There are two basic approaches to a fix and flip strategy. The first, which was very popular at the start of this approach to real estate investing, is to purchase a property before the area in general experiences an increase in prices. This is a classic “buy low, sell high” strategy that depends on correctly anticipating a market.
The second approach is to add value to a property through renovations and repairs and quickly realize that value by selling the property. This is the approach popularized in TV shows. This strategy depends on identifying specific properties with specific problems that can be solved relatively quickly and which add value in excess of the cost of repairs.
Either of these approaches can work in the New York City area. Every neighborhood has individual buildings that have the potential for a value added approach, but finding them is a challenge. Watching the general market is easier, but carries the additional risk of being late to the party. With those approaches and warnings in mind, here are three neighborhoods in New York City that deserve the attention of fix and flip investors.
This north-central part of Queens is the most diverse part of a very diverse borough. According to Census data, about half the area self-identifies as Latino and another 20% as Asian. This brings in the range of restaurants and shops that make a neighborhood attractive. In addition, the area has a range of older buildings that are ripe for renovation. Plus, it is well served by public transportation. This is an important consideration in the New York City market where private car ownership is lower than average.
Riverdale Apartment Fix and Flip
Located in the northwest corner of the Bronx, this enclave might not fit the image of a fix and flip because of its expensive suburban-style homes near private schools. However, it also has an abundance of apartment stock that is 50 to 75 years old. The typical one-bedroom space has over 700 square feet and offers amenities like dining alcoves, elevators and downstairs laundries. Public transportation is more limited but still sufficient.
This neighborhood is undergoing a massive capital improvement project with a new Cornell University campus opening this fall. New residential construction is accompanying the campus along with a hotel, restaurants and shops. Older housing stock will likely enjoy a boost from all this development when the construction dust settles. Roosevelt Island is notoriously inconvenient and so fails the public transportation test, but the volume of development might make this a moot point. In addition, a new ferry route opens in August of this year, and other connections are being proposed.
All of these neighborhoods are already experiencing activity in the fix and flip market, but still have potential housing stock that has not been rehabbed. Focusing a search on any of them may be very beneficial for the fix and flip investor. Finding the right building would combine both approaches and produce a healthy investment return.