Buffalo/Rochester/Sycruse New York

Discussion in 'North America Real Estate' started by Ivesy1923, Dec 8, 2007.

  1. Ivesy1923

    Ivesy1923 New Member

    Hi there

    Has anyone heard of or invested in property in the above. The prices seem very low on the properties by im not sure on the area. Any advise greatly appricated.

    Many thankss
     
  2. thom123

    thom123 New Member

    I've bought in Buffalo

    Hi,

    I went over to Buffalo around May this year having heard of the yields on offer. I have since bought 4 places there.

    I've got mixed thoughts so far. Buying them took around 6 months. That was partly coz of the sub-prime crisis which meant that the lender pulled out just before completion.

    The whole process of getting finance and purchasing was painful tbh. The US and, in particular NY state, seems obsessed with paperwork. I guess it's coz it's a litigous society over there.

    Buffalo itself has its nice areas (very nice, in fact), some not so nice ones (very not nice, in fact) and some inbetween. It's the inbetween ones that have investment potential. Having a good set of contacts out there is essential to finding them.

    The yields you see advertised of 20% or 30% are realistic. Mine all yield between 25-35%. But this is the gross yield and expenses are higher there than investing in the UK. There are higher finance charges and lots of taxes. I personally wouldn't buy anywhere there with less than a 25% yield.

    I've held the places for a couple of months now and, income wise, I'm down because I've had to pay out for repairs. I'm hoping that these are just the initial teething problems rather than what I can expect going forward. It's too early to tell whether Bufflao will be a good investment for me. I have mixed feelings so far, but haven't ruled out further investment.

    I'm thinking of setting up a site about my experience of property investment in Buffalo. If you're interested in joining it, send me a message.

    HTH,
    Matt
     
  3. Ivesy1923

    Ivesy1923 New Member

    Re investment in Buffalo

    HI Matt

    Thanks for your reply, as you say the yields do sound very high and its nice to know they are for real (if makes sense not just to initially pull you in!!) I have been in contact with a company called Brennan investments Ltd,(did you use an ageny or company) They claim to deal with all the purchase paperwork step by step and everything etc. If you dont mind me asking how did you finance your purchase, and also if i buy outright in cash or by mortgage, is it like England do i own that property outright Freehold or is there any clauses. Sorry for all the questions.

    Many thanks Chris
     
  4. thom123

    thom123 New Member

    Finance and Brennan Prop Inv

    Hi Chris,

    I paid cash for one, which I actually bought via Brennan Property Investments. It was a bank repo for £15k all in. I'm told that I can refinance it in a year to get my cash out, but I won't know whether that holds true for another 10 months.

    The Brennans were fine - they don't do an awful lot for the money, but they were helpful enough and responsive enough when I called on them. They did say that they 'wouldn't have time' to look over a refurb qoute I got just after the sale went thru, which annoyed me a bit given what they charge. But I got some useful contacts out of it which was one of the main things I wanted. I'd say they provide a reasonable service for a newbie, but the best thing to do is to get over to Buffalo and see it all for yourself.

    The others I bought by getting loans from a private investor - expensive at 11% for 50% LTV, but it was my only choice when the mainstream lender pulled out due to the subprime goings-on. It seems that it's easier to finance a place once you have it, rather than financing it for purchase, so I should be able to remortgage to a better rate and LTV than I have now.

    Can I ask if you're an experienced investor? Reason is, I don't think I'd recommend it as a newbie - there's a hassle associated with it all, and it helps to have dealt with some over here first. Also, make sure you have a bit of cash spare as you'll probably find the place needs some work and your letting agent will have to keep hold of your rent until you get a tax number which takes around 8 wks (and you can't apply till you actually buy a place).

    Thanks,
    Matt
     
  5. Ivesy1923

    Ivesy1923 New Member

    Re America

    Hi Matt

    Thanks for that, i have started around 6 years ago property developing with my own company have turned around numerous properties, i never really wanted the hassle of renting properties, so i mainly sold all them on i have kept a few which just tick over etc, but am now looking to start investing over seas due to the current UK market conditions. I have looked at Natal/Berlin/France/Bulgaria etc but of them all the highest yields does seem to be in Western NY. Its good to hear you went through Brennan as this gives me confidence, but i know what you mean £2200! Any contacts greatly appricated.

