New York City or South Florida?

10 Replies

Hey everyone,

I've been working for flippers/developers in NYC since September. I talk to homeowners and bring them deals. Kind of like a Wholesaler, but no putting anything under contract and I have one buyer. I haven't closed even one deal since. Granted, I could've worked harder, but many times I came home at 8-8:30 PM from knocking on doors. I almost never started at 10 AM though I generally started between 11:30-1:30. But still, even seven hours a day of calling/knocking on doors is pretty good. I also never worked Sundays or Fridays. Anyway, I haven't been successful. 

I had a few deals where a price was agreed upon, but it fell through for different reasons. One deal we had an agreed-upon price, but then someone put up a higher offer. On another deal, I became really good friends with the guy, but he had a much higher offer. If we could match it he would've gone with us because he likes us more. A different one, there was a deed restriction which most probably would've been taken off (we spoke to a lawyer who worked on this specific property and he said that), but my bosses didn't want to risk it. I had another deal which was a JV deal (a developer had a lot in Central/West Harlem and we were going to build a house on it which would cost $1,200,000 to build and we would sell the house for 3.2-3.5 Million dollars, but he didn't want to add my boss to the deed and my boss wasn't going to invest all that money with no guarantee on the property whatsoever. Another deal I became friends with the lady who owned the property. We were going to do a JV with her; she would give the lot and we were going to build around 13-14 condos on the property which we would then sell at $700 per SQFT. My boss told her that she would come out with 1.85 Million dollars for her share. I think this was a low offer and she actually got mad at me and told me to stop texting her.

I have one deal that will hopefully happen, but at this point, I'm not banking on anything. Another JV deal. If this happens, we are going to build 10 condos and sell them for $700 per SQFT.

I met this guy my first week on the job. He was supposed to come in for a meeting two weeks later, but he didn't show. It was hard to get in touch with him; he wasn't answering my calls, and I had no idea where he lived. So I called his mother-in-law's house. He got very upset at me and he said we're not doing a deal. I calmed him down until he said call me in two days. I did and he didn't answer. I couldn't get in touch with him for a while after that until the beginning of December. He randomly answered the phone, so I told him how about a JV. He started talking about how I shouldn't have called his family etc. So I said, "let's start fresh." He said, "ok, call me in January." I called him in January and it was like it never happened. We spoke on the phone for almost an hour about everything from Dogecoin to the federal reserve. He agreed to meet on Zoom the following week. From there we became friends. We spoke on the phone, he wants me to list a rental for him, he wants me to find him a contractor and he'll give me a third of the property. He's renovating one of his houses and he wants me to list it for him for sale when he's done, which should be in about three weeks. Anyway, he's a great guy. After he sells this house, or after he finishes renovating it, I'm not sure which he wants to do this JV with us. G-d willing, it'll go through. I'm going to get for this if it happens 15K now, and 10K when the condos are sold in 1.5-2 years from now. I also stand to make money from the other things that he wants me to do for him. I made some developer contacts in NY, which I can hopefully bring them some deals (probably won't happen).

Anyway, suffice to say, that in the last seven months, besides for the last guy, I haven't been successful. And who knows if I'll even make any money from the last guy, and If I do, when. My father in Florida wants me to move to Florida. He'll introduce me to some flippers that he knows that he invested money with and whom he trusts. He doesn't like my bosses, he thinks that it's ridiculous that nothing came out of my seven months in NY and he thinks that they're suspicious. If I go to Florida, I won't have any expenses, besides gas and random things that I'll buy. In NY, I pay rent, $400 a month because I share a basement with friends, and food, which at the least is $200 a month and most probably more, like $400 a month on food. I also pay for gas, car insurance, and random things. In Florida, I'll save at least $800 a month, probably $1,000 a month, and I'll also work part-time in my Dad's synagogue. SO, I'll have money coming in always, no expenses, and a much better market in Florida. Also, I plan on living in Florida in the future, so I would start my future now. I would start building up in Florida.

