Insurance Concerns:  Taiwan Earthquake Case Study

Why does it matter?  When you buy homeowner’s or disaster insurance for your house, you need a policy that covers the cost of rebuilding the damaged building.  You do NOT get paid for the entire value of your real estate, because in theory the land can not be damaged by fires, flooding, earthquakes, or other problems that can ordinarily destroy a building.  Land is forever finite, and the value comes from the location, surrounding neighborhood, and the potential highest and best use of the land, as they say.

Unfortunately, the tragic earthquake claimed over a dozen lives with many more injured.  Those fortunate enough to avoid physical harm will still suffer serious financial consequences, despite the vast majority having some form of basic earthquake insurance.  First, the authorities quickly ruled that owners of the Uranus Condo must continue paying the mortgages, despite the total destruction and uninhabitability of their real estate.  In fact, during the 9/21 earthquake many years prior, banks were able to convert mortgage debts into personal debts for homeowners.

As a one-two punch, most insurance payouts would not exceed $50K USD, far less than a typical home, even in Hualien, Taiwan.   The rationale?  You guessed it, our theme today is the value is in the land, not the building!  To estimate the coverage gap, we can check the Taiwan equivalent of the RealtyHop property record search to find recent purchases at the 天王星 building.  Someone JUST purchased two months ago in February 2024, although as a $1.6M NTD studio, the loss of coverage should be minimal.  Less fortunate is the buyer of the 3rd floor condo less than one year prior, who paid $2.7M NTD, possibly expecting a decently high cap rate and more appreciation on their investment. Cap rates on residential buildings in Hualian range from 4-5%.  The $1.6M studio owner could have rented it out for about 9K a month, netting about 6K after non-financing expenses.  Instead, these owners will need to continue paying their mortgages, not have a viable unit to use as a home or source of sublet income, AND the insurance payout is not enough to find an equivalent new place or even payoff the financing.  Imagine if the earthquake had impacted a larger city such as Taipei — the losses from the insurance cap could be staggering (a $1.5M NTD payout on a similar studio in a 30-year old building might not even cover 10% of the replacement cost in the urban cities).

Tax Depreciation: Do Not Depreciate Land

There is a much more common and less morbid situation where the land, building, and real estate values cause some confusion: cost basis and tax depreciation.  The IRS allows a landlord to depreciate residential real estate assuming a 27.5 year useful lifespan.  That is, the day you buy a house intendnig to rent it out, whether the house is brand new or built 50 years ago, the timer starts on the 27.5 years.  You are allowed to take a depreciation expense every year.

Say you decided to buy the house at 345 Northeast 163rd Street in Golden Glades, Miami, FL for the asking price of $780K, all cash (there is a 2.5% buyer agent fee, so assume your negotiation skills made that go away).  The high cap rate attracts you, so you manage to sublet it for $4000 a month while paying $564 in real estate taxes and $436 in maintenance and management of various sorts (nice round numbers, $3K a month profit).  You are making money and therefore owe income tax.  However, thanks to the wonders of depreciation, you can reduce the tax and increase cashflow.

Can you simply take a straight-line depreciation and divide $780K by 27.5 to get an annual $28,363 deduction?   Not so fast!  The IRS won’t let you depreciate the entire purchase price of the home.  Instead, they suggest pouring over assessor data to separate out the value of the land from that of the home.  Let’s take a closer look at the RealtyHop data.  Notice that the folks at the Miami-Dade County have conveniently broken down what they feel is the market value, how much is based on land, and how much is based on the “improvements” to the land (hint: the house sitting on the land is the improvement).

So What Am I Allowed to Depreciate?

After consulting with several experienced landlords, it seems everyone does things a little differently.  Some people downright ignore this land issue and depreciate the entire $780K.  However, that is almost certainly illegal.  The proper approach is to try to tease out the value of the house itself, aka the improvements, by assigning some value to the land and the rest to the house.  In our Golden Glades example above, the county assigned $257,315 of value to the land.  Perhaps that means the remainder of the purchase price must be the house, a simple subtraction.

Yikes, but is that correct?  Remember, these valuations are based on the most recent transaction of $400K a few years ago.  Now the asking price is much higher — is it because the seller is a home flipper who put in tons of sweat equity, upgrades, and renovations to add $380K in value?  Or do you need to equally scale the ratio of the land and house valuations?  The IRS actually gives us some depreciation guidance for separating land and home, but it’s not for the faint of heart (emphasis added).

They proceed with an example:

Back to our Golden Glades home, the fair market value of our ratio seems to be $165,715/$423,030 = 39.2%.   Meaning the cost basis we can depreciate for the house is only 39.2% of what we originally calculated above.  Darn.

