In NYC and I need help!

General Real Estate Investing
1

Hi All and Happy New Year!

I’m very new to real estate although I’ve had this passion for over 5 years. Throughout the years I’ve purchased Carleton Sheets, read real estate books/magazines, and watched Flip That House and House Hunters all the while juggling parenthood and a stress-ful job. I’m not study material from Armando Montelongo which has surpassed my expectations.

Since my intro to this site on yesterday, I’ve placed ads on various sites offering my services as a property locator. I’ve also reached out, via email, to several names featured here in threads. I plan to attend the monthly investments meetings here in city so that I can begin building relationships.

I had great credit (707) but due to financial hardship, it’s decreased over the past few months. I have no capital, due again to finanacial hardship. But I’m eager to learn and absorb the information at a steady pace. I’m also willing to do the foot-work and reach out for help. Tell me, are there any other steps I can take to assure my progress? Do you know of any investors in NYC? Once I become a property locator (and is this the best route?) how soon should I realistically be ready to go after my first deal? Thank you for any input. Takeya

2

On this website goto the Investor Resource section on the the left and select Real Estate Clubs. Look for one in your area and join them. Attend the meeting and network with investors in your area.

The best training is hands on training… All the crap you bought is so called gurus who have been out of the biz for years or decades and peddle the same crap with a new cover…

Find a mentor and learn how to bird dog for them. Each deal will pay $500-$1000 generally and you may get the occassional bonus. After a few deals , start asking to get involved and learn first hand from the guys doing it in your area…

3

I was interested in that bird-dogging for investors but I am taking RE classes in NYC and I found out that it is illegal to get a commission without having a RE license. Instead of becoming a bird-dog I will put myself under a brokerage when I get my license and split my commission for a while until I have my brokers license which allows me to go on my own. You can make good money as an agent and at the same time learn the ins and outs. Maybe you should move into that direction. :cool

4

I am also a New Yorker looking to birddog for Investors, and I am under the impression that the $500 to $1000 is a finders fee, not a commission, so its perfectly legal. I hope I’m correct.

Lainey

5

To my knowledge birddogging is legal in all 50 states. Do not ask a realtor since as a birddog your competition to them. Ask a competent attorney in your area or better yet the guy advertising his bird doging skills.

Birddogs get paid to bring leads to investors. A birddog does not write a contract with the seller, so no commission is paid out. The bird dog recieves payments wether or not the buyer closes since it can take time to close a deal. The investor is merely paying for solid leads.

6

You’ve all been great. Thanks so much. And yes, I’ve already sought out the investment clubs here in NYC and I will be attending.

Becoming a broker/agent isn’t the avenue I want to pursue but I’m sure it is helpful too.

7

Bird dogging in NYC/5 boroughs is near impossible right now because NOTHING makes money or even remotely close…Hate to burst anyone’s bubble…My suggestion is try to find some upstate connections and look for possible owner financed properties and scrape together a down payment…Bird dogging isn’t easy unless you have made connections in a cash flow positive area and you also have investors on speed dial…

Another great idea if you are hell bent on staying in the boroughs is become a property manager…PM’s make %7-%10 of the rent roll and manage the entire property…This way you learn the business inside out with none of your own $$$ being used or at risk…Become an employee for a local PM firm and then after you secure the position start taking PM courses at a local community college and show interest…Surely you will meet up with some large investors who have portfolios in need of management…Trust me these type of people LOVE a hungry person who is willing to break their back to learn…

8

Thank you again! Great advice and I kind-of had the feeling that birddogging here would be a task. But I’m going to go to the investors meeting and see if there’s any upstate connections.

9

It didn’t take me long to figure this one out. I started with the RE classes for my own RE company and it was a good move, I meet a lot of other people and the license gives me more flexibility to operate and achieve my goals as an investor. this strategy gives me the best of both worlds…I learn, earn and build wealth all at the same time.