My boss offered me my own team of two-three guys to work under me and he's raising my commission. 3% off every deal that I bring, and a minimum of 20K. Any deal that the guys under me bring in, I can take what I want from it. So, if I want to give them a flat rate of 10K for every deal they bring and take the rest for myself, that's fine. Also, he claims that NY is coming back and it already started. The worst thing about NY until now was the eviction moratorium. Foreclosures didn't mean much here the entire time that I was working. That's almost over. He thinks that NY could be big, and big for me. 

What should I do? Go to Florida with no expenses and a booming market, or stay here with expenses and maybe a big market coming, but with a nice commission on every deal (and every deal in NY is big)? 

P.S. My work ethic is going to have to change wherever I am, but in NY I live with four friends, so It's hard to get to sleep on time. No guarantee that that will change in Florida, but it'll be easier to change if I want. I can also change here, of course, and I will, but it'll be a little harder.

New York. The Fed has printed so much money and that has been reflected across all asset markets with a few exceptions, NYC being one of them. It is time for a catch up and it will catch up. 

Personally, I am very bullish on New York and NYC itself. Sure it suffered due to COVID, but you want to buy when there is distress. I think all the folks who moved away are already getting bored and already coming back. Plus, the vaccine is getting rolled out which will curb the spread tremendously. Now is the time to buy.

Cap rates came all the way down to 3% (or below!) during the "boom" times but COVID has loosened everything up and now 5% can be had in Manhattan, 6%-7% in Brooklyn and even 8% in the Bronx. Nationwide rates hit a low of 2.7% - so there has really never been a better time "spread" wise.

Long term, I think NYC will come back as it always has time and time again. I am also a great believer in investing when there is distress and deploying capital when you can.

If you are looking for yield in the short run, Manhattan may not be for you. However, it is certainly the most attractive it has been in years from a cash flow perspective. If you are seeking out asset accumulation and equity appreciation over the long term then there are certainly fortunes to be made. And there is still plenty of cash flow opportunities in the outer boroughs if you buy right!

@Alexander Szikla 

I'm not personally buying right now; I'm broke. I'm bringing deals to flippers. 

But, in regards to the cap rate in Manhattan, I came across a deal in East Harlem that was 8-8.5% NOI, plus 10,000 more SQFT buildable. Are you buying in East Harlem?

Originally posted by @Mendel Spalter :

@Alexander Szikla 

I'm not personally buying right now; I'm broke. I'm bringing deals to flippers. 

But, in regards to the cap rate in Manhattan, I came across a deal in East Harlem that was 8-8.5% NOI, plus 10,000 more SQFT buildable. Are you buying in East Harlem?

If that's a true cap rate, send it over to me.  I'd take a look at it.

Hey Mendel,

i was looking at Florida market and its very hard to find deals there, market is crazy and everything is sealing above asking...

i know nyc market and still get deals, prices are up and properties are selling fast. there is place for you too. don't forget it takes time to close deals in nyc.  good luck.

Originally posted by @Mendel Spalter :

Hey everyone,

I've been working for flippers/developers in NYC since September. I talk to homeowners and bring them deals. Kind of like a Wholesaler, but no putting anything under contract and I have one buyer. I haven't closed even one deal since. Granted, I could've worked harder, but many times I came home at 8-8:30 PM from knocking on doors. I almost never started at 10 AM though I generally started between 11:30-1:30. But still, even seven hours a day of calling/knocking on doors is pretty good. I also never worked Sundays or Fridays. Anyway, I haven't been successful. 

