All Forum Posts by: Patrick M.

@Justin Thorpe I don't think we go back to the NYC of the 80's. That time has passed, but I think it is equally foolish to think that we go back to the NYC of 2019. Things are evolving... There are too many very, very disruptive pieces in play. If you feel I am unfairly highlighting the negative, I understand. I have cited numerous articles so that you can see I am not just basing this on personal experiences, like you and others.

But, personally, yes- I have witnessed numerous people who fled the city and were absolutely astounded on what they could rent for half of what they were paying for a 450 sq. ft. closet. That they could spend the same amount of time commuting, but be comfortably seated and get a head start on the days work. Friends who watched in horror as streets and hotels were turned into lawless assembling places for the drug addicted and untreated, mentally ill. These are people who were and are heavily invested in the city. They felt ashamed to have to leave it- but each day it seemed as if they were being dared to leave by a city government which took their concerns as seriously as some of the Baghdad Bobs in this thread.

Yes, rentals are up- There is a huge clearance sale on them. C tenants are moving into B buildings. Yes property is selling- again, everything is right now (see my other references).

But to close your eyes to the very real struggles that the city is facing, and assuming you will go back to 2019 is foolish, and it also ensures the election of another incompetent mayor.

You say an "uptick" in crime? What? Try a 97% increase in shootings! A 45% increase in murders! And the city has absolutely no appetite for the policing that turned it around in the 1990's.

"uptick"! 

""Yes, Hello Mrs. Abernathy, there is going to be a slight uptick in your rent this year... yes, I am doubling it."

Own it, so you can fix it.

I do a far better job by following my market on Zillow, on a weekly/bi-weekly basis, then any algorithm can. You know your markets, your streets, the complexes and multi-families.

Also my markets rents are increasing at a faster clip then they can gauge.  

I think it depends an awful lot on how you came to be where you are and what real estate has provided you. And also, when you want to retire!

I got into RE for the purpose of supplementing my w-2. It has done that and then some. I have a very healthy 401k which I fully fund each year (thanks to RE) and I also have a pension (that mythical beast). I would hope to retire in another 14 years.

If I keep my buildings I will be partially retired. Each year it becomes easier and easier to manage from a distance... but you are still in the game. This will be a tough call. With that being said, I believe I could sell the buildings a decade from now and put the proceeds into an index fund and use that to supplement my income with a conservative withdraw rate that would exceed my current Net. With my other revenue streams, I would not have to touch this in a down market. But... if you want to make God laugh, tell him what your plans are!

Right now- six years- on I am still very much in the honeymoon phase. I love my buildings, I love the tenants that I placed, and I love having a monthly stream of cash that allows my family to, very comfortably; take trips, save for college, pay for private school and turn down purchases for every other reason except the price.

If I had to rely on just one of those 3 (4 if SS is still around) revenue streams I would feel very exposed and I would not be able to experience all of the things I hope to in retirement.

So no.

BTW, if RE is providing for you and you are doing well I would highly recommend diversifying perhaps throwing some cash into an equity index (VTSAX), especially if you have some years to go. I also do that ;)

@Justin Thorpe I actually said protests... 

I find it amusing that you and others only see it as black or white... the hyperbolic "obituaries" doesn't reflect what may very well happen.

1970-80's NYC was a hotbed of artistic activity. It was also full of opportunity for property investors. Unfortunately It was riddled with crime and it was not a family vacation destination. But it thrives in other areas.

Even under the current partial lockdown/ quarantine, more guns were taken off the street in January this year then last! 

Gun violence, at a time when there are less people out, is at a 14 year high! That and having your kids exposed to THC and belligerent homeless is not a welcome mat.

@Justin Thorpe, the 2 are not mutually exclusive. There will be a lot of NYer's who will be very content with the increased space and affordability of the burbs and a longer commute will not matter if they don't have to go into the office or go in twice a week. There will be people returning to the city as well, and they will find that whereas they could only afford an apartment in the outer boroughs, with months of free rent and amenities, they can live in Manhattan.

