Fliperati

Picking a place to make your first real estate investment is the subject of many “how to” and “wealth building” seminars on flipping, but I’ve found that hardly any of the existing authors of these materials are in the northeast.  Is it too cold here for any of these real estate barons to spend their time, or is it impossible to make a profit in this region for some undisclosed reason?  I certainly hope it’s not the latter.

Undeterred by the dearth of published media and unwilling to leave Manhattan for Phoenix, Las Vegas, Palm Springs or Naples (offensive to my urban sensibilities), I’ve begun exploring the greater New York metropolitan area in search of the perfect ‘hood for my first flip.  I haven’t settled on a location yet, but you can find a distillation of my thoughts to-date after the jump.

-          New Jersey.  Although Jersey is generally just a large, state-like repository for the disdain/ire of “true” New Yorkers, this was the first place that came to mind when I started thinking about rehabbing run down homes.  I think this is primarily because I generally visualize the traditional concept of an American single family home when I think about New Jersey neighborhoods (detached house, driveway, [small] yard).  If I end up going the suburban house route, I think a Bergen County neighborhood near Manhattan is a safe bet because proximity to the city will always be a selling point for these homes.  Consequently, I have been exploring neighborhoods like Cliffside Park, Leonia and Palisades Park actively looking for run-down homes at fair prices.  My primary concern is that I don’t fully understand the market for a newly renovated home in these neighborhoods because some of the highest-priced homes I’ve seen sold tend to be very reminiscent of something you would see in The Sopranos or Growing up Gotti.  Without digressing into a slew of likely un-PC remarks about the cause of this trend, I’ll simply say that I think the buyers in this market may be looking for something different than what I would consider “nice.”  However, making a downtrodden home clean and livable should be able to generate a profit anywhere as long as I keep it neutral, so Jersey is still on the list.  (I haven’t visited Leonia yet but it seems like a great neighborhood with lots of nice old homes ripe for flipping)

-          Harlem.  Harlem would be an excellent place to invest if I had a time machine and could go back to the early 2000’s when property was actually vaguely affordable here.  While I’m quite optimistic about the neighborhood’s long-term prospects, it seems to be an over-speculated market at the moment and I really can’t afford anything desirable within my $300,000 – 450,000 target price range.  From the few trips I’ve made to explore the neighborhood (granted, not a huge dataset here), those prices just don’t seem justifiable to me.  Not that I felt [terribly] unsafe weaving my way through the 110’s and 120’s from El Barrio to Morningside Heights, but I did see a small drug deal go down five minutes after I got off the subway.  Stories like this don’t help either.  I’m still keeping my eyes open for a good deal in this area, but not terribly hopeful.  Even better would be a run-down condo near Columbia / Morningside Heights, but I’m probably dreaming…

-          Astoria.  Haven’t been out to visit yet, but I have a few friends that claim Astoria is THE place to be (don’t we all?).  It’s close to midtown, which is nice, and there’s definitely a lot of character.  Perhaps worthy of further research.  Or even a visit to that friend.

-          Forest Hills.  I had a co-worker that talked endlessly about how nice Forest Hills is and, from what I can tell from her descriptions and a variety of satellite photos, parts of it seem fairly suburban.  That would make it a nice alternative to Bergen County, with express subway service making the commute from midtown easy (but sans charming ferry rides).  However, it seems like it’d be an insufferably long commute if the express trains aren’t running and property seems pretty pricey there as well.  There may or may not be a strong market for nice property here – I just need to do more research.

-          Greenpoint / Williamsburg.  While I definitely felt out of place walking along Bedford Avenue in my generic sneakers, unremarkable jeans, print-free grey t-shirt and my recently trimmed/washed hair, I could easily see myself fixing-up an apartment or two in this hood.  There seems to be a good volume of fliptastic properties and, based on the strong reception some of the new developments have gotten, I have a good feeling about where this market is heading.  The problem is actually locating a flippable property in this hood and relying on the L train to get me there on a regular basis.  Or wait – is a sinking Williamsburg market the bigger problem?  Schizophrenia anyone??

-          Boreum Hill, Cobble Hill, Carroll Gardens (BoCoCa).  I’ve spent lots of time around the Smith Street and Bergen Street areas and this is definitely a great neighborhood.  Also, the locals are awesome in their non-judgementalness and mild-manneredness.  Can I afford it? 

-          South Bronx (“SoBro”).  There’s been lots of buzz about SoBro being the next up-and-coming borough, but I’m not sure if I’m ready to take the plunge.  Property here is definitely affordable, so it might be a low-barrier place to start investing but I need to spend some time walking around the area to make sure I feel safe first.

-          Bushwick.  See SoBro.