Ali, I read your book today. Not a "How to buy NYC real estate" guide, but an enjoyable read nonetheless. A few questions: 1) NJ. 2005. Real estate market is in full swing mania. Any below market offering would just be flipped by the listing agent, or one of the 1000's of agents scanning MLS on their coffee breaks. You were not looking for a turnkey foreclosure flip, but a rehab project. Do you... [more]
Ali, I read your book today. Not a "How to buy NYC real estate" guide, but an enjoyable read nonetheless.
A few questions:
1) NJ. 2005. Real estate market is in full swing mania. Any below market offering would just be flipped by the listing agent, or one of the 1000's of agents scanning MLS on their coffee breaks. You were not looking for a turnkey foreclosure flip, but a rehab project. Do you think you'd have had more luck flipping today, where there are foreclosures and short sales?
2) Your $400k beach house. You justified carrying it b/c of appreciation to $600k. Do you still own it? What's it worth now?
3) That FSBO chapter. 2006. "Narrow" apt. listed at $535k. (Sold $505k) FSBO eventually listed at $525k. What would those 2 apts generally list/sell for now in 2010?
4) $8000/mo apt. You're late by 4 mins. Why would the renter's broker stand in the way of that deal? (and his commish) Who cares? A deal is a deal, and renter wanted it.
5) First apt: The $519k apt you sold for P. to earn $6k. When people think overpaid broker, that's a good reminder that you're really only getting 50% of 50%, or 1.5%
Have you written about your brokerage/sales experiences post recession? How much have things changed in NYC since 2007, when the book was written? I'd love to hear about some contrasts to your bull market memoirs.
[less]
Response by captive914
over 15 years ago
Posts: 131
Member since: Aug 2010
I also found the comment about mortgages funny and prescient. Something along the lines of, "I am sure the big banks can take care of themselves, if they're giving you a mortgage, they know what they're doing, etc"
Ignored comment.
Unhide
Response by front_porch
over 15 years ago
Posts: 5319
Member since: Mar 2008
Hi Captive, thanks for the kind words (though I'm surprised you didn't think the book was more NYC buyer-relevant - I've had NYC people tell me that they loved reading my book before buying in the city because they loved learning the landscape!)
That's a lot of questions -- let's see:
1) Do I think I'd have more luck flipping today? Not by myself, because I think contractors always have the edge on flips because they use essentially under-the-table untaxed capital. If I ever tried it again, I'd partner with a contractor.
2) The beach house got sold for approximately $600K in fall 2008. Unfortunately by that time it hadn't been our primary residence for a little while, so we got hurt on K gains taxes. The resulting cash became the down payment for our purchase of a UWS co-op in summer 2009 (which I think may have been a bottom for the market).
We held onto our little studio condo as an investment property (if only as a way to force me, a freelancer, to save for retirement).
3) FSBO. Wow, that was a long time ago, but it looks like 2007 or 2008 was peak for prices in the building, which have held up pretty well -- looks like $525K-$575K is the range now for sold prices.
4) The market was so hot at that point that the renter's broker knew that something would get rented, resulting in a commission. There was no point in rewarding ME. (That apt. was eventually rented for a year, then sold to newlyweds, who came in without a broker, and subsequently hired me to sell their old place -- which I did).
5) Note that I made $6K on that apartment because I charged a 5% commission, not 6% -- an example of how commissions are flexible.
Everything else: I'm still doing real estate about half time, though the percentage is gradually increasing as old clients refer new clients, or people find me through Streeteasy. In my other career, I've kept writing general real estate advice on the web, currently for Learnvest.com -- a personal finance site for women in their 20s.
Book Two is probably a real estate novel, but publishing no longer pays, so it's solely a passion project. If it sees the light of day at all, probably 2012. In the meantime I might do an iPhone app or something.
As far as prescient comments, my favorite was my calling out the industry for no- and low-down payment loans, where I said "Pass the crack!"
Oh, if anyone had listened!
ali r.
DG Neary Realty
Ignored comment.
Unhide
Response by captive914
over 15 years ago
Posts: 131
Member since: Aug 2010
Thanks for the replies, Ali.
Yes, flipping via partnership with a contractor is perhaps the #1 best strategy a newbie could ever employ when attempting to get into that business. Simply for the learning curve and leveraging all his contacts (which then become yours). I am sure contractors smell some lone green corporate newbie flipper like sharks, and eat him alive.
Great sell on the $600k beach house. Always best to keep life simple, and that sounded like a white elephant in the book.
Yes, I should have said "50% of 50% of 5%", when taking into account the split b/w sellers and buyers agent and the split b/w agent and brokerage. Or, 1.25%
How come you don't have a more up to date website? FrontPorchllc.com seems a few years old.
I also found the comment about mortgages funny and prescient. Something along the lines of, "I am sure the big banks can take care of themselves, if they're giving you a mortgage, they know what they're doing, etc"
Hi Captive, thanks for the kind words (though I'm surprised you didn't think the book was more NYC buyer-relevant - I've had NYC people tell me that they loved reading my book before buying in the city because they loved learning the landscape!)
That's a lot of questions -- let's see:
1) Do I think I'd have more luck flipping today? Not by myself, because I think contractors always have the edge on flips because they use essentially under-the-table untaxed capital. If I ever tried it again, I'd partner with a contractor.
2) The beach house got sold for approximately $600K in fall 2008. Unfortunately by that time it hadn't been our primary residence for a little while, so we got hurt on K gains taxes. The resulting cash became the down payment for our purchase of a UWS co-op in summer 2009 (which I think may have been a bottom for the market).
We held onto our little studio condo as an investment property (if only as a way to force me, a freelancer, to save for retirement).
3) FSBO. Wow, that was a long time ago, but it looks like 2007 or 2008 was peak for prices in the building, which have held up pretty well -- looks like $525K-$575K is the range now for sold prices.
4) The market was so hot at that point that the renter's broker knew that something would get rented, resulting in a commission. There was no point in rewarding ME. (That apt. was eventually rented for a year, then sold to newlyweds, who came in without a broker, and subsequently hired me to sell their old place -- which I did).
5) Note that I made $6K on that apartment because I charged a 5% commission, not 6% -- an example of how commissions are flexible.
Everything else: I'm still doing real estate about half time, though the percentage is gradually increasing as old clients refer new clients, or people find me through Streeteasy. In my other career, I've kept writing general real estate advice on the web, currently for Learnvest.com -- a personal finance site for women in their 20s.
Book Two is probably a real estate novel, but publishing no longer pays, so it's solely a passion project. If it sees the light of day at all, probably 2012. In the meantime I might do an iPhone app or something.
As far as prescient comments, my favorite was my calling out the industry for no- and low-down payment loans, where I said "Pass the crack!"
Oh, if anyone had listened!
ali r.
DG Neary Realty
Thanks for the replies, Ali.
Yes, flipping via partnership with a contractor is perhaps the #1 best strategy a newbie could ever employ when attempting to get into that business. Simply for the learning curve and leveraging all his contacts (which then become yours). I am sure contractors smell some lone green corporate newbie flipper like sharks, and eat him alive.
Great sell on the $600k beach house. Always best to keep life simple, and that sounded like a white elephant in the book.
Yes, I should have said "50% of 50% of 5%", when taking into account the split b/w sellers and buyers agent and the split b/w agent and brokerage. Or, 1.25%
How come you don't have a more up to date website? FrontPorchllc.com seems a few years old.