But these are just some of the considerations. Will their day to day be upended by protests when there is an officer related shooting in some other state? How will the city deal with it's homeless problem and crime as it moves away from traditional policing? 

I will say that the city is certainly doing a wonderful job of welcoming marijuana smokers, you can't turn a corner without being inundated with the stench. It may hurt family tourism, but help millennial tourism? A homeless man screaming obesities at passerby's may be an attraction for the TikTok crew.

It will be different.

@Carl C. Wow! One of the reasons I relied heavily on hyperlink citations and repeatedly said that I wish the best is so that someone who is assessing this on such an emotional level would see that my observations were objective. I say again- I wish the best for the city, I love it and have spent much of my life there. Now I know how those luxury tower people felt when the complained publicly!

I think their is a big gap between your hysterics, "news of our demise," and my objective observation that the city will return but it will be different. If I could predict what that would be then I would be a billionaire. There are a number of factors at play, which I listed before, all well documented.

I am in the city often. Yes it still exists. Yes we continue to love it and hope for the best... But it is barely even a shadow of its former self.

As the NY Times, its biggest cheerleader, pointed out a couple days ago- it is starting to look like a city out of Blade Runner, an interesting article about the current dystopia like environment.

Adrian Benepe, the former New York City Parks Commissioner and current head of the Brooklyn Botanic Garden, sees “creeping Blade Runner syndrome” everywhere, from the clogged skies over Manhattan to the subways, which he rides to work every day from his home on the Upper West Side.

“They’re empty,” Mr. Benepe said. “I’ve been alone many times at rush hour. It’s eerie as hell.” He also finds the movie prescient in its depiction of a world saturated by intrusive, omnipresent advertising.

“Places in New York that used to not have advertising now have ads,” he said. “You can’t get away from it. It’s in the subways, it’s on the streets, it’s on barges. You never stop being assailed.”

Giant screens are nothing new, of course. But New York’s streetscape had been permeated as never before with twitchy, adhesively catchy LEDs, a trend that has only accelerated during the pandemic, with the Metropolitan Transportation Authority announcing last summer the addition of 9,000 screens broadcasting “Covid-relevant safety information.”

“There is advertising everywhere, and it’s a bit of sensory overload,” said Ben Kallos, a City Council member who represents Manhattan’s East Side. Mr. Kallos said LinkNYC, the network of 1,800 sidewalk kiosks around the city providing free Wi-Fi as well as block after block of eye-level digital content, “is pushing the boundary” when it comes to “the amount of advertising people are willing to take.”
...

Some parts of Midtown are incontestably gloomy, such as along Lexington Avenue in the 40s, where mannequins seem to outnumber humans, space-helmeted bicyclists swerve around heaps of garbage, and like a jellyfish glowing undersea, any gleam of life only underscores the vacuum.

We had a bond trader leave last summer- but we knew they were going to buy after they got married.

Another young, married couple who want to buy in the area and told us as much when we rented to them, have found the skyrocketting market is a no go. Houses are being snatched up with less than a week on the market, well over the moronic agents' asking prices.

@Jessica Perrizo 

1. 9/11 was a horrific event which had huge physical and emotional consequences. But many downtown survivors were simply shifted to mid-town or over to Jersey City. Many at the bigger firms back to work in a week and supporting the micro-economies of those areas. It was not anything like this on many levels.

2a. If real estate was not selling in NYC it would not make any sense. There is more money on the street than people can find a use for. Game Stop is back above $250, Bitcoin is over $60,000 and some jackass just bought a .jpg image with an NFT attached to it for $69 million dollars. It's opening bid was $100. People are devouring assets, and far more riskier ones then real estate. What is surprising is that people are letting it go for so cheap.

