All Forum Posts by: Jason Lee

If I were a young architect I would try to purchase a primary residence that needs work. Force appreciation through the renovation, and try to flip every couple of years, get the cap gains exclusion, and repeat. Nicely designed architect renovations (even done on a limited budget) typically sell at a premium in nyc vs the typical HGTV flip reno. I'm guessing you'll have a little bit of a leg up with your experience and contacts, trade pricing, etc. Apartment renovations here are mainly cosmetic and so I wouldn't worry about entering "builder" territory. One successful flip here could net you more than several years of cash flow, plus you have to live somewhere. 

Most condos require 10% down but there are some that are FHA approved and so you can put as little as 3.5% down. Also, last year FHA introduced new condo rules. They can now spot approve individual condo units for FHA approval in condos where the entire building has not received approval. This would be for warrantable buildings only. Now just because you can find a unit that allows 3.5% down doesn't mean you will be able to find a seller that would agree to it. Most probably won't.

There are non-HDFC co-ops that allow 10% down. Some make that public, others don't. If you're struggling to make the minimum down payment at a co-op then you might not be a strong candidate for board approval. Even if they allow 10% they are still going to want you to have at least several months of housing payments in liquid assets post close.

I'm with @Jaysen Medhurst. You'll be negative cash flow, lose out on the cap gains exclusion, have to defer the taxes if you ever decide to sell. The other option is to sell close to a peak and cash out tax free. This seems like an easy decision.

You're in a tough spot. There is one real estate brokerage that will pay for renovations up front, with no interest, and get reimbursed from the proceeds of the sale. With no catch. The program is for individuals only, no LLCs, partnerships, etc. Due to uncertainty in the economy the program has been scaled back but it might work for you. You can PM me for more information.

It would probably be much easier and more cost effective to just refer these leads and have your brother collect a referral or finders fee. Otherwise it's going to be thousands of dollars in Board and MLS/RLS fees, errors and omissions insurance, etc. And then who's going to do all the showing, your brother?

@J Usmonov this info is not typically advertised publicly. I don't know that a lot of agents would know either as there are not that many of them. I know several buildings in Manhattan and a handful in Brooklyn. 

There are co-ops in NYC that can be rented out from day one as investment properties. Some are called "condops" though they are not technically condops. They are co-ops that are run using condo rules, so no board interview, they allow investors and non-US persons to purchase, etc. These trade at a slightly higher price than regular co-ops because the potential buyer pool is larger. There are also co-op sponsor units which can be sold with holder of unsold share rights which allows the purchaser to rent out the unit indefinitely as long as they don't occupy the unit. Then there are regular co-ops that allow investors to purchase. Many of these are non-warrantable buildings because the concentration of investors is too high or a single shareholder owns too many units in the co-op. Financing can be tough in these buildings, particularly now. Then there are co-ops that have an unlimited sublet policy after a year or two of ownership. There aren't that many of these around but they can make nice investment properties if you plan to owner occupy initially. Not necessarily advocating for co-op investments but you asked. Yes, ideally you'd get a condo, but the prices for condos are significantly higher.

A lot depends on what you consider "commutable" and what you consider "decent cash flow." NYC and surrounding areas are very high cost with typically very good appreciation, but what most would consider not very good for cash flow. Are you planning to live there as well or just want the type of tenant class that commutes to NYC? Do you need positive cash flow or are you ok offsetting some (but not all) of your housing expense?

There is a lot of misinformation here. An accepted offer does not place you in contract, there is no attorney review letter, NY is not like NJ, depending on where in NYC it's not customary to have a binder and there is no earnest money... It's not rocket science but if you don't know, you don't know.

An accepted offer is not binding and earnest money isn’t customary in NYC. You typically deliver a 10% deposit along with the signed contract. The deal isn’t protected until the seller accepts your deposit and executes the contract. That usually takes a week or two from an accepted offer. You’ll want to schedule an inspection during that time so anything that comes up can be addressed in the contract prior to your signing.