All Forum Posts by: Matt S.

Interested!

@Ruby Froom I would a say lot of it depends on where she wants to live and where she works. If she's going to school in Manhattan, say NYU or Columbia, the commute is going to be terrible once the L train shuts down (they're estimating 15 months...but who knows). With a six-figure income, she should be able to find a studio or 1 BR in a number of areas, so I would only suggest buying in Bushwick if she really wants to live there.

So if she'd prefer to live anywhere else, I would suggest investing elsewhere (Philly or another city) and using the cash flow to subsidize her rent.

Welcome @Angela Starkey ! Lots of great information here. I'm based in Brooklyn and have started to look at the Philly properties.   

@Chad Eatinger Nice, I went to Stern for my MBA as well. You'll have a blast (and learn a little too). I hear what you're saying when you talk about throwing money away on rent. I used to think about it the same way and bought I bought an apartment in NYC as a result. I'm actually selling it now and renting elsewhere. In my mind, the key is net cash flow...as opposed to avoiding rent, but the appreciation potential in the NYC area is tough to beat.

Lots of good responses here. I've lived in Brooklyn for the past 7 years, so I can speak to some areas. With a $1MM dollar budget, you're going to be hard-pressed to find anything more than 1bd (or small 2bd) in Williamsburg, Greenpoint, Dumbo, Brooklyn Heights, Cobble Hill, Fort Greene, Boerum Hill and Park Slope. So you'll need to go outside of those prime areas. This means a significantly longer commute to Manhattan. Where is grad school? If lower Manhattan, south Brooklyn may work. If upper Manhattan (i.e. Columbia), you're looking at an hour and a half. You can find multis further south of prospect park for less than a $1mm. Sunset Park and Bay Ridge are good areas. The further east you go from there, the cheaper places get.

I guess the question is: do you want to spend your two years on the outskirts of NYC or in NJ, potentially in questionable neighborhoods, with long commutes just to have an investment there? It might be worth investing in cash flow properties in other cities and using the proceeds to subsidize your rent in a convenient NYC neighborhood. 

@Ian Ippolito Very good points.

@Gabriela Chenoweth I think it really depends on the client. In my opinion, evaluating crowdfunding deals are a bit more complex. And you also need to repeat the process for multiple deals to a) diversify and b) reinvest (most deals are 3-10ish years). So if you're investing in multiple deals, you'll need to gain some understanding of the markets, review sponsor track records, verify their financials projections make sense and that they're using reasonable assumptions, make sure the fees aren't excessive (fees vary for each deal). I'm not sure it's significantly more passive than a rental property with a property manager. 

The other thing to keep in mind is that crowdfunding sites haven't been around that long and have not experienced a downturn. They're all about 5-6 year old. During this time, the markets have been pretty favorable and probably have covered up mistakes that would eliminate (or created negative) returns in a down or flat market.

Really depends on the investor.

@Cory Gardner I might be interested. Feel free to PM me and we can set up time to talk.

@Jim McCabe PM with details if you're still looking for capital partners.

Thanks @Cody DeLong. Good feedback. So it's not possible to get positive cash flow at current price levels? Are rents still rising? People moving outside the city due to rising cost of rentals sounds like continued gentrification to me. I'll take a look at the surrounding towns.

Just a thought on gentrification...It's hard to know how long gentrification lasts. I moved to Williamsburg, Brooklyn 7 years ago. At the time, everyone was saying the area had gentrified, lower income renters were pushed out due to rising rents, and property values were the highest they'd ever been. 7 years later, property values have doubled since that time. We're finally no longer seeing people move to cheaper areas because rents are no longer rising.