All Forum Posts by: Daniel Maciag

Wait a couple of years and you wont be down 40%.

 What is wrong with low down payment? Is it risk of non closing due to buyer backout or appraisal issues? I imagine that either way, the seller will get all of the money after fees.

Thats what I thought too, except all of the outskirts other than JC And Newark tax on property, not on income.

2 family outskirts nyc:

-360k asking price w/12k taxes. 2bd over 2bd. 30k cash upfront. 

-1682 mortg

-1000 property tax

-100 insurance

-250 utilities

-100 for car gas.

- 0 maintenance and reno.

total monthly expense

-3133/mo

income

- 2000 rental inc. * .7 ( no city tax) = 1400 net inc.

net payment 

=3133-1400=1733/mo

Monthly payment is a lot better, but the snake is right behind the apple here.

example outside nyc: 

630/2630 = 0.239 (queens)

360/1731= 0.208 (any county outside city).

while monthly payment is lower their, most of the MYcmonthly mortgage payment goes to taxes, not to equity or interest.

this is the problem in ny. you have a Hawaii like tax haven inside and right outside you have direct opposite. its almost like they want you to leave...

Take Ozone Park for example. I saw a house last week for 630k 2bd over 1bd. Running some basic numbers.... (not conservative).

Upfront

5% down + 20k closing = 51.5k out of pocket

Monthly (best case scenario)

- 2944 Equity + Interest (4.25% rate)

- 425 property tax

- 150 insurance

- 250 utilities

- 0 maintenance

Net Total Expense

- 3769

Scenario 1, 2bd rented out, 1bd I live in

Rental Inc (Zillow est.) 

- 2150 *0.67 (income tax) = 1440 assuming 100% occupancy

My portion = 3769 -1440 = 2329 for 1bd.

Scenario 2, 1bd rented out, 2bd I live in

Rental Inc (Zillow est.) 

- 1700 *0.67 (income tax) = 1139 assuming 100% occupancy

My portion = 3769 -1139 = 2630 for 2bd.

Both 2329 and 2630 seem like ridiculous numbers to me. Everywhere else in NYC that is under 600k, is hood, and everywhere under 500k is Brownsville like hood. 

Are these numbers the new norm or are my calc's missing something important, like depreciation tax, per say?

You should read up on recession and even more so, depression. The two are very different, and in one case, you have investors jumping out windows and people dying.

In recession, you can hold through as long as fundamentals are strong. in depression or currency reset, my goodness, you will lose a lot unless you have loads of physical cash or hard metals in couch. 

@Bin Chen

I am on you with that. 3 Family conversion seems too much of a pain and cost on a mortgage.

Some areas did not rise much in NYC in this bull market, unlike much of Brooklyn. Those areas are the "can't go lower" areas. Well, right now 300k-400k 10% down on mortgage is about 20-25% Monthly Debt to income (mort+insur+taxes+PMI), so it is quite conservative, and I prefer to use my cash on other investments and for hedging purposes.

Ah let me be clear, I meant to say an hour away from say, central downtown Manhattan where most people work, which would put me in the outer boroughs, except for south Bronx, west brooklyn, and LIC.

I was looking at Bronx, but open to JC Yonkers and Newark but at that point there are too many areas to look at. I get your point though. Need to have one.

@John Hickey it's difficult to invest in one small area in nyc. nyc has extremely low inventory as does SF, directly opposite of suburbs. On a side note, there are a significant amount of overvalued homes, but no one buys them and that is why they show unsold for 2+ years on the market.

If I had to look at one area and hope for a house to come on the market, then I'd be waiting for a long long time. 

@John Hickey Would be NYC primarily. Some areas on border of good/hood places. It would be a mix of good and hood if I pick it right.