Manhattan Real Estate Investing

[Gerry Attard]

How can I afford to buy a 1 or 2 bedroom condo in a good area of Manhattan and get a really great deal? I'm trying to think out of the box. I built my own home on the north shore of Long Island as a general contractor and lived there for 21 years before moving to Scottsdale, AZ where I currently live. I'm interested in bank owned properties, estates sales, foreclosures, handyman specials etc. Can someone please help me with some ideas and advice? Both my children live in N.Y. and my wife and I would like to live closer to them without going bankrupt.
I look forward to hearing from you.
Gerry

[Sebastien B.]

Simple answer?? You wont.

I am the adviser/consultant/agent to an investment fund centered on new york assets. I know my way around the city's real estate opportunities, and I try all the angles.

I will tell you that if you are looking for cashflow or a cheap deal that requires a little bit of work and is worth the investment, you wont find it.

If you want below market, you are going to have to do the following:

1. Buy Big/Develop
2. Buy Rent regulated.

I really don't recommend either unless you have the money and/or patience to take such risks.

Manhattan is all about appreciation and value add. You buy a great asset for a 4% cap rate, dump tons of money in renovations and tenant negotiations, and in 5-10 years you sell for 2-5x your investment. This is usually how the market here works.

That being said, you really don't want to go through the manhattan condo renovation process with anything but bulk/regulated apartments. Find something that is in decent shape and hold on to it.

The UES has generally been seen as a long-term growth asset with strong inherent value. It's a safe and mature market with stable demand. High quality buildings are abound.

The UWS is more popular with less generational wealth and young prfessionals. This will be the next UES as the new wealth becomes generational. I think the market here is under priced compared to its future value, but buildings like 15 CPW are quickly changing that.

The West Village is trendy and expensive, but I just don't see the inherent value of the location unless you are very social and own a townhouse. (It is also more flood prone). Owning here seems more like a fashion accessory than a living investment.

East village is relatively hip and cheap, but you are stuck in the value trap. There is too much space left to develop before prices really start going higher. Most of the inventory is lower quality. It's basically the west village sans the lack of development space.

Soho has high value and high price, but is also very trendy. I see a lot of growth in that area as the laws become more favorable to non-artists. There are so few development spaces that prices are going to skyrocket over time. The apartments are usually high quality and roomy (they were built to house manufacturing).

Tribeca/hudson square is okay, but I really don't understand the appeal. It seems a little too plastic to me. Something about it makes me feel confused. It's pretty "secluded" compared to the rest of the city. I think it will be a great neighborhood once the rest of the city below canal develops. Until then? Overpriced.

Fidi is currently junk and worth next to nothing. However, you can find the best deals there. Find a huge condo under $500/foot and you are pretty golden.