Things get a little more optimistic, or complicated, because Miami actually quotes a different number for assessed value and market value.  Look up the address on their county assessor website and you will see the assessed value in 2023 is only $305,786, with no breakdown given between land and home.  This is due to some local rule called the “Save Our Homes Homestead Cap“.  We also see a wildly fluctuating ratio between home and land in their 2021-2023 data, meaning the IRS suggestion to use a constant FMV ratio based on your purchase date is somewhat dubious.

In the future, we may cover solutions to this problem, including itemizing improvements and putting renovations on their own separate depreciation schedules from the rest of the house.  We can also look at various ways to interpret assessment cap situations such as the one in Florida and other state and local adjustments.

The post Which Is More Valuable, The Land Or The Building? appeared first on CitySignal.

Where do the happiest people in the world live? Well, according to Andrew Arrigo and Steve Clair of Serhant, it’s either Finland or their new 8th-floor listing at 145 Lexington Ave.

While guaranteed happiness from this $2.2 million Rose Hill condo (situated where NoMad, Gramercy, Murray Hill, and Kips Bay all converge) is promised, it’s pretty clear that living here is gonna mean mo’ money mo’ problems.

For example, do you eat breakfast at your granite countertops overlooking your Miele and Sub Zero appliances in your chef’s kitchen? Or do you take your bowl of Wheaties (if you’re living in this home, of course you’re eating the Breakfast of Champions) to the sunlit den to take in the city sights? And don’t forget the endless internal dispute of when during a conversation you can casually drop that your home has its own private keyed elevator.

With natural light reaching all of the home, Unit 8 is comprised of two large bedrooms, two full bathrooms, a living room, dining area, kitchen, family room/den space, in-unit laundry, and plenty of closet space (a struggle to find in Manhattan).

Additionally, the primary bedroom benefits from an ensuite bathroom, a walk-in closet, and views of the Empire State Building, allowing for plenty of privacy and an Empire State of mind.

Residents of Gramercy 145, the building that houses the million-dollar listing, also benefit from a 24-hour virtual concierge/doorman service and a landscaped roof deck with an outdoor grill, kitchen, and bar. In the basement, there is space to house your bike, as well as a private storage cage.

Not sure if you can picture yourself there? The Millennial Broker team has done a good job at giving you a look into the space and what it might look like to live there.

 

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 145 Lexington Avenue #8 is listed by Andrew Arrigo and Steve Clair of Serhant.

The post Rose Hill Condo for “Happiest People in the World” lists for $2.2M by Serhant TMB Team appeared first on CitySignal.

This, of course, makes it harder for buyers to secure the financing needed to purchase new homes. As long as this continues, buyers will have to find creative ways to secure real estate deals—perhaps even open their minds to real estate solutions they hadn’t thought of before. 

The problem with waiting for the market to dip

Most buyers say that they are waiting for the market to turn. They prefer to buy when the market is low and will often pass up on properties they perceive to be overpriced in hopes that they will soon find a better deal.

The problem with this rationale is that no one knows when the market’s lowest point is until after it’s already passed. Buyers who bought homes in New York in 2002, shortly after 9/11, or in 2009 following the Great Recession, bought their homes at prices so low, we’re likely never to see them again.

There’s been a lot of talk of a potential recession in 2023. It’s normal for buyers to want to wait until after it hits. However, they should note that the dynamics of the market, specifically in Manhattan and Brooklyn, where buyers are most eager, have changed dramatically due to the large amount of condos constructed over the past decade. 

The influx of condos in highly-desired areas have altered consumer expectations. Back in the day, the only way to access the amenities offered by condos was through purchasing a co-op, a jointly owned building owned by a nonprofit corporation allowing its joint owners to live in the residence. We’re now seeing a return of the co-op in NYC.

What is the appeal of a Co-Op?

Co-ops typically come with demanding boards and strict regulations which turns a lot of buyers off. But in the ’90s, purchasing a co-op was one of the only ways New Yorkers could own apartments in the city. 

Although there’s no shortage of condos in NYC, there’s definitely a shortage of the money supply, which is making co-ops more enticing to certain buyers. Purchasing a co-op requires a different type of financing. You usually can’t finance a co-op with a mortgage. 

Instead, you’ll go through an application process involving interviews with the co-op board and financial vetting. If approved, you’ll be able to purchase shares in the company and become a co-owner of the building/nonprofit corp. The shares you purchase will determine the size of your apartment.

Given their convoluted ownership structure and sometimes lengthy approval process, fewer buyers seek out co-ops, which means less competition for the ones who do. If you’re open to it, purchasing a stake in a co-op may be your path to owning an apartment in one of New York’s historic pre-war buildings and prime location. Almost all pre-war buildings in New York are co-ops. 

Co-ops vs. Condos

Condos and co-ops share many similarities in appearance, but are fundamentally different in regards to ownership and financing structures. New York City is different from any other real estate market in the country. Co-ops are one of the reasons for this. 

Although co-ops technically outnumber condos in NYC by about 75%, you’ll find more condos on the market at any given time. The vast number of co-ops is due to the “co-op conversion boom” of the late 80’s, when developers converted a number of rentals into co-ops.

