Posted by michael o. on August 05, 2008 at 21:33:58:
Hello, I wanted to ask you some questions such as which market is better to invest in rochester, buffalo, niagara falls or syracuse?
What are the best management companies i can try to contact?
I’m looking to start a real estate company and eventually invest in commerical properties. How feasible is it?
Cash Flow Properties - Western New York - Posted by Steve T.
Posted by Steve T. on June 14, 2007 at 19:12:37:
Greetings. I am a relatively new investor looking for cash flow propertiews with no deferred maintanance. I was advised to look in Westen New York at multi-family units that have been rehabbed and already tennanted. I have seen hundreds of these type of units available on Loop Net, most with killer cap rates, almost to good to be true. I am a bit nervous investing in units so far from my home, and trusting managers to care for these properties. Can you pros please tell me if investing in Western New York is worth the risk? Thanks!
Re: Cash Flow Properties - Western New York - Posted by Rich-UT
Posted by Rich-UT on October 09, 2007 at 20:31:55:
Hi Steve,
I love WNY! I go to Buffalo/Niagara Falls once a month to pick up more properties. I have bought several without ever seeing them. I had made several mistakes when I began, so here is my advice to you:
Cheap houses can be absolute money pits. I budget in an extra 50% in my estimated repair costs when rehabbing. Make sure you get an inspection done. My inspector takes photos of everything for me so I am rarely surprised.
Your property is only as good as your property manager. You would not believe the number of swine that are in this business in WNY. I know some good ones that my bank recommended to me. Many property managers in WNY have a habit of not doing repairs. So many homes out here have deteriorated because of this, and eventually they will be condemned. Many of these properties are 100 years old. You should expect some small repairs at least once a quarter. If your property manager isn’t telling you to fix things, then fly out to make sure that they aren’t being slum lords. If you don’t stay up on repairs, the property managers will just wait for “their” tenants’ leases to expire and shuffle them to another, more suitable property that they have under management. And of course they will blame their own negligence on the property owner. That’s right, THEY will dump YOU. Its scandalous, and it happens monthly in WNY. There are some great companies out there though, and they really are at the bleeding edge of their game.
If your property is in a bad neighborhood, then your biggest concern should be vacancies. A vacant home is as good as looted if it sits too long. I have looked at countless properties that had been stripped of all copper pipes, sinks, fixtures, etc. by looters. There are some neighborhoods in Buffalo that have slightly higher priced properties, but the cap rates are still comparable and the neighborhood is decent. They are also easier to get financed.
NY has high property taxes and municipal fees. The tax info on the MLS will usually list the county tax, but find out what the school board fee is, as well as the sewer tax, water tax, city fees, etc. 8% per year is not unheard of.
A lot of people treat their investment properties like stocks that they might own. Treat your properties in WNY more like vending machines that you own instead.
That said, WNY offers some of the best returns in the US for income property. They are almost immune to a housing market crash (how much lower can they go?). I’ve never made returns like this on my home turf. I’m getting properties with 22%-40% cap rates. That beats the pants off of the 5% returns back home. I have a good checks-and-balances system set up with my property managers, Realtors, contractors, etc., who all watch my back pretty good so I can sleep at night. I love WNY. My partners and I can give you specific info if you need it. Just send an email.
Re: Cash Flow Properties - Western New York - Posted by John Corey
Posted by John Corey on June 20, 2007 at 08:17:58:
No way to tell really. It depends on how you view risk.
A bigger property will always have a property manager. It is priced
assuming there is a property manager. Some property managers are
true specialist and they are very good at what they do.
If the distance makes you feel uncomfortable are you saying you
expect to be a bit hands on or that you would visit the property to sort
out issues? If so you likely should stick to something more local even if
the cash flow is not as good.
John Corey
Re: Cash Flow Properties - Western New York - Posted by steve
Posted by steve on October 09, 2007 at 21:16:47:
Greetings Rich. Thanks for the informaion - very informative! I would love more information. Please send me whatever you have. I have found it tough to obtain financing for WNY…Seems no one wants to finance anything less then 100K anymore. Anyway, my addrfess is steve_tobias@msn.com. I would love to learn more. Thanks again!