10

It won’t be easy I know, but here’s hoping that I can find a deal or two somewhere in a city of over 300 square miles with a population of over 8 million (some of which want to sell or are in the process of losing their housing).

Investing far away just doesn’t seem wise to me. I have no idea what a deal is in Syracuse, Buffalo or Philadelphia, but I know one when I see one in Bed Stuy, Laurelton or Jackson Heights.

If someone I’m leasing to in Syracuse refuses to pay me, I’ve got to rely upon a property manager far away to take care of it. Some leasor(?) in the Bronx tries to stiff me, my brothers and I can go get the job done.

Which one is a good neigborhood to invest in in Phillie? I have no idea, and all I know about Buffalo is that they have plenty of snow and hot wings. But in the sections of NYC that I’ve lived or worked in (and believe me there are several), I know which neighborhoods to avoid like the plague, and which ones are slowly changing and are fantastic places to stake a long term claim. That kind of knowledge has to be worth something to somebody with money in their pockets to invest. Wish me good birddogging!

Lainey

11

Lainey,
Show me 1 single property in any of the 5 boroughs that makes money (after vacancy,management,repairs,LANDLORDS PAY ALL UTILITIES IN THE BOROUGHS,Insurance,taxes,mortgage) and I will stand corrected…My friends all own buildings in Ridgewood,Bed Stuy,Corona,Jackson Heights…They all bought over 5 years ago and they barely make anything other than break even or positive a few bucks…Dollar for dollar the boroughs is still way out of range…I never said Buffalo,I never said Philadelphia…I don’t mention areas but if you look there is oppurtunity…But if you want to pay 10-15 times annual rent roll for Corona,Jackson Heights and chase people around Bed Stuy (or be chased up and down Pitkin and Pennsylvania avenues have fun…You couldn’t give me a property to be a landlord in Bed Stuy or Cypress Hills…I have lived in and around Queens my entire life and have been mentored by someone who built the staples building on Queens Blvd so I will follow his lead…

Fwiw South Jamaica,Cambria Heights,Queens Village,Laurelton (Hollis etc) DOES NOT CASHFLOW…I own commercial property for over 18 years where my manufacturing business has been…I know QV/Hollis better than anyone…Even the foreclosures are outlandishly priced…I totally disagree with you…

12

I find words like “Does Not” “Nothing” and “All” can always have exceptions found for them.

The investors that my boyfriend pays his rent to each month without being chased down the street seem to be making more then enough money. So much so that they just purchased another property in Bed Stuy, this time a 6 story multifamily building.

My mentor at my REI club owns several houses and apartments in Brooklyn and they are doing quite well (she’s a stay at home Mom and her husband works in Manhattan) and they are always looking to add more properties to their portfolio. They even have some section 8 tenants that she says they’ve had no trouble with so far.

But have it your way rookieNYC. Less competition in the boroughs leaves more deals for me to pick up.

13

laine,
a 1031 exchange purchase and investing for cashflow are 2 totally different things…Like I said earlier, show me an example of a property that you deem worth for an investment that makes money and I will stand corrected…

As for your mentor making money etc,when did he buy???..I highly doubt he is willing to pay 10-15 times rent roll for dumps in Bed Stuy,Cypress Hills area…Do the numbers for yourself…Take out %10 vacancy, %10 management,%5 repairs (which is unreal cheap), $5,000-$7,000 insurance for those type buildings,taxes $5,000-$7,000,$10,000 a year oil/gas/electric,mortgage on a $700,000 building,$2,000 a year in water…On a $50,000 rent roll…And section 8 ???..LOL…I have seen the inside of these type of buildings in Bed Stuy and Cypres Hills, they are dumps in need of major repairs and maintenance constantly…So much so that the city was giving these buildings away years ago…Bed Stuy and the surrounding areas will only cashflow at half the current prices…

Here is a link from the multiple listing website for Brooklyn Mulit families…Please show me which one will cashflow while paying 10-15 times annual rent roll…Enlighten me with your vast knowledge…