There are a few basic ways in which condos differ from co-ops. The first being that when you purchase a condo, your apartment as well as a part of the building’s common areas, belong to you. 

When you purchase a co-op, you don’t own the apartment. Instead, you own shares in the nonprofit corporation that is your building. Buying these shares allows you to occupy a unit in that building. 

If you’re thinking about purchasing a co-op with the hope of subletting your apartment in the near future, you might have to think again.

Every co-op has different rules in regards to who can utilize their living spaces. You may have to live in-unit for at least a year before being able to sublet, or may not be able to sublet your apartment at all. 

This is because the rental unit is not technically not yours. Ownership belongs to its collective stakeholders. When you close on a condo, you’ll get a deed. When you close on a co-op, you’ll get a proprietary lease.

Both condos and co-ops have a doorman and a superintendent on staff. Some have concierge, while others don’t. Amenities can range from lavish (gym, rooftop, children’s playground) to simple (storage room, laundry room, bike racks). 

Down Payment and Price

According to Castle Avenue real estate, the average sale price for a Manhattan co-op ranges from $553,734 for a studio to $5,109,433 for a 4+ bedroom apartment. Whereas, the average sale price for a condo in Manhattan ranges from $908,991 for a studio apartment to $9,846,869 for 4+ bedroom apartments. 

Condos tend to be more expensive than co-ops, but co-ops usually require a larger down payment than condos. You can put down as little as 10% on a condo, but a co-op will require a down payment of 20%-50%. Property prices ultimately depend on the neighborhood in which the condo or co-op is located. 

Closing Costs

Co-ops also tend to have lower closing costs than condos, usually between 1%-3% of total purchase price. Closing costs for a condo in NYC run between 8%-10%. The difference in closing costs between condos and co-ops is due to their difference in classification of property. 

Condos are considered real property, while co-op shares are considered personal property. It may seem insignificant, but it makes a difference when calculating closing costs for either transaction. 

Monthly Charges

Both co–op and condo owners pay a monthly fee for basic upkeep of their properties. But, co-ops usually come with higher monthly fees than condos. Co-op maintenance fees are higher because they often include part of the mortgage for the building.  

Take A Deeper Look At the Comparison of a Coop and a Condo

These two listings in the same area in the West Village have the same listing price, but you can see that the monthly costs are a bit different.

The post Growing Appeal of Co-Ops in New York City Real Estate appeared first on CitySignal.

It seems like the only thing it never has is certainty. Still, it’s useful to identify certain trends that may help inform buyer and seller decisions in the upcoming year.

What is Luxury Real Estate?

Defining luxury real estate across various markets can be challenging. Standards vary depending on the local market. What may be considered a luxury family home in a small Midwest town won’t be the same as a luxury condo in a busy East Coast city.

As a general rule, you can consider the luxury real estate market as the top 5%, or 10% of listings in a given area. In large metro areas such as Dallas and Chicago, high-end properties usually start at $1 million or more. In cities like New York, the top 5% of properties start at around $4 million. 

Luxury Real Estate in NYC

Luxury residential real estate operates a bit differently than the regular market. Although overall sales have been impacted by climbing mortgage rates and persistent inflation, top-tier real estate remains a must for NYC power players. 

“There are still bidding wars where there’s a scarcity of that type of property,” says Pamela Liebman, President and CEO of the Corcoran Group, to Variety Magazine. She finds that no bargains are being made among her clients when it comes to chasing their dream New York apartment. 

According to Compass data published by Variety, a total of 841 homes priced at $5 million+ have sold in Manhattan alone through August of this year. That’s a 35.6% increase for the first 8 months of 2022 when compared to the same periods in 2021 and pre-pandemic luxury sales in 2019. 

Jeremy Stein of Sotheby’s International Realty believes the luxury market is entering neutral territory. Unlike 2021 and early 2022, the market is favoring neither buyers nor sellers. “It’s safe to say, whichever way the market heads, it won’t be nearly as dramatic as it has been,” said Stein to Variety Magazine.

In May 2022, we witnessed the end of a volume of sales that was “historic and epic” according to Stein. It marked the end of a 16-month run for luxury real estate in NYC. By August, the market was already showing signs of cooling off, with only 15% of luxury deals closing above list price. 

Liebman adds that “2021 was the greatest year in the history of New York City real estate.” She reiterates it’s not a year to benchmark for comparison in the future.             

Luxury Real Estate Design Trends on the Rise 

Architectural Digest recently published an article on the latest trends being observed in luxury real estate. In terms of design, there were three home features that are expected to increase in popularity this year.  

Luxury Bunkers

A growing number of high-net worth individuals are investing in bunkers. It’s not surprising, given that we’ve experienced a global pandemic, a significant war in Europe, and a bleak economy all within the last three years. In fact, the demand has been so great, there are now entire companies dedicated to developing underground residences, such as the Swiss firm, Oppidum. 