    Cheers Chris
     
  6. steadybird

    steadybird New Member

    HI Guys
    Im looking to do the USA thing also as the yields look really good. Are Brennan £2200 per property or is is it a %? Matt do you recommend going out there and finding your own team? Ive been investing in UK for the last 4 years so have a good idea of how it all works and the one thing Ive learned is you really have to know your area! Are Brennan taking care of all the management etc - or do they literally just find you the place?
    Any advice Appreciated
    Cheers Amanda
     
  7. thom123

    thom123 New Member

    Your Team

    Amanda,

    I personally found it very useful to go over there and see the places and, more importantly, the people. I’ve bought a number of places in the UK that I’ve not seen, sometimes in areas I’ve not been to, but it’s different when it’s a whole new market. I got a lot of confidence that the investment potential was real from actually seeing the houses and areas, meeting a couple of realtors, a broker and a managing agent.

    The most important person in your team is the management agent. You need to be confident that you can trust them when you can’t get over there to see what’s going in for yourself. I’ve heard tales of managing agents who ‘forget’ to pay landlords. And you need the management agent’s advice to make sure that you’re buying in a decent area (Buffalo can vary from street to street, even in the same area).

    Matt
     
  8. Investy

    Investy Senior Member

    Why do people get burned?
    Because they are lazy, they fall for glossy brochures and salespeoples slick patter.

    If you want cheap safe high yield property I know of some in Germany, but Im not a saleman and I have no brochures, so you wont buy any. Ah well, such is life
     
  9. Jlewe

    Jlewe New Member

    Hi,

    I am going over to Rochester NY in a few weeks time to have a look at buying property.

    Can anyone suggest a good realtor/agent, management company, good quality builder for works needed and the areas I don't want to buy in?

    I have been in touch with a few estate agents and found they don't answer questions fully i.e best areas, worst areas, demand for rentals ......etc

    Any info greatly appreciated.
     
  10. oregon woodsmoke

    oregon woodsmoke New Member

    Buffalo would not be my first choice. There is a reason that property is cheap-- that's because nobody wants it.

    If you buy for a low enough price, the investment might work well for you. I suggest that you go and look, and be sure to have more than 1 real estate office take you around to show you properties. That will protect you against an unscupulous salesman that thinks foreign investors have lots of money and should pay extra high prices.
     
  11. thom123

    thom123 New Member

    Well, perhaps...but then that philosophy would restrict you to only buying expensive property! I've bought some cheap places in Scotland that rent easily, give me no problems, and yield very well.

    My Buffalo ones have been a bumpy ride so far though it's too early to say whether there's an opportunity there.

    Matt
    Propertyforincome dot net
     
  12. Investy

    Investy Senior Member

    I heard some horror stories on these low grade American investments where liens / loans existed on the properties and the new owners became liable and also where the state imposed statutory improvements be made to the properties!

    Why go all the way to the US, when you can find just as cheap in Germany. We bought a cheap block of flats here and make a 20% yield. My contact in Germany has a repossession for just 27000 euros with an existing tenant and in very good nick.
     
  13. trophy

    trophy New Member

    What rent is the tenant paying and where is the flat?
     
  14. evey7

    evey7 New Member

    hi matt

    HI Matt

    Its great to hear from someone who has actually invested in wny.I also have been looking at buffalo,rochester and syrause..i was abit waery of buying through online agency.
    when brennan property give you the total all in price..is that really the total price..including solictors ete,i know some need work and Im hoping to find one or 2 that need very little work done.I would be intersted in your site if you go ahead with it.any more info you have woukd be great.thanks evey
     
  15. unicornmagus

    unicornmagus New Member

    rochester

    I bought a property through the Brennan's in Rochester.
    I was due to buy another in Buffalo but it fell through because there was a charge on the title and the seller didn't clear it. As long as you have a decent attorney these things are spotted in advance as oppose to the horror stories.
    The house in Rochester cost me a bit to refurb. I had a short term tenant who left after 2 months. I now have a reliable tenant who looks likely to be long term.
    Gross yield is around 29%.
    If you are planning on buying over there I would suggest a degree of patience. It took 6 months from completion to find a decent tenant.
     
