Thought experiment...help me spend my money

this genius would get a $1.5MM/yr job.. :)

Seriously, keep saving up for the next 2 yrs... do the hamptons first (as that is much more discretionary and will fall faster farther) then pick up UES when hamptons is paid off... that way if "sh-t" hits fan and you get laid off or you decide to not work (which is the goal, right?) you'll get rental income from hamptons.

In that case, worst case scenario... commute from hamptons or move family there and get yourself a nice 1bdrm rental in NYC for weekdays... Never understood the female genes' need to own? :)

The gene is the dumbass nesting thing!..plus, leaving the fam in the Hamptons give you plenty of "space" for some underappreciated city trim midweek.

Appreciate patient09 comments but still happily married at this time... no female nesting desires here, just looking to create generational wealth during this historic downturn. Happy to reside in my rental until the time is right.

just funnin: 67 has it right. A long time wise man told me about 18 months ago his view on "vested" NYers and how the weak would be purged. He was spot on. Similarly told in Vanity Fair 3 months ago. In order; discretionary spending gone, vacation home, jewelry, art, try to downsize NY apt, anything except take the kids out of private school. If you are determined to be all of your 3. permanent NYer, UES and Hmptn. Then move on the weak and illiquid first. You can always rent on UES for many years to come.

Where did you find a 1700 sq ft rental for $5,500/mos?

EAO - that was hard work. spent at least a hundred wasted hrs on street easy looking to buy over last 3 years while dating, marrying, and waiting it out in 1bdrm with pregnant wife and newborn. immigrant style filled with great memories but not for the faint of heart 5th generation entitled class that seems to fill east coast. present place fell into my lap as building owners had opening in another building. bottom line, sweetheart deal that I wouldn't hold hopes out for repeating; especially since equivalents seem to be going for 7000+. I view it as reward for enduring/enjoying life WELL below our means for many years.

Hi Adam. I would absolutely go with a primary residence in the UES before the Hamptons. I am assuming you are looking for something at least 1700 sf? If you play it right, you will find something under $2M. If you can pay cash, you will have more leverage to negotiate....

I don't disagree on "vested" New Yorkers, but how many will bail given the structural changes we have/will see? I would keep an eye on the Manhattan/Hamptons spread to decide where to move first.

I am a non-vested New Yorker who has temporarily retreated to my bunker while keeping his second home.

Are you nuts, AR? You are aware that 863 Park has NO takers at 1.85m... If adamsmith is patient, should be able to get 1700 sqft for under 1m.

I agree with above posters that better deals will be had in the Hamptons in the near term, but if you are ultimately going to buy a coop, you might not want to have that on your balance sheet -- at least if you plan to take a mortgage out on the 2nd place. It might be a good reason to buy in town first.

nyc - you are seriously trying to say that you think an inhabitable 1700 sf apt will be under $600 psf? not gonna happen. I have been working with buyers who are making low-ball offers much higher than that and getting nowhere.

thanks kas242 for that insightful point regarding passing the coop board... as for the math that might justify a move, a 1700sqft 3bdrm would have to cost around 1 million dollars for it to make financial sense to move. of course I'm not factoring all of the important intangible stuff like the prestige of ownership (useful at "the housewives of NYC" parties) or the wisdom gained by residing next to savants who have bid up the cost of housing over the past few years by spending their parents money on a bubble asset

AgentRachel: "nyc - you are seriously trying to say that you think an inhabitable 1700 sf apt will be under $600 psf? not gonna happen. I have been working with buyers who are making low-ball offers much higher than that and getting nowhere."

Oh, AgentRachel, I think that's exactly what he's saying. You can try to keep the dream alive, but you won't be able to suck 6% out of over-inflated sales for too much longer.

slope - things are still selling for far more than that. don't you check recorded sales? not everyone HAS to sell. Most don't actually.

Everyone who owns (like me) knows that the market is bad. Why on earth would I put my place on the market unless I had to, or found another property? We were briefly around 900/sqft here on the UWS (actual transactions) and we may be headed lower.

many reasons nyc. 1) They have to relocate and can't sublet 2) Bought another place already 3) need more/less space due to births, deaths, divorce, etc...

Um, that's covered under "unless I had to" which means ahem, those sellers are under the greatest pressure and will force prices down. Why are you so bullish?

thank you nyc10023. this is what the "people don't have to sell" crowd doesn't understand. there is a natural supply created by the three ds: death, divorce, and debt. that supply keeps coming in good times and bad--and of course the debt gets worse in a recession. people are not putting their apartments on the market for the hell of it in the worst housing downturn since the great depression.

Hold on a second, if you make $1 million a year, why do you only have $1 million in savings? What the heck are you spending your money on? Assuming you have been earning $1 million a yaer for the last 5 years, you should have at least $2-$3 million in savings. Until you can get your finances in order, you should not be buying anything!

agentrachel,

thanks for proving nyc10023's point. divorce, death, already bought another place, relocation and can't sublet...sounds like people who HAVE TO SELL.

yes, but not all of these people are desperate. for example, you will keep a child in a 1 bed for a couple years rather than take much less than you paid for it. otherwise, these sellers would have taken our low-ball offers.

agentrachel,

can you read your previous post again? you keep contradicting yourself. you mentioned death. what are people going to do, come back to life? i mean, an estate won't take the first lowball offer that walks through the door, just like a growing family won't or a divorce won't. but eventually they will have to accept some offer. or divorce. are they going to get back together to save the apartment? if they get fired and relocated to charlotte, are they going to give up the new job to try their luck in the new york job market?

the point is, just because they won't take the first offer that comes by doesn't mean they don't have to sell. it means they are holding out for something better for the time being.

alpine - wrong assumptions. $1 million cash does not equal total savings... also already spent some savings on prime mixed use 2nd home some years ago

Adam--sounds like you're in a great position to bide your time and then pounce when you find the right deal.