In their search for enhanced security, million-dollar homeowners are building subterranean chalets with reliable off-grid power supply and military-grade technology. Some of these luxury bunkers even come with sophisticated lighting systems that mimic the daily ebb and flow of natural sunlight, as well as art galleries and wine cellars for entertainment.

Above Ground Pools

For a long time, above ground pools were considered tacky but it seems that their appeal is returning within the luxury market. Underground pools are more aesthetically appealing, but they’re also quite a hassle. 

 

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Installing and maintaining an underground pool can be a headache, especially if you don’t have the adequate space for it. As a result, some luxury buyers are choosing for a more simple look for their pools, redesigning shipping containers and stock tanks into above ground swimming pools. 

The Pied-à-Terre—with a twist

The pandemic motivated many city dwellers to move away for some time. They’re now returning, but not 100%. Hybrid living has been on the rise and has popularized the convenient idea of living in a hotel with a personal touch of a home. 

Short-term living was previously linked with unappealing corporate housing that lacked the “homey” feel so many of us want. Now that people have become more transient, working in one part of the country and living in another, short-term rental options have expanded and enhanced their offerings. 

Real Estate Agents are Hopeful for 2023

Luxury Portfolio International conducted a study among 200 member brokers to gain insight on what luxury residential real estate professionals believe is on the horizon for 2023. The report, titled the Business of Luxury Real Estate, polled brokerages, their principles, and top-producing agents. 

The study highlighted a few key findings:

• 95% reported optimism about their overall market in the next 12 months
• Signs of a shift towards a buyers’ market are starting to show due to larger inventories, increased days-on-market, and price reductions in certain markets
• Updated amenities, prime location, and size are the most common factors selling luxury homes at the moment

Across the board, real estate professionals recognized that COVID influenced an unprecedented, yet unsustainable market with most municipalities experiencing historically low levels of inventory. 

More competitive markets experienced as low as one month of available inventory at some point in time. To provide a point of comparison, a stable luxury market will generally have 12-18 months of available inventory.

Taking into account that 2020, 2021, and the first half of 2022 have represented an industry anomaly, the vast majority of professionals surveyed believe that the market will stabilize in 2023. 

The study also found that 76% of likely homebuyers admit that “even in times of personal financial uncertainty, I buy high-quality products.” Even as interest rates continue to rise, the luxury real estate buyer will remain in the market. 

Impact of International Buyers on the Luxury Market

At the time of LPI’s study, international buyers accounted for 18% of total luxury business for 79% of LPI member firms. It’s worth noting that the growth experienced by the luxury residential real estate market in 2020, 2021, and the first half of 2022 occurred without much, if any, impact from international buyers due to COVID travel restrictions.

The fact that luxury homes sales continued to be robust through this period of economic uncertainty with international buyers being largely absent from the market, speaks to the strength and viability of the luxury sector as a whole.

In 2023, international buyers are expected to continue their return to the market and search for homes offering privacy, safety, high-quality private schools, better infrastructure (e.g., medical facilities), safer investments, and cultural enhancements.

The Impact of a Recession on the Luxury Housing Market 

On December 9th, New York-based president of Luxury Portfolio International, Mickey Alam Khan, hosted the Luxury Hour Webinar on the outlook for luxury real estate in 2023. He and his team had the following to share about market expectations for the new year.

Low housing inventory, rising mortgage rates and a peak inflation rate of 9 percent have all contributed to the housing market slowing down. However, the market isn’t necessarily in bad shape. 

Despite public perception, mortgage rates aren’t at a historic high—inflation is, which means that interest rates need to be pushed up to control the money supply.

“The real problem and the real root of inflation is money,” says Gregory Heym, Chief Economist at Brown Harris Stevens in New York. “Our money supply [in the United States] has gone up 40 percent since COVID.” 

Heym also shared that over the last 50 years, the average 30-year conforming rate is at about 8%. There was a time where mortgage rates were as high as 18%. Taking this into account, 6.5% isn’t a high mortgage rate. 

Still, high levels of inflation and stock market lows are enough to plant seeds of doubt in regards to a global recession. But, Heym believes that this may not be a bad thing for the housing market. “Recessions are the only things that reset housing prices.”

Given that the luxury market historically favors all-cash buyers and caters to wealthy Americans who have access to either equity or large sums of cash, the recession isn’t likely to impair their ability to acquire new property. Rather, it may influence their decision to downsize, compromise on certain features, or wait the market out.

The post 2023 Luxury Real Estate Trends in NYC appeared first on CitySignal.

A few weeks ago, the team at CitySignal profiled The 44th Annual Housing Tour hosted by the Brownstoners of Bedford-Stuyvesant, an organization with more than 40 years of experience uplifting and protecting the communities of Black Bed-Stuy. As the tour continues through its end date on December 11th, I spoke with Shayla Mulzac about her experience as a young home-buyer and first-time renovator. In our conversation, we talked about the future of Bed-Stuy and the Brownstoners as well as her journey with the renovation, gathering some useful tips for future homeowners and renovators in the process.

