SHOULD YOU INVEST IN SYRACUSE, NY?

I have been wanting to make a post about investing in the Syracuse area for quite some time because it seems a lot of people are quite worried about dropping some cash in this market but I can not recommend a Syracuse investment enough. Syracuse is a special kind of city, it does not necessarily have a booming job market, no huge expansion plans, nothing amazing on the horizon. It is however a very stable market. Job growth has been slow but very consistent since 2010, but that doesn’t matter because your Syracuse real estate investment is going to be catered to renting to low income families.

SECTION 8 Rental Investing

The benefits to renting to section 8 tenants are many, most landlords want to avoid bringing on section 8 tenants as much as possible and I understand your desire to do so. Renting to tenants that are low income and require government assistance is usually indicative of other negative aspects of renting; poor credit, potential drug use, people moving in and out that aren’t on the lease, and they don’t usually care about the property they’re staying in.

Section 8 rentals are just one part of the investment plan for Syracuse but before I move forward and highlight the other tactics, I’d like to solve the problems I have presented above.

Consistent & On Time Payments: Tenants that are on section 8 have their rent costs either paid in full or subsidized by the government. This means, every month you can expect your on time payment from your tenant.

No Evictions For Drugs: Section 8 is provided by HUD and one of their requirements are that section 8 vouchers can not be granted to anyone who has been evicted within the last 3 years for DRUG RELATED or CRIMINAL activity. You must still do your typical background however.

Rent Crappy Houses: Look, no one is looking to be a slumlord but you’re here to make money. You’re not here to provide luxury living to those who can’t afford it. You can rent pretty crappy houses to section 8 tenants. Sure, HUD had requirements as to what are acceptable living conditions but to be frank, they’re not hard to meet.

High Rent For Low Quality: Since your rent is guaranteed and the waiting list for section 8 housing is miles long, in some counties the wait list is well over a year. You can charge a little bit more for your rental than you would be able to if you were renting to someone who was paying their own way. You don’t need to feel guilty about increasing the rent either, you’re doing extra work to meet certain criteria for the tenants than would typically be required by another landlord that was not working within the confines of the Section 8 program.

Okay, So Why Syracuse?

So I have shown you the benefits of section 8 renting but what does this have to do with the Syracuse area? Syracuse has a massive amount of properties that are ridiculously cheap. I just closed on a house in the suburbs of Syracuse for $15,000, $35k repair, $130k ARV on a one month flip. I had a friend of mine selling another house inside the city of Syracuse for $3,000 with a $20k repair and an ARV of $70k or rent at $900/month.

There is a stigma about investing in Syracuse for those in the Syracuse area. They DO NOT want to do it. The city is quite literally giving abandoned properties away for investors via the “Syracuse Landbank” project in an effort to revitalize the area. Why though? Why are there cheap properties and why are some being given away for free and why do the locals not want to invest?

It can be a massive headache, a lot of the properties are in low income neighborhoods within the city. There can be drugs, bad tenants, hard to collect rent, hard to evict tenants. The local investors here have no shortage of properties in better areas. You too could invest in safer areas in surrounding Syracuse but you could find similar deals in other states.

You’re here, reading this post because you want the best ROI, you want cheap properties, and you want great cash flow. How do you overcome the problems I have outlined above? Especially when you’re out of state and you can’t be bother baby-sitting everything or stressing out about your property.

You absolutely need a boots on the ground, hard hitting, no BS property management company. These aren’t companies you’re going to find on google, if you’re calling in and you get a receptionist or you need to fill out a contact form; then you have the wrong company. There are a handful of excellent management companies up here that can make your investment truly passive income.

HOW DO I MAKE MONEY? 

Okay, let’s now pretend you bought your $22,000 house and you’re sitting behind your computer screen wondering how to make money with it. There are a few options.

FLIP AS TURN KEY RENTAL – Buy the house, hire a contractor, remodel it, place a tenant, and sell it as a turn key rental investment to an out of state investor.

FLIP TO FIRST TIME HOME BUYER  w/ Mortgage – Buy the house, hire a contractor, remodel it, make sure your contractor understand FHA lending requirements, and sell it to a first time home buyer

FLIP TO FIRST TIME HOME BUYER Hold Mortgage – Same as the above, though you have some benefits here but also some more regulations. Tenant pays a larger down payment, a larger monthly bill to pay the principal balance, rent, and taxes. Operates like a rental but tenants take better care of a property they feel they own in most cases.

BUY & HOLD – Of course you can buy and hold it for yourself. Hire a contractor to bring it up to the rental rate you’d like to reach and then rent it out and have your kick-ass property manager take care of it for you.

HOW DO I DO ALL OF THIS? 

Reach out to an investor savvy agent or broker familiar with the area; they will have a list of great contractors, wholesalers, property managers, and other investors that are willing to help you out. Please feel free to reach out to me as well, I am a General Contractor, real estate investor and property manager and have a great list of people that I can connect you with.

If you do choose to reach out to me for advice, please let me know what you’d like to know or what your plans are so I know how to respond in the best and quickest way. I can only buy so many houses in the area myself and I am excited to help as many people find great investments here while also bringing value to the city.