All Forum Posts by: Amit Kal

@Avery Carl - wow that's a home run purchase! 

Did you pick up that $125k property significantly below market or just off MLS and just got lucky buying the right location where there were enough recent comps to justify the appreciation?

I have been watching a few folks I know do this for a few years now. First thing is to identify a neighborhood that is gentrifying. 10 years ago my friend set his sights on Crown Heights and started buying everything he could those first 4-5 years. He raised about $50 million over those ten years, with maybe $4-$5 million being his own invested capital. They've tripled (or more) their investments in that time. 

Now they are in East Flatbush and some select ares of the South Bronx. And another guy is in Jamaica Queens doing this same. 

Good luck

It's much easier if you have access to folks willing to lend you money. And then you need to find a great deal. And then you need to borrow more money to rehab the place. And then sell it for a price that makes you profit and you can pay back all your loans. Then repeat. Several times until you have a big enough nut to start doing buy and holds.

YES

And that's an inherent problem in this industry @Russell Brazil. So much collusion to not disrupt the status quo. Weak and non-effective ethics/standards boards. Clients interests placed way behind others when it should be first. 

I know many have tried and not done too well as yet, but I'm still holding my breath with the hopes that an amazon type comes in and finally disrupts things a bit. 

Please enlighten me @Russell Brazil under what grounds should a sellers agent refuse to business with a broker who does not have (nor need) MLS access?

A lot of very good points here, especially by Steven Kopstein who nails it on the head for how complicated NYC can be and why agents do earn their commissions. Now I'm not a licensed agent but I do have quite a few anecdotes about how agents and others that work in the industry here put up huge roadblocks to maintain the status quo. The profits here are vast and any challenge to the establishment or efforts to create competition and transparency will be met by entrenched mafia-like backlash. 1. Last year I tried to FSBO a 2-family home that I own in Queens. I advertised that I would pay a 2.5% commission to any agent that brought a buyer. Truth of the matter was that buyers agents were pressured by their agencies to steer their clients away from my property if their clients asked about it. This drastically reduced my pool of potential buyers. And because NYC is a complicated market to operate within, buyers tend to rely on agents so they usually sign exclusive agreements to only purchase properties with that agent. 2. A very good friend of mine with a sizable real estate portfolio is also a licensed broker. Our common friend was looking for a $2.5m+ home in Long Island so my broker friend said he would help him find a home and represent him. The problem was the listing brokers did not want to work with my broker friend and were willing to let a qualified buyer walk. Why? The story that were stating is that they only co-broke with MLS brokers. That is absurd because it is perfectly legal to pay a licensed broker in NYS. Those agents in LI were simply placing their financial gains and maintaining status quo over their clients interests. 3. The title business in New York is also very scammy. Because lawyers don't get paid out sized commissions the way agents do, the unspoken secret is that lawyers direct title business to title companies who usually compensate lawyers in one form or another. While selling that 2-family house I mentioned above, I told my attorney that I would like to direct the title business to someone I knew. When the buyers agent found out about this they were willing to call off the entire deal. They actually scared the buyer by telling them that the title agency I wanted to direct the business to was not a solid title company. Pure hogwash but they did what they needed to do to keep the title business within their own circle. Kicksbacks? Of course. It's big business and many entrenched politicians have their hand in it. https://mobile.nytimes.com/2015/05/12/opinion/the-title-insurance-scam.html 4. Rentals. In NYC, The fee almost always is paid by the renter to the agent, not by the landlord. Many, many landlords with sizable portfolios are now able to hand out these juicy well paying commission jobs to friends and family without paying them out of their own pocket. Agents HATE no fee rental listings. What they have done to muddy the waters on this front is they post a huge amount of bogus ads in order to frustrate renters looking for no fee listings. As Steven Kopstein said most renters are very busy and once they waste a few evenings or a weekend because of several bogus listings, they will usually relent and end up renting a apartment with a fee.

@Leo K. and @Josh Braun - just wanted to thank you both for the very helpful information you provided here. I got rehired after a six month layoff (best time of my life, esp since I was collecting severance and have a baby boy at home) and now that I have a solid W-2 paycheck coming in, I am back to talking to lenders again. Your advice here will help tremendously as I sort through various loan options. 

Yes max it out and max out HSA and transit plan (all pre-tax). And then max out employee stock purchase plan (10% of salary). Then put another 10% of post-tax money into my brokerage account. And then use about $2k per check for expenses. And with whatever's leftover I use for real estate. I do this because I'm already too overweight in real estate.

@Luka Milicevic 

Zip is 37216, 800 sq ft

Same tenant since we bought the place. Rent started @ $875 in 2015, then $925 in 2016 and just today re-signed tenant to one year more @ $950