let’s talk : BINGHAMTON,NY

Good morning!

Last week we chatted about opportunity zones, and I mentioned to you that I was working to further invest in Binghamton,NY. I am sure a lot of you are wondering WHY BINGHAMTON? So, I thought I would use this week to tell you!

So, as we do, let’s talk real estate, let’s talk BINGHAMTON, NY…

Now, I want to start here by saying I 100% cannot take credit for deciding to invest in Binghamton. A few months back I partnered up with two guys who had already purchased a home in Binghamton, and essentially “sold” me on the city. So, let me tell you about the property that started it all (sweet little “Tiny Home”) and what I have come to learn about the city, and its housing market.

WHERE IS BINGHAMTON, NY?

Binghamton is located ~3 hours west of New York City along-ish the NY / PA border, where the Susquehanna and Chenango Rivers meet – HELLO pretty real estate.

QUICK HISTORY

Binghamton was named after William Bingham, a wealthy banker in Philadelphia who loved the land. Joshua Whitney, a Binghamton local, basically designed the first city plan and marketed it to the outsiders. Eventually the Chenango Canal was created, to work in conjunction with the Erie Canal and open up business to the outside. Although the canal itself never turned a profit, it brought in a ton of settlers and businesses. Later on the railroad came to town officially turning Binghamton into a transportation hub. The city manufactured everything from guns & ammunition for the Civil War, to cigars, shoes, clocks. It was even home to the birth of IBM!  This was the land of opportunity! Literally it was nicknamed the “Valley of Opportunity” . There were plenty of jobs to be had, until there wasn’t… A big part of Binghamton business had been developing defense products for war needs, however after the Cold War ended, the market no longer saw a need for these national defense businesses and as the jobs left so did the people. This trend continued, the average household income could not keep up with inflation and the downward spiral began.

Okay so I am obviously REALLY skipping over some serious historical facts here but my point is BINGHAMTON HAS BEEN HISTORICALLY HOT and I think it will get back there. Obviously I am not a psychic and I cannot tell you that it will 100% get back to the powerhouse it once was, but I can tell you that I believe it is on the UP and here is why!

THE HOUSING MARKET

The median home price in Binghamton, NY is  ~$100,000 (vs National median price $210k), and the average monthly rent is $1,300/ month. Okay YOU GUYS with those two statistics alone you HAVE to be intrigued. Now, I am giving you AVERAGE statistics here but we are finding properties for much less than that. Let me walk you through a real life Binghamton scenario that we have seen.

Deal Overview
Purchase Price : $25,000
Down Payment: $10,000

Monthly Revenue
Monthly Rent: $955

Monthly Expenses
Mortgage & Interest: $233
Property Management: $95
Taxes: $95
Insurance : $61
Miscellaneous: $145
Total Monthly Expenses: $630

Total Monthly Income: $325
Total Annual Income: $3,900

This means it would take you just ~ 2.5 years to re-coup your investment, without taking into account any appreciation…. DONE DEAL.

NOW I AM SURE YOU ARE WONDERING… WHAT IS GOING ON HERE?

From what we can tell, Binghamton has seriously suffered from economic downturns. The exodus of major employers and loss of jobs left the region crippled for years BUT things look like they could be finally leveling out, and forecasts are optimisitic!  In 2015 the state announced the Urban Revitalization Initiative in which the Southern Tier was awarded funding to re-build the region through the re-development of distressed communities and investment in innovation. The project would leverage $2.5B of private investments and create 10,000+ jobs between 2015-2020. The Southern Tier region’s plan focuses on 4 key initiatives;

  1. Building the Greater Binghamton Innovation Ecosystem
  2. Investing in the Advanced Manufacturing Industry
  3. Transforming the Food and Agriculture Industry
  4. Promoting the Southern Tier’s Innovative Culture.

What does this really mean? Well the initiative is working to fund projects such as a new bike trail for students and residents to safely commute on, the revitalization of 3D printing, a program that is looking to enhance the way batteries store and use energy, the development of new mixed-use properties (commercial & residential space), etc. The local universities are reaping the benefits of the revitalization project as well. For example, Binghamton University is currently building brand new Nursing and Pharmacy schools in Johnson City (part of Greater Binghamton area), both set to open in the next two years. This will open more space on Binghamton University’s main campus for the school to roll out new programs. The overall goal of these projects is to reshape the image of the region, and become a center for innovation, prosperity and a strong sense of community.

And NOW, outside of all of this, the Southern Tier Region has been nominated as a potential Opportunity Zone – making it even MORE enticing to outside investors (re: last week’s blog post on Opportunity Zones).

Beyond all that, the downtown Binghamton area could be proof alone that things are on the up, and can in fact turn around. Ten years ago Binghamton was a “ghost town”(words of a local not my own!), and today it is bustling, lively and charming. I even found a cute brewery down there I loved – Galaxy Brewing Co (& I don’t even really like beer).

Now are these all not good indicators that BETTER times SHOULD be ahead??

(knocking on wood as I write this – but seriously, come on)

Feel free to comment on the blog post HERE and let us know what YOU think!

p.s. you know that property analysis I walked you through up there? That’s our sweet “Tiny Home” – you can check out a pic of it on this week’s blog post!

Happy Wednesday!

Erin

 

All data and information provided in this email is for informational purposes only. This email makes no representations as to accuracy, completeness, suitability, or validity of any information and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use. All information is provided on an as-is basis.

 

Data Sources for today’s content:

http://www.binghamton-ny.gov/history

https://www.pressconnects.com/story/money/2017/08/10/progress-noted-binghamtons-economy/557026001/

http://www.bestplaces.net/economy/city/new_york/binghamton

https://www.bls.gov/eag/eag.ny_binghamton_msa.htm

https://www.binghamton.edu/blog/index.php/blog/story/14015/upstate-revitalization-initiative-how-will-this-funding-affect-binghamton/

https://www.pressconnects.com/story/sponsor-story/the-agency/2017/08/30/binghamton-city-full-opportunity/105076396/

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