New York Real Estate Investing: Pros & Cons

Now in investing with Mortar is investing in New York. That has its pluses and minuses. What do you see as the pluses of investing in New York and what are the minuses? I mean, you throw up the average rents you're getting for these units, and it's four and $5,000. You know, you go to Indianapolis and you get four places for that price. You know. What do you see as the pluses and minuses there of New York?

Well, it's tricky. It's hard to look at New York in comparison to some cities. You know, it's funny, like during COVID I think if you invested anywhere outside of New York and California, you did great. You looked like a genius. It was a fantastic deal because New York kind of took longer to kind of recover. But generally with New York, you've got 8 million people, 8.8 million people in the, in the city. You've got a lot of different neighborhoods. You have a lot of different opportunities or different areas where you can try to find opportunities than others. You know, there's advantages in other markets, you know, but for us, I think there's stability in our neighborhoods where you, you know, there's always neighbors that are gentrifying or states or, or cities that are kind of coming up, coming up. But then they run into hard times. Cause they overbuild. Like Austin was the hot, hot city, you know, two years ago out of COVID Now it's kind of overbuilt. So for us, you know, in New York, it's kind of a more of a stabilized market. You're, you're getting what you're getting, you know what you're getting into. You, you know, your comps, they're well established. There's a large group of consultants, lenders to work with here that are willing to work in these markets. You know, I think people a little bit more hesitant on Manhattan now. It's not as shiny of a trophy asset as it used to be, especially with foreign capital. But I think that kind of comes and goes with the markets. But, you know, for some of the stuff that we're seeing now, rents have stabilized. The rents jumped from. On a one bedroom, you know, to your point, they jumped from 32 to $3,400 a month on a one bedroom to over 4,000. And it's, it's a, it's a tricky market and you know how people are managing those things. But incomes went up greatly in New York City coming out of COVID and the rents caught up. And then the, with New York City, the inability to build a lot of ground up new construction or new rental assets has kind of put pressure on rental prices to go up. Even with rates being where they are today. On the mortgage side, you're still seeing the sales market of condos pretty strong because the inventory is pretty small. There's not a lot of larger new developments that are in the works. It's just the interest rates have kind of put a kibosh on it. You know, local politics has kind of been going back and forth. So that's kind of slowed things about down a bit. So I think you're trying to find value in between these different sectors where you can really execute well. Still a lot of cash buyers out there. There's people, you know, New York is kind of notorious for the 1031s, so there's someone always selling an asset and they need to pick something up within the next, you know, four to six months. So yeah, it's very unique in comparison to some other markets. But there's a certain stability here that I think I like and investors find comfort in because you can show them data, large amounts of data. Like if we look at a deal in Williamsburg, Brooklyn, we can show them 20 other deals and how they did in different times. And you can kind of explain and walk through it a lot easier than if you're looking something on a Google map that's little bit in a secondary or tertiary city where it's harder to justify your numbers.

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