony show of listing with a broker, doing showings, fielding offers etc. She knows my financials and knows she can take me at my word. Do you guys think a starting offer of 10% below where that comp sold is too much of a lowball? Besides, the market has been feeling a little soft here in BK for several months. Part of me wants to wait 6 months for this to turn into a full blown buyers market (dare I even wish for a small correction?) before pulling the trigger on anything. Can you guys who are brokers corroborate my feeling of a softening Brooklyn market? Has Trump's victory had any discernible impact on our market which is dominated by foreign players?

Hey all, I recently put out a feeler email to my landlord (I rent in NYC) asking if she'd entertain selling the apartment to me, and to my surprise, she said she was "definitely" interested. My landlord lives overseas. My question is, what do I do next? Has anyone ever encountered this type of situation? We have not discussed pricing or anything, but I was wondering how I should handle this negotiation and whether I should make the first offer or ask her for an asking price. Also, is there a more creative arrangement I should be considering? I've heard about rent-to-own scenarios and owner financing, but I'm really not versed in how any of that works. Can someone enlighten me? All advice is appreciated. Thanks!

That rental income seems high to me, unless both units are duplexes or it's very close to Clinton Hill. Is that what the tenants are currently paying or is that the broker's "projection"? Never buy on projections, buy based on actuals

Llewelyn Adal your analysis seems correct, but I think you're missing the point. Most people don't have 200k lying around to buy a property all cash (that number jumps to $1mm+ when you're talking about Brooklyn). When I say it's next to impossible to "cash flow positively" in Brooklyn I mean with a 20% down payment which is the most common down payment and therefore the benchmark for all property analysis for mere mortals (in my eyes at least). Most folks on this site are looking to take advantage of leverage to turbocharge their returns. If I had a million dollars cash lying around I could think of a lot better things to do with it than invest in 3-4% cap rate NYC multi families with no leverage. Tax free municipal bonds come to mind, where you don't have to worry about property management or landlording.

Shawn Ackerman what Midwest cities do you like the best and why? S.L. White I've heard good things about Yonkers for cash flow, although I don't have first hand experience myself there.

What Anthony Perez says is likely true. The question is do you want to live in East New York (I personally wouldn't) and do you want to live under the same roof as your tenants (I'm not sure).

My opinion is that unless you are willing to push into less safe/established areas you won't be able to find positive cash flow in Brooklyn. Most investors here are in for the appreciation play and therefore cash flow doesn't really exist. I think the best strategy is to find an off-market or distressed property and rehab it, then either flip or rent out (if it cash flows).

Saw this article yesterday. Are any folks here actually holding back on purchases given the early signs of a slowdown (especially high cost speculative markets like SF / NYC) or is this overblown?