All Forum Posts by: Moshe H.

Hi @Jared Romaine, interesting conundrum. I can see it's a tough call. After broker's and attorney's fees and taxes you won't end up clearing much on selling the home. And if it takes a while to sell you'll also be paying taxes on an empty house, which will eat into your profits (especially in NYS!). On the other hand, a negative cash-flow house is rarely a good idea, especially for a beginning investor. Your vacancy and maintenance rates are pretty optimistic - hopefully they do turn out that way but it's possible things will end up costing you more. One thing I've heard from more seasoned investors is that a negative cash flow property might sound like a good idea in some circumstances, but in real life, boy do people get tired of writing checks to pay for something they're not seeing the benefits of right now. If your area is commutable to the City then it will appreciate eventually, but in the medium term prices might stagnate if the Fed raises interest rates. And all the smart people seem to be saying that we're near the top of the market cycle right now. My vote is I'd be leaning toward selling.

Much luck to you!

Thanks for joining in, Michael. Regarding the taxes... I'm wondering if there aren't nearby areas with similar appreciation but without Rockland's exorbitant tax rates (2nd highest in nation after Westchester). Like neighboring areas of Bergen County. I don't know what the taxes are like there.

Sound advice from Sherman (can't tag on mobile browser). Quick point - in a C neighborhood, your real cash flow may be significantly less than your pro forma, unless you're more of a proactive landlord. B neighborhood cash flow might be closer to reality, with tenants talking better care of the property. And there's a dollar value to having less drama and headaches - plus appreciation can be powerful, so don't discount that.

@Charlie Miller um... whatever you say, dude.

Chestnut ridge

Same area, Nanuet, on the other side of the border. No price filters used.

Houses in my neighborhood (within East Ramapo) have increased in value by 30% or more in the last 4 years. My home has appreciated by over $100k in value and I have the cash-out refi to prove it... so your statement that there is no appreciation in Ramapo is totally bogus.

There are 21 homes on Realtor.com in Monsey listed over $1 Million. There are ZERO in Nanuet, Pearl River, or Clarkstown... 4 in Blauvelt, 2 in West Nyack. Outliers indeed.

As I have shown, this is just an ignorant statement, although it's the type of thing that is parroted on "anti-bloc" Facebook groups all the time.

As for the scamming, Charlie, undoubtedly there is some of that and it has to be stopped no matter who is doing it. The zoning issues lie largely at the feet of Chris St. Lawrence - currently on trial - I'm no fan of his. Anyway, I'm not going to defend criminals or fraudsters, but you're totally wrong on housing values.

I find your use of scare quotes condescending. Those houses of worship are synagogues - they are attended daily for prayer services and religious study. The government gives tax breaks to churches, but we Orthodox Jews just have "too many churches" for some people's taste. There's nothing wrong with a synagogue - even one attached to a private home - being exempted from property tax under the current law. If people want to change the law, go ahead.

I once got into a discussion with a local gentleman at the mechanic. He claimed one thing that exacerbates the tax problem is when synagogues and yeshivas own other real estate that is used for housing, under the umbrella of their non-profit organization. Well, I think there should be legislation passed to stop that, or if it's not legal, the codes should be enforced. But there are always going to be a lot of houses of worship in Rockland County no matter what.

One reason East Ramapo is in financial trouble is because the NY State funding formula is broken, not because of the school board. There is now a state-appointed monitor over the school board. State Senator Carlucci recognized this and got an additional $1M from the state for the district, although it's not enough.

@Brian G. First of all, neither New City nor Nanuet are part of the East Ramapo Central School District, which is where most of the contention currently lies. It is true that more orthodox Jews (by the way, the term "Hasidics" as opposed to "Hasids" or "Hasidim" is borderline derogatory - also, by the way, many of us who live here are not Hassidic even though we are Orthodox and send our children to private schools...) are moving into those areas. However, the battle is more because the current residents don't want "us" to change the makeup of their neighborhoods - not because it has a depressing effect on property prices or because anyone is "taking over" the school district anytime soon. Quite the contrary - in areas where the Jews want to move in, it always drives up property prices. A month or two ago the second priciest property on the market in Rockland County was in Monsey, the heart of the (so-called) "ultra-orthodox" neighborhoods.

The supposed strongarm tactics to acquire homes are usually no different than anything you will read on BiggerPockets about direct marketing like mailers, phone calls and knocking on doors. Many people in Rockland county, some Jewish, use @Brandon Turner's beloved "driving for dollars" strategy to find off-market properties. But because of the inter-communal tensions here, it has become politicized. I am sure there are people who are too aggressive in their strategies, there are good and bad everywhere and I certainly would call out and criticize those individuals. However, leaving aside other market conditions, which I'm not weighing in on, I see no reason for the expansion of the orthodox community to discourage potential property investors from the region.

@Ray Harrell, why will you be back to where you started? I don't think it quite evens out like that. If you borrow $20,000 on a credit card and have to make a $450 monthly payment (making up those numbers), you do have to make sure the bank will decide your current income can cover that payment, but if it does - you now have $20k for a down payment. And after two years of owning rentals, I believe, the bank will also count rental income and even potential rental income toward your income. Lastly, this seems like it would be more of a concern for a Fannie/Freddy loan, but if you're going to do a commercial or private loan it would make it easier.

@Casey Mericle without knowing anything about it... that sounds like a loophole that wouldn't hold up in court if it really came to that. Is this a widely used strategy? Also, you'd have to convince the seller to put the asset in an entity and then sell that to you - makes things a lot more complicated.

I'm wondering if trying to obtain an unsecured business line of credit is more the way to go. Haven't looked into that option really at all, yet.

I have excellent credit and I've been getting offers from various companies to take out quite large personal loans. For example, SoFi sent me a pre-screened offer for a large loan at attractive terms. But their rules state explicitly that you cannot use the money to purchase real estate (I guess they only want you to throw money away by buying a fancy car or something rather than a sensible investment...). My question is if anyone has a company they can recommend that doesn't make you agree not to use the money to purchase real estate. I think I can do some smaller amounts with credit card "balance transfers" that you can put right into your bank account, but I'm talking about loans for larger dollar amounts.

When I was a kid, North Street was considered a "sketchy" place - now there are trendy bars and coffee places. (Just don't go too far north, there seem to be some warzone type areas around there still.) There has definitely been a measure of revitalization. I'm not local anymore but based on a little inquiry it seems like the area bordering South St. on the west is a solid place to invest in multi-family.

I now own a rental property in MA and reside out of state. My question for anyone who might be familiar with this situation is if I will owe MA personal income tax (or any other state tax) on this income?

According to a website I found:

Since I don't live in the state, nor am I employed there, it would seem I will not owe income tax to MA. My real estate is not in a trust, either. Am I missing something?

Hi @Conor Meehan I also grew up in Western MA and have recently purchased my first investment property, in North Adams. There is some good energy up there with the growing arts scene and new investments coming in ($65 million for an expansion to Mass MoCA that's just opening). @Robin First has a lot of experience investing up there and she's been helping me out.

My building (with a partner) is 4 units, three occupied and one just renovated and on the market. It's too soon to know what my real cash on cash returns are going to be but I project them at 15-20% when fully rented.