The Newest Brownstoner of Bedford Stuyvesant

“This year’s tour is going well!” Shayla was proud to announce, “but people can continue to buy tickets up until December 11th. That’s when the link will no longer be available.” Mulzac estimates that at the time of our interview, the Brownstoners had received approximately $4000 worth of ticket sales.

“We do this every year except 2020, of course; prior to 2020, we always did it in person. I’ve been in a home that’s been participating in the tour […] at least since I was seven years old.” She went on, “As a child too, I used to think these homes were so beautiful and the owners were such people I would look up to like ‘Omigod one day I definitely want to own a home and be able to put my home on the tour as well; so I’m glad we’ve come to this space, you know?”

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Homeownership is a focal point of the Brownstoners of Bedford-Stuyvesant’s mission, especially for Mulzac, who has been at the core of the movement since a young age. She went on to speak about why that mission matters more than ever before,

“I am technically on the outskirts of Bed-Stuy. We’re trying to figure out how to preserve the life of the organization of the Bed-Stuy Brownstoners because, due to gentrification and people getting older, the lifeline of the org is dwindling. People are getting older, moving out.”

“I’m actually the youngest member [of the Brownstoners], so if there’s no one to follow me, how is the life of the organization going to sustain itself? So that’s an unfortunate situation.”

She clarified, “Not many brownstoners end up losing their homes,  but everybody’s situation is so different. The point I’m trying to make is that the organization may not have many more years of membership because in Bed-Stuy, not many of the homeowners are Black anymore, and many of the people moving in are not black homeowners.”

This is evident in the fact that in 2000, around 75% of Bed-Stuy identified as Black, while in 2015, that number is only about 50%. This transition is helped along by Urban Renewal, Blockbusting, and natural migration.

The Brownstoners of Bedford-Stuyvesant considers themselves to be a “Hands on organization,” and with their 44th Annual Housing Tour, “Preserving Our Legacy, While Embracing Our Future,” they further their mission which includes ‘helping to revitalize the Bed-Stuy community through building a strong base of Black home-owners in the area.” Bed-Stuy, a historically Black neighborhood, has seen a major shift in its demographics in recent years, with Black homeownership at a historic low. Outside real estate investors have moved into the area, buying homes en-masse to be repurposed as apartments, business space, or other building developments; to many, this is a tell-tale sign of gentrification.

“I’m actually the youngest member [of the Brownstoners], so if there’s no one to follow me, how is the life of the organization going to sustain itself? So that’s an unfortunate situation.”

 

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Three Tips for Young Home Buyers from a Young Home Buyer

As a young home-buyer fresh off a hundred-thousand-dollar renovation, Shayla was fully prepared to share point-by-point advice she had for others who wanted to do the same.

“You know, I get asked [for tips] a lot actually, and everybody’s situation is so different.” Shayla reiterated, “Depending on location, what type of home to purchase, whether you’re married or not; so many different variables to buying a home that’s different for everyone. But I think I realized three things that are kind of standard no matter what your race, age, etc; it may vary, you may have more if you’re a particular age, but, I believe these are three things that really make homeownership easier.

Go “Turn-Key” or Go Home

“Whether it’s a condo, coop, two-family home, three-family home, apartment building complex, anything, If you don’t want to do a lot of renovation, get something that’s “turn-key.” Turn-key means that you can walk right in, and it’s newly renovated and doesn’t need any work or very minimal repairs. You can walk in, move your stuff in, move your renters and your tenants in – that would be an ideal situation.”

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Renovating a home can be expensive, time-consuming, and a potential money-sink for first-time homeowners, and Shayla recommends avoiding it if you’re not comfortable with the process.

“It’s different from person to person, so it varies a little bit; if someone my age wanted to get something that’s brand new it’s going to cost way more than a fixer-upper. That’s how the factors become different and people do what works for them, but it would be ideal if you didn’t have to go through all those renovations; because I just finished a renovation process and it’s just a headache.” Mulzac was beginning the process of renovating her home during 2021’s annual housing tour, having completed it in time to be featured this year: She’s fresh off the experience.

How much money do you need for closing costs and renovations? Money is the name of the game

“My second tip is if it’s not turn-key and you have to go through renovations, have money in the bank. People who are my age, my friends, ask too, ‘so how much should you bring to the closing table? How much should I have in my savings?’

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Shayla looked to her own renovation process for an answer, further elaborating, “Now that I’m a year past closing, I give people my real raw numbers, so they have a better idea of the ballpark I guess.” Mulzac began renovations in January 2022 after closed 2 months prior in November of 2021. Looking at her credit card statements, Shayla shared that she had spent approximately $85,000 throughout the process with her own home.

