Foreclosure in New York>Question Details

Tqeisi, Home Buyer in New York, NY

hi, i have 600,000usd to buy three units and rent them out. whats the net rental return after outgoings and tax. as i am an australian.

Asked by Tqeisi, New York, NY Mon Mar 21, 2011

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Hello Tqeisi,

What areas did you have in mind? You will also have to go with a condo or fee simple property. There are multiple areas outside of Manhattan, or even NJ that offer great value for a multi family home you are looking for. I am a licensed NY State Assistant Appraiser who can hel you break down income statements for your proposed income producing unit, and find you the property that gives you the capitalization or return rate you are comfortable with for your investment. Please feel free to reach out to me.

Jennifer Chiongbian
SVP
Rutenberg Realty
917-250-2284
jennifer@chiongbian.com
0 votes Thank Flag Link Mon Mar 21, 2011
If you are planning on financing your purchases, you will need at least 20% down payment plus closing costs. A link to closing costs is provided below. You should also be aware that when selling these units down the link you will be charged a tax called FIRPTA. FIRPTA requires buyers of U.S. real property interests to withhold 10% of the sales price. The seller may apply to the IRS to reduce this 10% to the amount of tax estimated to be due. The IRS routinely and quickly approves such seller applications. It is important to use a local Real Estate Attorney who has experience with working foreign buyers like yourself to get an explantion of what your liability could be down the line. I would be happy to refer you to one or two.

Next you will want to ask yourself how long will you be holding these properties, are you investing long term say for 10-20 years? While the market has depreciated in NYC since 2008, prices are level and in some neighborhoods they are rebounding slowly, with the emphasis on slowly. We may see a 2-5% yearly gain over the next 5-10 years.

Getting a positive cash flow, with 20% down is not always an easy task. The median sales price in Manhattan is $846,000, obtaining 3 units for $600,000 cash without financing will be a daunting task. The good news is interest rates are very low, but since you are not financing a primary home, one that you are living in, you may not get the best rates and may need to put more than 20% down on each unit. I can also reccomend a local mortgage banker who is best qualified to assist in discussing the current lending criterea for investors. It is also important prior to executing a contract to qualify the building in the sence of investor saturation. If there are too many non owner occupied units in a particular building, financing will be limited. I would be happy to discuss this further with you and see how I may be of assistance.

Regards,
David Drake
Prudential Douglas Elliman
ddrake@elliman.com
1 vote Thank Flag Link Tue Mar 22, 2011
Hi Tqeisi
As a fellow Australian who currently lives in NY I hear where you're coming from. For obvious reasons this is very attractive to Australians.
First up, as already mentioned here, you need to know your exit strategy. Is this short term or long term hold? Are you looking for cash flow? Probably not. Seems like you are thinking capital gains in the long term to me. I suggest you find a good lawyer who understands the tax implications both here in the US and for you as an Australian. Do you currently reside in Australia or elsewhere? I have a NY based law firm who specialises in just this kind of transaction as I have been working with others like yourself looking to make hay while the sun is shining.
If I had $600k in cash, I'd use it as a deposit on the three apartments you are hoping to acquire. There are banks that will provide up to 65% LTV and I'm more than happy to make the introductions for you. As you do not indicate whether this is your limit, I'll leave it at that. If this is your limit, however, and you still wish to follow this route, I would suggest looking in either upper Manhattan, such as Harlem, or in Brooklyn neighbourhoods such as East Williamsburg or even Bushwick.
While these areas may not be in trophy areas, they are in your budget. With $600k you can really only afford one, maybe two properties, however this will be a stretch. I would suggest one and keeping reserve funds for common charges, taxes and unforeseen expenses. Returns are around 6% give or take. Doesn't sound so great unless you understand the potential upside - and again, I'm sure you do.
As a final note, the foreclosure crisis has not affected New York City as much as it has others such as Detroit, Phoenix, and much of Florida. You will be hard pressed to find such 'deals' here as many savvy buyers recognise the inherent strength of the market. It is a global capital of media, technology. art, fashion, finance and learning. Many corporations are based here and consequently, demand has only slowed, not ground to a halt.
All the best with your hunt.
0 votes Thank Flag Link Wed Mar 23, 2011
Hello T. My colleague Mr. Drake is right on the money with his response. I will stress that your dollar amount is not enough for the prime Manhattan markets. You may find that even in the boroughs you'll be hard pressed to find three units within your budget.