  16. fred333

    fred333 New Member

    The Rochester area is older, but it is coming back.
     
  17. trophy

    trophy New Member

    I am tempted to buy in Buffalo, but am a bit concerned about public liability /landlord's insurance. What happens if the tenant injures themself in the house? In the UK they would sue the landlord.

    I have asked 2 agents selling in Buffalo/Rochester and one told me that the property management company carried the indemnity insurance (this seems a bit unlikely to me) and the other agent told me not to bother about it!

    Anyone have any concerns or experience with this issue?
     
  18. evey7

    evey7 New Member

    thanks

    hi thanks for your thread.
    i have reserved a place in rochester,its un tenanted but they asure me it will be by closing and never had a case where a house wasnt tenanted so hopfully they will be good and longterm tenants.
    The report said work to be done will only cost 700$ but when read report there seemed a lot of ongoing stuff like to get electican and plumber in few times a year to do checks on various things in house so hope it wont start adding up too much.im relying on a good rental.
    have you or anyone else heard of or even bought with colossel property investment?
    thanks
     
  19. oregon woodsmoke

    oregon woodsmoke New Member

    Trophy,

    As a landlord, you have landlord insurance. That covers fire and other catostrophic loses. It does not cover damage done by the tenants. In some areas you can get insurance that will repair vandalism, but I'd be surprised if you could get it in Buffalo because of the type of area it is.

    As for lawsuits, the management carries insurance that covers themselves if they do something to get themselves sued. If they do something to get themselves sued, there is a good chance you will also be named in the lawsuit because they are your representative and acting in your name. It's assumed that anything they do with your property is with your blessing.

    As the landlord, you have liability insurance included in your landlord policy. When you buy insurance, you carefully check to see what coverage is provided.

    It's important to keep your property in good repair, so the tenants don't hurt themsleves on some unsafe feature of the property. There is a lot of difference between a lawsuit because the tenant tripped and fell and a lawsuit because their child fell through a rotted staiway banister. It's your job as the landlord to keep that banister safe enough that it will hold a person on the stairway and not dump them out into empty air.

    You also must make certain that the insurance agent understands that the house is to be rented out. There is a huge difference between the policy for an owner-occupied home and the policy for a rented home. You don't want to buy the wrong policy and then discover that the insurance compnay won't pay becasue your policy doesn't actually cover you situation.

    Insurance is very easy to buy: call 3-4 different companies, give them the address, and they will get back to you within a day with a price for the insurance and what the policy will cover. You must sign the application, but papers can be faxed, or sent overnight with Fedex.

    If any real estate salesman told me I did not need insurance on a rental unit, I would find another agent. If they'd lie to me about the most important aspect, I'd wonder what else they'd lie to me about.

    Note: many condo associations maintain "bricks and mortor" insurance on the buildings. That covers damage done to the building by fire, hgh winds, etc, and they usually have liability insurance for the common grounds. If you buy a condo to use as a rental. you still need to have liability insurance and insurance that covers damage to the inside of your unit.

    The insurance is very easy to buy. It's not terribly expensive. If you do get sued, you call your agent and turn it over to their lawyers.
     
  20. oregon woodsmoke

    oregon woodsmoke New Member

    Also, another quick note: you can buy "loss of income" insurance.

    That does not really guarantee that you will receive income. What it does is replace the income if your unit can not be rented due to damage that is covered by your policy.

    If your house burns down, and the insurance company covers loss by fire, and you have a loss of income rider, the insurance company replaces the lost income so you have something to pay the mortgage while the house is being repaired.

    It does not cover the time the house is vacant because one tenant moved out and you have not found another.

    It also does not cover vacant periods where you can't re-rent because the departing tenants have caused too much damage and you have to take the time to repair it. Nor if your tenants stop paying and refuse to move until they are evicted.

    I've heard of agents or sellers who try to imply that "loss of income" insurance can be purchased to guarantee a steady income. That's not true.

    When you buy insurance, it is the agent's job to explain to you what your policy covers, so make him explain it to you until you understand what it is that you are buying.

    You will also get a printed copy of your policy that outlines everything that is covered.
     
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