“So it’s safe to say if people want to get into the renovation process, I‘m thinking at least $100,000 in your account. If you’re going to be renovating, doing floors, doing fixtures; you just want to be comfortable. You don’t want to be stretching your last penny up until foreclosure, and you haven’t even really moved in yet. So let’s just say 100k just to be safe.” The process can be deceptively expensive, she went on, “Furniture, like couches and chairs and microwaves and countertops and tiles; everything costs so much money.” Mulzac was quick to add that the $100,000 she recommends having at the ready doesn’t include money for closing, down-payments or closing costs, “that’s something else, a whole ‘nother branch on this tree that you could get into.”

Build your community before building your home

“If you don’t have a lot of money in the bank,” Shayla continued, “I would recommend having a team that will do work for you preferably for free, or for super super cheap.” Again, Shayla noted the difference in situations across the board for potential renovators, offering her own as an example “For me, my dad, he owns a lot of property in Brooklyn. He has contractors on different projects around Brooklyn, he does big projects. He’s ten times bigger than me.” Shayla utilized some of those resources in the process of her own renovation, smartly cutting costs.

“Not everyone has that opportunity or that privilege or that resource, but if they do, ideally have someone do some work for cheap, a handyman, maybe a task rabbit, someone who wants you to win.”

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Mulzac stressed the importance of having the support of a team or the community, filled with people you trust. “Someone who’s not going to try to get one over on you, run your pockets up, that’s my third recommendation; having a team that’s really invested in you. Maybe it’s your parents helping you out, maybe it’s your handyman who can do some things for free. Have a team that’s willing to see you win and invest into it with you to help you out, because it can be so expensive.” But again, everyone’s situation is very different;

“Everyone’s lean-on person is different, their team is different, their tribe may be different, but you should have something, someone willing to go to bat for you.”

Surprises and Challenges of First-Time Renovations

Full-scale renovation is not an easy feat, and Shayla had her own fair share of surprises and challenges to overcome during her own process.

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“Honestly, I’m thinking – I didn’t know how much work needed to be done behind the walls. So when I first did a walkthrough, the first tour of the home, everything looked so perfect, everything looked so beautiful. Nicely furnished and it wasn’t even staged, it was all real furniture from the people who lived before – of course they took all of those things with them but it just looked nice! I thought there’s no way a lot of work needs to be done.” But Shayla soon made a sobering discovery.

“As soon as I started moving in, I didn’t start living there till August. So I closed in November, then in December and January my dad and I are feeling out the place, seeing what’s right and what’s wrong; we realize that so much work needs to be done! And you may not know these things if you don’t have a team. For example; outlets. It’s ideal to have outlets in certain places; by your bed, behind a picture frame, where you want to mount a Tv. Certain things you want that make sense to make your house a home, those come up.” But that was barely the worst of it according to Mulzac.

“There was a rat infestation on the first floor, under the floor.”

Luckily, rodent complaints are down from last year in Bedford-Stuyvesant so hopefully this will be a worry of the past for her.

“Just a lot of things, our tenants space downstairs didn’t have a closet; if I want to rent that out to a tenant at a maybe higher rate I should fix that up, put a closet down there, put a washer and dryer down there.”

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Shayla went on to expand on the hidden expenses behind the walls, “I installed a washer and dryer, but where the washer and dryer went there was no plumbing for a washing machine in that location; so a lot of things like that came up as I was going through the renovation process, and it all tied back to money.”

Lighting, plumbing, electrical, according to Mulzac every single room had something which needed to be attended to.

Aspiring to Inspire

“The feeling that I did it, the feeling that it’s possible.”

Curious after hearing about all of the challenges that went into her renovation, I asked about what parts of the process Shayla most enjoyed.

“I want to give a good answer, I think my favorite part is the overall satisfaction throughout the whole thing, and that feeling still stands today. It’s the feeling I had at the closing table, and I still have that feeling right here right now chatting with you on the phone. The feeling that I did it, the feeling that it’s possible.”

Mulzac isn’t unaware of her legacy and influence on other potential home buyers and renovators.

“I think the admiration I get from other people, doing it at such a young age, it’s so inspiring to so many others. They’re like, ‘well, if she did it, I can definitely do it.’ I just get a lot of wow from other people. I feel like if I’m inspiring you to do it, by all means, use my story, use my testimony and mold it into your own, do what you need to do as well, whatever that may be, because everyone’s story is different.”

Taking Part In The NACA Program

I asked Shayla if there were any last words of advice she had to offer young home-buyers, and she lit up, adding, “I don’t know if I mentioned it, but I went through a program called NACA. That’s what makes it much much easier. I felt the program itself is very difficult, but what makes it different from trying to buy a home outside the program is that you don’t have to come to the closing table with a whole bunch of money. In the beginning, I mentioned having 100k in your account, and that didn’t include closing costs, and down payment, in the NACA program, you don’t need closing costs and down payments.”

