If you plan to live there and commute to Manhattan, my recommendation within New York State is Queens or potentially, Brooklyn. If you are looking purely for an investment, my recommendation is upstate New York, where I own a couple of multi-family properties that do well. In fact I believe upstate New York is one of the top 5 places in the USA for investment for cash flow. (I also own in Georgia and suburban Detroit, which are also good investments for me, but not as good).
Understand that if you are buying purely as an investment, in most cases "a small amount down" is not going to be possible. You would need to have sterling credit and high income, and even then it would be tough in the current lending market.
So, if you want to get into this kind of investment, buying a 2-family or 3-family you also will live in would be the far easier path.
Karla Harby, VP
Anna's direction is right on. Find out what your borrowing capacity is and then match that up against your goals. What does profitable mean to you?
Depending on your personal investing experience and knowledge you may already know that In real esate investing, what appears more profitable is likely to have higher risk. The area might be more transient, school deteriation, developement or other external factors may increase vacancy risk. On the other hand, a property in an area with no new detractions might appear to cash flow quite easily, but with the 35 year old windows, inefficient furnace, and roof nearing the end of its life the need for repairs can complicate or prohibit a deal. By considering your tolerance for risk you will be able to guide yourself better or interact with professionals who can seek out offerings that match your goals.