Go to www.MLSLI.com and find me ONE property that you deem good for cashflow…I will be waiting…

Example of one I found…MLS Number 1960958
BROOKLYN
List Price: $649,000
Taxes: $3,200.00
Total Income Annual: $60364…Taxes will reassessed to current buy price…
-$6000 taxes to reflect NEW PURCHASE price
-$6000 %10 management fee
-$6000 %10 vacancy rate
-$3000 %5 repairs,boiler,roof,vandalism,snow removal
-$2000 water
-$10000 heat,gas,electric
-$6000 Insurance
-$39,623.28 annual based on $450,000 at %8…30 year commercial mortgage
------------------------------------------------------------------------------
-$18,259 NEGATIVE CASHFLOW annually…
Based on $600,000 buy price with %25 down $150,000+$20,000 closing costs

Out of pocket for $170,000 to LOSE $18,259 a year…

You definitely have this market wrapped up…It’s all yours…

14

what about nj? properties cashflow there?

15

Thanks for the breakdown rookieNYC…as a beginner I want to stay close to home but I am not touching the areas you mentioned for cash flow because I know its a waste of time and precious energy. I’m looking into something in Manhattan and further upstate.

16

But why would I go to the MLS with hopes of finding properties that cash flow?

Foreclosures, REOs, Absentee Landlords, Divorcing Couples, inherited properties. Those are the people my mentors look to buy properties from far below market value. When they find something they think is worthy, they make purchases by taking advantage of equity they have in properties they already own, or get cash from others interested in getting a piece of the investing pie.

Do they do it often, I wouldn’t say that, but with so many New Yorkers sitting on properties that have tripled in value over the last 10 year (I know my own personal property has) there has to be many more investors (or potential investors) with ready cash looking to take advantage of the subprime mess. I would be one of them, but I enjoy going to Bloomingdales too much.

Whether they want to do buy and holds, condo conversions, rehabs, or whatever, those are the investors I am looking to birddog for.

Take a walk through Bed Stuy and Crown Heights and notice all the Brownstone to condo conversions going on, and the new constructions going up in every square inch of vacant land. Go to a couple of open houses and see the flock of people from Manhattan and other sections of Brooklyn coming to buy. Are these the best neigborhoods to live in when it comes to “quality of life” issues, depends on what you’re used to. But 10 years ago Clinton Hill/Fort Greene was exactly the same, and look at it now. Anyone who paid $600,000 for a Brownstone 10 years ago owns a 2 million dollar piece of property now.

I know, I know, some will say that is speculating not investing, but if someone wants to pay me a finders fee so they can speculate, I don’t have a problem with that.

17

Laine,
I understand the way you are thinking but I will change the formula around some and see where the deals fall…I will consider a drastic %40 DROP in property prices…The same deal but at $375,000 with the same $60,000 rent roll…(6 family)

$60,0000 annual rent roll
  -$6,000 %10 property management
  -$6,000 %10 vacancy rate
  -$3,000 %5 rehab,roof,boiler,graffiti removal,snow removal
  -$2,000 water and sewer
  -$4,000 taxes
  -$5,000 Insurance
  -$10,000 Heat,natural gas,electric
  -$26,415.48 ($300,000 @ %8.0--30 year term monthly $2201.29)

  - $2,415 NEGATIVE CASHFLOW annually......

Out of pocket…Based on %25 down on $375,000… $93,750+$15,000 closing costs…

Total out of pocket is $108,750 to lose $2,415 a year…

I’m not trying to feud with you…I actually admire the drive you have I just dont want you wasting your time on bad deals…I love to make money just as much as the next guy/girl…But these areas I’m extremely familiar with my entire life…If there was money to be made I would be interested very much…I’d much rather own a nice 10 family in Corona that made %20 a year…There isn’t any such thing right now…Not even when you cut the prices in half…There is too much overhead/expenses/taxes/vacancy/maintenance to make any reasonable return in our area…The boroughs have been driven to the moon price wise…