Another thing to consider is that Coop are not good investment vehicles as boards make it difficult to sublet. Condo are the better investment but again, your on hand cash is a problem as Condo outprice similarly sized Coops by well more that $100k. You may find that you'll need to consider Studios rather than one bedroom apts if you want to make this work but again, your dollar amount is working against you. Good luck.
0 votes Thank Flag Link Tue Mar 22, 2011
Hi Tqeisi,

Many of us brokers have various skill sets and ideas to how to best assist you. I think you should contact a few and work with one you feel most comfortable with. That said, I have many options that I can assist you with in acquiring property but I need to know your exit strategy or help you develop one to maximize your purchasing power and profits. Thanks for posting this question and I look forward to hearing from you soon. Feel free to email, call or text message.


Regards,


Nedvonn Young

|Licensed Real Estate Salesperson

Platinum Properties New York
30 Wall Street, 11th Floor |New York, NY 10005
T (212)825-0050 |C (347)853-9173|F (212)825-0053

Platinum Properties Paris
101 Avenue des Champs Elysées| Paris, France75 008
T +33 (0) 1 56 52 91 60 |F +33 (0) 1 56 52 90 90
nyoung@pp-nyc.com | Click here to view my listing



http://www.renthop.com/managers/4354

"The greatest compliment I could receive is a Referral"
0 votes Thank Flag Link Mon Mar 21, 2011
Not sure your question can be accurately answered, too much missing information--did you have an area(s) in mind for the purchase, are you looking for houses or condos, etc........
0 votes Thank Flag Link Mon Mar 21, 2011
It would be my pleasure to go to work for you on an exclusive basis,I am a licenced broker/associate broker/investment specialist in 2 states for more than 30years.I've helped hundreds in passed years and ready to help you.You may contact me at your earliest convenience.



Gary N Beydoun,Licensed NY/MI RE. Broker
Senior Vice President at Level Group
370 Lexington Ave.24th Floor,NY. NY.10017
Email:gary@levelgroup.com
Web http://:www.levelgroup.com/garybeydoun
http://www.linkedin.com/pub/garybeydoun/20/b05/5a9
http://www.twitter.com/garybeydoun
Direct: 646-284-3777 Office:212-994-9965 Fax:212-994-9967
0 votes Thank Flag Link Mon Mar 21, 2011
Dear Tqeisi,

I will need more information to give you an more accurate answer. The net rental return depends on the type of property that you purchase and if it is a 3 unit condo/coop or a three family property.

Please give me a call to discuss further. I know that there are some great properties of interest to you in the Bronx that are completely renovated and vacant that will offer a great return on your investment.

Nirmala Caraballo
Licensed Real Estate Agent
Cruse Realty
1408 White Plains Road
Bronx, NY 10462
Tel.: 646-479-7873
Email: nhcaraballo@yahoo.com
0 votes Thank Flag Link Mon Mar 21, 2011
Hello Tqeisi,

Where do you wish to buy these three units?
The price and the rental will all depend on the location...
Please contact me to discuss at fhamberger@citi-habitats.com
I am a sr associate broker and I am associated with Citi-habitats.
I am a hybrid agent, ie.e I do both renatls and sales.
I help my clients buy and I do help them rent their property right after. can discuss your requirements.
So please contact me at fhamberger@citi-habitats.com
Fern Hamberger
Sr Asso Broker
fhamberger@citi-habitats.com
Citi-habitats Relocation
646-660-0060
0 votes Thank Flag Link Mon Mar 21, 2011
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