2b. Why in god's name agents are running around bragging about selling above asking, I have no clue. It demonstrates a level of laziness and incompetence for not knowing what your market is. If I had a property manager come to me and say, "Boy, I listed your rental at market and numerous prospective tenants came in the first day offering more!" I would fire him, because he would not have known what the market is. We have homes on the market here for max, 1 week, they all go for over asking. And the incompetent agents keep slapping each other on the back. (I hold agents on this forum, like all of us collectively learning, in high regard)

But the subject of this thread is based on landlords who are manipulating the market by warehousing apartments. And even with that- taking hundred of apartments off of the market- rents are down. And this doesn't even include the free months of rent and other amenities. And, hoping your renters of B class rentals get along with people who otherwise could not afford to live there.

“I think we need to be clear: This is not a recovery, this is an early step in the right direction,” he said. “Even with some metrics showing improvement, they’re still terrible.”


 

I read the NY Times and the WSJ daily. @Justin Thorpe is incorrect to say that we should pay no mind to this because it is clickbait. This is actually an article which ran in the WSJ earlier this week.

I am happy to hear from @Carl C. that things are back to normal in NYC. I must be going into a different city. The city where I am going has retail reducing or doing away with it's footprint, restaurants which were institutions are permanently shuttered While I appreciate his opinion, I never make it a practice of relying on a salesman's pitch. And as an investor in NYC, he is a salesman (as we all are to some degree in our markets).

There is a great article in NY Times that came out earlier this year on the nightmare of owning in those tall luxury condos that are shooting up in the city. Read it, you will never be happier that you are not stupid rich, emphasis on stupid. One thing they emphasize is that  the people who had the balls to publicly complain where ostracized by other owners because they would adversely affect resale value if everyone knew what a disaster they were.

So when an investor in NYC says, "move along, nothing to see here... everything is back to normal..." I don't take it at face value. And that is not because I wish them bad- it is because I am a well read person who also happens to have personally experienced that that is not the case.

Now, yes, NYC will be back... but I say again- it will be different. There are a number of interesting factors at play.

Rents are being discounted. Those who are renting are making B properties affordable to C tenants... and it trickles down. 

It took decades for NYC to get to where it was in 2019... and that was actively trying. It took a lot of capital, but it also took a number of policing initiatives which are now deemed unconstitutional. When the liberal, successful families who live in the nicer sections called the police in the spring because relocated, homeless men were masturbating in front of their children the progressives shrieked at them: "How dare you judge that poor man!" This was a game changer for many of them. Kids asking their moms "Why did da Dr. drop his needle on da street, momma?" And turn the corner to see non-profits handing out fresh ones.

This is coinciding with an electorate which is getting far, far more "progressive." So think expanded rent control, crime (no more "broken windows program, et al.), expanded taxing of the successful, utter contempt for the police force. No- sorry, we are all good here! The mentally ill and unstable have just as much right to the sidewalk as you! Or the subway... poor fellow, misunderstood.

Meanwhile, businesses are finding that the sole crushing expense of doing business in NYC is not entirely necessary.

The city will be back, but different.

It is funny when I hear from NYC and Brooklyn landlords... they would have you believe things are fine. It is like listening to Baghdad Bob... "Everything is fine, rents are going up!"

Not so. 
Listen, NYC will become more affordable- but with that will become a steep decrease in tax base and a decrease in services.

Like I said, 1980's NYC was a blast!

Also @Bruce Lynn brings up an excellent point. It is an absolute effing nightmare to raise children in the city. I think a lot of you would be surprised at the way the system runs, placement tests and having your children scattered in different schools all over the city, miles apart. That doesn't even factor in activities.

Sorry- I love the city as well. But we are amongst 10's of thousands if not hundreds who are not back in offices. You better believe your Baghdad Bob bottom dollar that that has a continuing impact. Back to normal! Delusional.

I agree with @JD Martinundefined and would only add that it is not just supervisors who see it. With that being said, this has demonstrated to old school supervisors who refused to consider it, that a 3 day work from home schedule is absolutely doable.

Am I the only one who is working more hours now? Because I can tell you that in the financial sector- the people working from home are working longer hours today then when they commuted 5 days a week.