I had a few deals where a price was agreed upon, but it fell through for different reasons. One deal we had an agreed-upon price, but then someone put up a higher offer. On another deal, I became really good friends with the guy, but he had a much higher offer. If we could match it he would've gone with us because he likes us more. A different one, there was a deed restriction which most probably would've been taken off (we spoke to a lawyer who worked on this specific property and he said that), but my bosses didn't want to risk it. I had another deal which was a JV deal (a developer had a lot in Central/West Harlem and we were going to build a house on it which would cost $1,200,000 to build and we would sell the house for 3.2-3.5 Million dollars, but he didn't want to add my boss to the deed and my boss wasn't going to invest all that money with no guarantee on the property whatsoever. Another deal I became friends with the lady who owned the property. We were going to do a JV with her; she would give the lot and we were going to build around 13-14 condos on the property which we would then sell at $700 per SQFT. My boss told her that she would come out with 1.85 Million dollars for her share. I think this was a low offer and she actually got mad at me and told me to stop texting her.

I have one deal that will hopefully happen, but at this point, I'm not banking on anything. Another JV deal. If this happens, we are going to build 10 condos and sell them for $700 per SQFT.

I met this guy my first week on the job. He was supposed to come in for a meeting two weeks later, but he didn't show. It was hard to get in touch with him; he wasn't answering my calls, and I had no idea where he lived. So I called his mother-in-law's house. He got very upset at me and he said we're not doing a deal. I calmed him down until he said call me in two days. I did and he didn't answer. I couldn't get in touch with him for a while after that until the beginning of December. He randomly answered the phone, so I told him how about a JV. He started talking about how I shouldn't have called his family etc. So I said, "let's start fresh." He said, "ok, call me in January." I called him in January and it was like it never happened. We spoke on the phone for almost an hour about everything from Dogecoin to the federal reserve. He agreed to meet on Zoom the following week. From there we became friends. We spoke on the phone, he wants me to list a rental for him, he wants me to find him a contractor and he'll give me a third of the property. He's renovating one of his houses and he wants me to list it for him for sale when he's done, which should be in about three weeks. Anyway, he's a great guy. After he sells this house, or after he finishes renovating it, I'm not sure which he wants to do this JV with us. G-d willing, it'll go through. I'm going to get for this if it happens 15K now, and 10K when the condos are sold in 1.5-2 years from now. I also stand to make money from the other things that he wants me to do for him. I made some developer contacts in NY, which I can hopefully bring them some deals (probably won't happen).

Anyway, suffice to say, that in the last seven months, besides for the last guy, I haven't been successful. And who knows if I'll even make any money from the last guy, and If I do, when. My father in Florida wants me to move to Florida. He'll introduce me to some flippers that he knows that he invested money with and whom he trusts. He doesn't like my bosses, he thinks that it's ridiculous that nothing came out of my seven months in NY and he thinks that they're suspicious. If I go to Florida, I won't have any expenses, besides gas and random things that I'll buy. In NY, I pay rent, $400 a month because I share a basement with friends, and food, which at the least is $200 a month and most probably more, like $400 a month on food. I also pay for gas, car insurance, and random things. In Florida, I'll save at least $800 a month, probably $1,000 a month, and I'll also work part-time in my Dad's synagogue. SO, I'll have money coming in always, no expenses, and a much better market in Florida. Also, I plan on living in Florida in the future, so I would start my future now. I would start building up in Florida.

My boss offered me my own team of two-three guys to work under me and he's raising my commission. 3% off every deal that I bring, and a minimum of 20K. Any deal that the guys under me bring in, I can take what I want from it. So, if I want to give them a flat rate of 10K for every deal they bring and take the rest for myself, that's fine. Also, he claims that NY is coming back and it already started. The worst thing about NY until now was the eviction moratorium. Foreclosures didn't mean much here the entire time that I was working. That's almost over. He thinks that NY could be big, and big for me. 

What should I do? Go to Florida with no expenses and a booming market, or stay here with expenses and maybe a big market coming, but with a nice commission on every deal (and every deal in NY is big)? 

P.S. My work ethic is going to have to change wherever I am, but in NY I live with four friends, so It's hard to get to sleep on time. No guarantee that that will change in Florida, but it'll be easier to change if I want. I can also change here, of course, and I will, but it'll be a little harder.

It's good to have you here Mendel!

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