 

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 According to their website, The Neighborhood Assistance Corporation of America (“NACA”) is a non-profit community advocacy and homeownership organization with goals not too different from that of the Brownstoners themselves, that of building healthy, thriving communities in urban and rural areas.

“I came to the closing table with about $40,000 on a $1 million loan; if it weren’t the NACA program I would probably have to come with 20% of $1 Million to the closing table. I highly recommend it; no closing costs, no down payment, my interest rate is only 1%, and I believe the national average is something like 6 or 7%” She’s correct, of course, with the 30-year fixed mortgage rate hovering around 7.08%.

“I felt like it would always happen, though; my Instagram bio has been for like 9 years now “Aspiring to Inspire” I always have an urge to inspire, to be a leader, to be a role model, to promote positive things; so I just knew it was going to happen. I would tell my younger self, “believe in yourself and stay committed, stay committed to it, stay disciplined, and keep going forward. Keep doing it. Keep doing it.”

Tickets for the Brownstoners of Bedford-Stuyvesant’s 44th Annual Housing tour are on sale now and will continue through the 27th of November when the tour ends. Hungry for more of the process? You can check out Shayla’s full renovation below.

Editor’s note: We have updated this article to correct that Shayla’s renovations began in January of 2022 and that the Brownstoner’s last day to purchase ticket sales is December 11th, 2022. 

The post Meet the Newest Brownstoner of Bedford Stuyvesant Aspiring to Inspire appeared first on CitySignal.

In a continued effort to remedy New York City’s challenging home market, Mayor Adams has published the Homeowners Handbook. This handbook is an official guide and compilation of all the resources that a renter or homeowner could need to purchase, maintain, and keep their residence. From resources on emergency repairs to reporting directions for unlawful violations, the Homeowners Handbook aims to take the guesswork and likelihood of scams and wrongdoers out of the housing space.

The release of the Homeowners Handbook is not the Adams administration’s first attempt at covering relevant housing issues for New York residents. Building off of the foundation provided by Housing Our Neighbors: A Blueprint for Housing and Homelessness and the Bedford-Stuyvesant Housing Plan, the Homeowners Handbook aims to provide a comprehensive approach to helping New Yorkers obtain quality housing and know their rights along the way. 

With an easy-to-follow layout that highlights various issues a household may face and the resources needed to tackle the problem, this handbook is likely to have major shockwaves in the city, accomplishing an end goal that Adams says many are excluded from, generational wealth.

“The best way to build wealth is to own a home, and my administration is investing the money and doing the work to make the dream of homeownership a reality for more New Yorkers… I will not accept a city where Black and Brown communities and renters are priced out of the chance to build wealth for their children and grandchildren.” says Adams in the Homeowners Handbook Press Release. 

Inside the Handbook – Standards and Resources

Chances are that many residents won’t take the time they need to read the handbook until they’re in a pinch. Whether it be because, as a renter, many homeowner resources aren’t pertinent to your situation and vice versa, or simply because they don’t believe they’ll qualify.

In all reality, this couldn’t be further from the truth! Knowing what resources are available ahead of time makes you more prepared for worst-case scenarios. Not to mention, the Homeowners Handbook emphasizes how informing yourself can help the people you love: neighbors, parents, siblings, and children.

Section by section, these are the highlights, including resources in the Homeowners Handbook.

Resources for Homeowners Needing Financial Help

• Foreclosure Prevention Services – Assistance avoiding the foreclosure process, including housing or legal counseling
• One Shot Deal Emergency Rental Assistance Programs – One-time payments to remedy outstanding taxes or mortgages that increase the risk of foreclosure
• Real Property Tax Credit for Homeowners – A refundable tax credit for limited residents with additional benefits for those 65 years and older
• STAR (School Tax Relief) – Annual tax benefits for homeowners who have enrolled in the STAR program, available as a credit check or exemption, depending.
• Disabled Homeowner’s Exemption – Available for qualified disabled persons with restricted income, owning up to a three-family property.
• Senior Citizen Homeowner’s Exemption – Exclusively for those 65 and older, some seniors are able to obtain a property tax break.
• Veterans Exemption – A property tax break for veterans and their families, including survivors of veterans who died while serving.  
• Property Tax and Interest Deferral Program – Property owners requiring assistance with their property tax payments may seek assistance in deferring payments to avoid foreclosure.

Heating, Water, and Energy Help

• Home Energy Assistance Program – An annual subsidy to help cover a household’s utility and heating needs. Also available as an emergency service to avoid disconnection.
• NYS Water Assistance Program – Across New York, residents have access to the Low-Income Household Water Assistance Program, which helps cover the costs of water services. Also available for emergency, past-due needs.
• NYC Home Water Assistance Program – Helping to subsidize the cost of NYC residents’ sewer and water bills for low-income households.
• Water Debt Assistance Program – A limited refinance option for those who are behind on their mortgages and otherwise need to defer water and sewer payments. For multi-family property owners, visit here. 
• Leak and Waste Forgiveness Program – Available for households who suffered from a large utility bill due to a non-fault leak.
• Service Line Protection – Insurance programs for homeowners who do not have the means to repair a service line inside or outside the home in a time of need.
• Flood Protection Insurance – New York City is at risk of flooding more so than ever. This program helps households in need find affordable flood protection and lets homeowners check their flooding risk.

