All Forum Posts by: Trevor Ewen

@Jennie Jones

Clearing out my inbox and just got this: https://www.globest.com/2019/11/01/new-york-based-multifamily-investors-flock-to-south-florida/?slreturn=20191002115358

Definitely underscores my comments.

@Shawn Choi

Had a very good experience with my Section 8 tenants. This was in Virginia, but since it's a federal program, the lessons should transfer.

As others have said. The guaranteed rent is very nice. The scarcity of Section 8 vouchers has also made them desirable enough to ensure good behavior. Even though we sold the property this summer (because we liked the sales numbers), I would happily do it again.

@Alfonso Simmons

I live here. I make money here. I get it out of the state as fast as possible.

If you've seen me on NY related threads, you know I am a bear on New York City investing. Right now, I see all the headwinds you could have in a property market. Rising inventory, high taxes, increased (and often misguided) tenant protection laws, and demographic trends that point in a bad direction for future growth. Rent-value ratios in the city are already too low to make predictable cashflow over time.

The vibrance and cultural commodity of NYC is unparalleled (after all, I still want to live here), but it translates poorly into investment returns. Part of that is the old adage that "something everyone knows is not worth knowing". Since everyone knows New York is cool and vibrant, it's entirely priced into every transaction. 

When you go out-of-state, you have to take a more passive approach. However, there are great ways to engage in that realm. 

Also, if there's nothing tying you down, moving to another region has never been better. Debt is cheap at the moment and there are private investors in the Northeast looking for better places to put their money. I like my career and have a high opportunity cost to leave. If that is not the case for you, then heading to a new place to start real estate investing is a very smart idea.

@Jennie Jones

I think these new laws make it harder to justify investment in an already tough market. Property taxes, tenant laws, increasing inventory in the city, decreasing market value upstate, and demographic trends are all headwinds for the NYC and NYS markets (the city is obviously different from the rest of the state).

I believe the best strategy is to look out-of-state. This has obviously been my approach, and I have been happy with it. My friends who have chosen the other route have either lost money or made returns so small that it would be completely unacceptable anywhere, save for the emotional and cultural attachment they have to New York City. For my part, I do love it here, it's just not where I wish to invest.

I have done some limited analysis upstate, and I see the other side of a tough picture. High taxes and declining growth prospects for those cities make it a tough sell from a growth or cashflow perspective. No matter which way you slice it, there are sunbelt regions with better favorables on all points. 

@Markus Jackson

It sounds like you have a good growth plan. Inventory is very tough these days. Curate your network and come up with a number of people who would trust you enough to fund the first deal. The first one is the hardest from a track record perspective (for obvious reasons).

Solicit feedback, take copious notes, save pictures and you will be able to build on this as your track record. Even a properly communicated failure can build trust. 

@Bryce DeCora

Very nice! I haven't done a text message integration for about 2 years. Imagine the tools are getting better (and more competitively priced) all the time. 

@Oneil Guntner

The big tradeoff in this business is money and time. It's a generalization, but people starting out tend to have more time than money. Experienced people have very little time, but hopefully some money on hand.

As you go through life as investor, you want to understand where you are on that spectrum, and then do the matching work. 

If I were to take the guess that you have more time than money, then I think your goal should be to find investors willing to work with you on a vision. The numbers have to work, the deals have to be real (and available). If we assume that, then the only thing standing between them and a good return is someone to do the work.

That's the general stuff. On a specific note: I would stay out of the California market. Political and price risk in coastal markets is very real at the moment. My (limited) investments in the Northeast have vastly underperformed my investments in Tennessee & Kentucky. NYC & California are not 1-1, but there are similarities: Inflated prices, high taxes, demand for more inventory, and (often misguided) demand for rent regulation. I absolutely support efforts to get more inventory into these markets, but all those indicators point in the wrong direction for investors. When you factor in disaster risk, it seems like a good decade to sit out on the CA market. I still recommend doing your work there as a realtor, but I would take your money and get it into another state as fast as you can.

@Vance Wyly

This is something that's not too hard to do with a little programming know-how and a text message API like Twilio.

If you don't find another route, I would recommend something like that.

@Jean Gousse

@Joe Villeneuve has got the right idea. NYC has a few things going against it now, in addition to the fact that the numbers on rentals haven't made sense for years:

1) New rent protections and a desire for more.
2) Plenty of new inventory in Queens & greater NYC (I live in Long Island City, so we are at the center of it)
3) Later stage in the economic cycle. High levels of consumer debt. 

It's true that the big glut in inventory is at the luxury end of the market. That said, it tends to have a cascading effect. As developers realize they can't make money on luxury, they modify their projects. The got the permits and the funds years ago, so they have no choice but to go full speed ahead. As that market saturates more, they move into different types of units until each one is less profitable.

As someone who lives in NYC, it's nice to see more inventory and better costs for the renting public. As an aspiring landlord, all these factors would be massive warning signs.

As I say to most New Yorkers: "Make your money here and get it out-of-state as fast as possible." There are much better markets for cashflow, although very few in the Northeast. Best of luck!

@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.