One caution, though--you haven't said what your line of biz is but keep in mind that virtually NO job today is completely 'recession proof'. Of course, if you happen to be the bennie of a large trust, that might change things...

I agree with the poster who pointed out the potential downside of owning a second home if you're trying to pass a co-op board--they do get nervous when prospective owners already carry mortgages. Of course, if you could swing purchasing said second home with cash that'd be another story...

I also found the $5500 1700SF 3-bedroom almost too good to be true, unless the neighborhood is so-so or worse. Stranger things have happened, of course.

My bigger question is - what job pays $1MM/year and is recession proof?

As for the advice, I agree that it makes no sense whatsoever for you to pay more than $1MM for the same size apartment that you have now. Furthermore, you were talking about buying a "permanent" residence. With a growing family and solid financials, why would you buy a 1700SF place for a permanent resident. I would think at least 2500-3000SF, maybe more, depending on just how much the family is growing.

Oh, and if legit 1700SF apartments can be had for $1MM in the not-too-distant future, I'm in. We'd avoid the mansion tax and get a conforming mortgage.

you're not a NYC buyer. If you want to buy in the Hamptons, I'd suggest calling Michael Daly at True North, he's been working the Hamptons for many years and is a great buyers' broker.

ali r.
{downtown (Manhattan) broker}

To those that question the size/location of my pad... I'm was just sitting in my 40ft living/dining room looking at the east river; now I am typing from my 20x12 2nd bdrm (made the master a playroom for baby) looking over brownstone and mid rise rooftops to the Time Warner Center and 15 CPW. Believe me I also thought it was too good to be true when I found it but I expect this to become the new normal. Porch, not sure why I'm not a NYC buyer... I've got a graduate education, help people for a living, donate to charity... come to think of it... I live well below my means, drive a 1980's SUV, married a poor but exquisite midwesterner met serendipitiously (not prearranged or the result of some marrying up scheme) vote for personal responsibility, and don't worry about mispellings/typos on anonimous blogs - guess I'm not a NYC buyer after all. Thanks for the hamptons lead. As for those out there looking to buyvsrent I suspect my situation is not unique - furthermore, I'm no genius when it comes to real estate matters. Allow me to suggest you resist the conjob marketing being done by the buy now condo folks, and instead do your homework... you'll soon find yourself in over 2000 sqft for less than I pay. The invisible hand will soon be tightening its grip on the throats of the fast money crowd. Good Luck

adam,

I don't think you're an NYC buyer because I don't see how it makes financial sense to move from your sweet pad. . . not questioning your education (I'm Harvard '87), rather respecting it and your ability to run the numbers, along with my belief that you're not going to get a sales deal that would be competitive with where you live now.

The East End, however . . .

good luck!

ali r.
{downtown broker}

adam smith,

is your name actually adam smith? because your situation sounds very much like a friend mine named...adam smith. anyway, i was wondering if it's the same person, and then i saw the thing about already owning a vacation home and that made me pretty sure. if your wife's initials are mc....

anyway, small world.

Hey I want my on-line persona back... you're just a stiffer version of me on the east side. No way dude.. give itz back!

I'm writing this from a jail cell.. so it follows you are in one too... what you in for? me a little mortgage fraud... :)

$1MM... dude do like $1.04MM or something... well it just sounds too made up... I forget what I did... maybe $700K... see how that sounds real.

happy - not the same dude... but the coincidence suggests there are others out there in similar situations and I suspect we will be increasing in number in the near future

67 - havent read enought of the streeteasy boards to lock in on your online persona... pretty sure there is room for me and my brotha from anotha mutha... agree on the UES stiff comment... but you cant beat the 10 min walk to work commute... easy enough to catch a cab to cafe noir and such

as for this thread, the point was to pose a thought experiment regarding the best way to capitalize on the present downturn given my current financial status, not to shout out loud that I'm a luck man. agree with the overall sentiment that it will be hard to beat my current NYC situation and that there is no need to make a move in the forseable future... with this in mind will focus on hamptons looking to make a move on a distressed property

years from now may consider a 2 family townhouse with rental income

"years from now may consider a 2 family townhouse with rental income"

same here, but in my case, only once i get a better feeling of what's going to happen with property taxes. the public pensions are going to be so out of wack within the next few years it's going to be scary.

1700 sq ft for $5500 is entirely beleivable. Especially if you are close to the East River (i.e., York/1st ave). A good friend of mine just signed a lease on a MINT conditioned (and I mean great renovations for a sale much less a rental) apartment that is over 2,000 sq ft in north chelsea for $6,500/month.

adamsmith, are you in a Glenwood building? We've seen 1400-1500 SF apartments at the Somerset for around $5K, making your deal more believable. Great views, too. Way, way too far east for us, but obviously very individual.