All Forum Posts by: Jason Lee

Actually as the rent price points go higher in NYC we look for even higher incomes proportionally, typically 40-50x the monthly rent. You might have to go lower but I'd start at 40x and see what you get. As mentioned above you have to do some tenant screening leg work (verify timely rent payments, call landlord references, etc) and run credit and background through one of the screening services. I second Smartmove and you can have the tenants pay for it directly in lieu of an application fee.

If you're trying to make a minimal down payment it's not likely you'll see positive cash flow but the rental income will offset some of your living expenses. If the property is in or close to NYC then you'll benefit from future appreciation. How old are your kids? If they're elementary or middle then school zone and proximity might be a priority and somewhat limit your search areas. 

I've had prospective tenants use SmartMove and pay for it themselves. On top of that there are some other things you can do screen:

Get a landlord reference and actually check it. Also verify the "landlord" owns the property.

Get verification for several months of rent payments (bank statements, cancelled checks, etc) so you can see if they make timely payments.

All this is going to be a lot easier than you taking the time to investigate each tenant yourself.

Both have their cons. Aside from evictions, NJ is much more tenant friendly when it comes to lease renewals. In NJ, you must offer a renewal and any changes must be "reasonable" and rent increases can't be "unconscionable." In NY you don't have to offer a renewal and you can make whatever changes you want. This is for non-stabilized leases.

I'm not sure I'd ever move from NY to NJ because it might be more favorable to landlords. You might be better served reviewing your tenant screening process and seeing how you can more reliably secure better tenants.

If you're looking to flip then it could make sense to cash out in a high cost area like Queens, or you could perhaps tap the equity in that house to fund future flips.

Most co-ops don't allow investors to purchase (although I have one coming up soon in Brooklyn that does allow open subletting). Often the ones that do are non-warrantable, which means it will be more difficult to get a mortgage, which is also something that is not good for an investment. FYI mine will be warrantable.

There are not that many FHA approved condos to begin with. If you did find one, a requirement of FHA is that it's a primary residence and so it can't be used by investors unless it's a house hack. Even if you could, no condo in and around the NYC metro area will cash flow with 3.5% down. You normally have to make a significant down payment to see cash flow around here. This area is an appreciation play. If you're looking for cash flow you'll have to look further outside the city. A lot really depends on your budget and goals.

Welcome to BP! We could use more info. Where will you be living or will you occupy one of the units, will you self manage, do you want to renovate, etc? What's more important, cash flow or appreciation? If you provide your desired goals it will be easier to provide more targeted suggestions. 

Where in Brooklyn?  Can you force more appreciation by converting to 2 family and adding sq ft?

I'm guessing this is Downtown? If so, YOY Q1 median condo prices are down -3%, days on market are up, and 2 bed inventory is up. It appears we are past the most current peak. Median 2 bed Downtown rent is down -5% YOY and inventory of all rentals is up a whopping 28% (I don't see a breakdown for just 2 beds). Does that yield include vacancy and capex? I'd also take into account what you plan to do with the proceeds and also if you get the cap gains exclusion. If it's between selling now or anytime within the next several years I would probably sell now. 

@Nima S. There was no impact on the rate that I saw. It looked very competitive even though you're locked into only a couple of lenders.

You seem overly focussed on what others are bidding. You and your agent should determine what you think the fair market value of each apartment is and bid accordingly. If you've been looking for close to a year and you're outbid every time then it's clear you are bidding too low and not willing to bid market price. No one is going to tell you what the other offers are but it's obvious you are lower than all the other bidders and/or under what the sellers are willing to do a deal at. What is your agent telling you?