All Forum Posts by: Jason Lee

Tenant's haven't always historically paid the broker's fee. Some landlords always pay, some don't. When it's a landlord's market more tenant's pay. When it's a tenant's market more landlord's pay. Guess which market we're in now? My system can only return 500 listings max per search and I can see 500 rental listings in Brooklyn where the landlord is paying... same in Manhattan. You decide all the answers to your questions and put them in the exclusive listing agreement. Your broker should be helping you figure out the best strategy in this market, and should be able to explain how the net effective rent stacks up against your comps, etc. 

@Basit Siddiqi I think they mean Manhattan. The average rent not including concessions was $4,144 in May. Median was $3,546.

I'm no attorney and this is not legal advice. As far as I know you can't issue a time of essence letter until after the on or about closing date has passed and the buyer gets a "reasonable" delay. To me 6 months is not a reasonable delay. To me it sounds like you could at some point send the time of essence, require the buyer to perform, and either cancel the contract or keep the deposit. I find most transaction attorneys either don't want to, or don't know how to, work on deals that go sideways outside the normal transaction. Find one that does. I've had clients send time of essence and keep deposits.

I should speak to an estate attorney to see if the trust qualifies for the cap gains exclusion. I would also speak to an accountant to figure out the tax consequence if it doesn't qualify. If it's only been a couple years then you would only owe tax on the gain within those years (minus the capital improvement costs) since you got the house at the stepped up basis. Depending on where and what the property is, the cap gains could be quite small, or none at all.

What are the current tenants like? Have they been there long term? Do they still have their jobs and are they still paying rent on time? Despite cries of the sky is falling, the majority of rents were paid in May and the ones that weren't were at the lower end. Where is the house located and at what price points are the rents? If you think you're going to lose sleep at night you have the opportunity to sell at the stepped up basis.

@Twana Rasoul Compass in the house!

Sales volume is down, pending sales are down, the number of buyers is down, but inventory is also way down. There's not much for you to choose from. In your budget it's mostly older buildings and walk ups, maybe a few conversions, but it's going to be tough to find something new, even if you consider studios (which I would probably lean away from). If you like JC and Hoboken there aren't that many other "similar" nearby towns in that radius. There are nice towns, but not as walkable and with different kinds of amenities.

Sales were down 52% in May but median sales price was up 5% YOY. Things seem to be improving and June numbers should be better. 314 contracts signed and 288 properties sold in the last 7 days. Again, that's with lockdown, some buildings not allowing moves, and Realtors not allowed to show.

This is absolutely doable. 1.5 hour radius is a pretty big area and you should be able to find plenty of deals that can work. Biggest mistake I see is investors being initially drawn to areas where the numbers are more attractive. It's a house hack so you're going to have to want to live and commute from there. I'd first find towns/cities that you can see yourselves living in and then work backwards from there.

Many of my exclusive listings started out as FSBOs. In most of those cases I was able to sell the apartments quickly and for a higher sales price than it had been listed for by the owner. It's about marketing, access, and vetting buyers (for a co-op). The average FSBO seller can't do it better than the average realtor, let alone an experienced top performer. You're admittedly going to have trouble providing access. As for vetting buyers, many brokers screw up co-op board packages, so it's not uncommon for FSBO co-op deals to fall apart or end up with board turn downs based on things that could have been flagged early on. You're trying to save on the broker fee but you could easily end up paying more in tuition attempting this on your own. You don't know what you don't know.

The problem with this strategy in NYC is that 80% LTV on a condo will not cash flow here. When you get to around 50% LTV you'll start to cash flow and that doesn't take into account any vacancy, repairs, etc. This strategy will only work in areas where the cost to rent vs buy is in equilibrium.