Eco-focused Abatements and Programs

With a wider green initiative in New York City, it makes sense that resources in the Homeowners Handbook would also emphasize a preference for eco-positive options. 

• Solar Roof Abatement – Properties that rely on the renewable energy source are qualified for a tax abatement distributed annually for a set maximum.  
• Green Roof Abatement – Buildings that implement a green roof are eligible for tax abatements so long as they offer qualifying benefits like rainwater absorption.
• Assisted Home Performance with Energy Star Program – A discount of up to 50% on services and installation for upgrades in energy efficiency.
• NY-Sun Initiative – Expanding the accessibility of clean energy to New York properties via more accessible solar power options.
• Water Saving Kits – Interested in helping NY go green by minimizing your water use? The state has free water-saving kits to help you accomplish that goal, from low-flow showerheads to gravity-tank toilets.
• Energy Saving Abatements – Rebates and abatements for those residing in Brooklyn, Queens, or Staten Island when using energy-efficient materials.
• Green House Preservation Program – Assistance with financing an energy-efficient installation or water conservation in multi-family properties.

Repairs and Maintenance Assistance

You’re not alone in the maintenance and upkeep of your home. If you require help, many resources are available for residents of all backgrounds and needs. However, there are a few services that you’re responsible for as a homeowner, including pipe preservation (including preventing freezing pipes), snow maintenance or removal, and refuse and recyclables upkeep. For information on help with limited repairs, see below.

•  HomeFix – Accessible loans for low-income homes to cover necessary repairs with low or no interest.
• Project HELP – Emergency repair assistance for homes below the 120% median income with a maximum loan amount of $20,000.
• Lead Hazard Reduction and Healthy Homes Program – Despite being fazed out decades ago, lead-based paint still remains in many homes. This program seeks to provide grants for its reduction.
• New York City Historic Properties Fund, Inc. – Residing in a historic property? You may just be eligible to receive a loan that can be applied toward repairs.
• Housing Preservation Development Resources – Classes and clinics to help homeowners understand their needs, including Property Owner Clinics and Property Management Classes

Landlord Responsibilities and Tenant Rights

As a tenant, you have rights. Knowing them can help protect you from unlawful landlords and ensure your quality of life. Landlords are expected and required to adhere to a strict code of conduct to ensure the safety and well-being of all tenants. Here’s what to know:

• Fair Housing and Anti-discrimination – discrimination based on race, sexual orientation, disability, gender, nationality, age, or voucher status is not permitted. To learn the full extent of your rights as a renter, visit the NYC fair housing website.
• Harassment or Unjust Treatment – A landlord may not harass a tenant, regardless of the circumstance. Similarly, they are not permitted to overcharge, lock out, attempt to buy out, threaten, or intimidate tenants. Find more information here.
• Receiving Rental Assistance – New Yorkers of all backgrounds may be eligible for rental assistance. The extent of benefits will depend, but it is important to note that no landlord may discriminate against a voucher-holder.
• Heating and Hot Water – A landlord is required to heat all units to 68 degrees Fahrenheit from 6:00 am to 10:00 pm and 62 degrees from 10:00 pm to 6:00 am during the cold months, or heat season, lasting October 1st through May 31st. Similarly, landlords must provide hot water every minute of every single day. Failure to do so may result in fine accrual.
• Carbon Monoxide and Smoke Detectors – Landlords must install and maintain carbon monoxide and smoke detectors for inhabitants. If a tenant fails to maintain those detectors, they may be required to pay the landlord a fee as a result of replacement or repair.
• Window Guards – In cases when there are children under the age of 10 present in a unit, the landlord must install window guards to keep the child safe. Additionally, a tenant may request window guards for safety or another reason, and the landlord is legally bound to install them.
• Lead Poisoning – In buildings built before 1960, the likelihood of lead-based paint is increased. If a child is present under the age of six, a landlord or other property owner is required to remove the lead-based paint according to health regulations. The landlord must regularly check in with tenants to see if there is a new child in the space. Similarly, lead-based plumbing must properly be addressed if detected.

Tackling Growing Problems

The Homeowners Handbook aims to tackle a number of general but persistent issues affecting New York City residents. Not only does the handbook aim to educate residents on what issues are prevalent, but it also seeks to inform homeowners and renters on how to spot and prevent or cope with common problems in NYC.

Tackling Unauthorized Property Inhabitation

An issue that has long been identified but continues to take shape is NYC’s short- and long-term unauthorized rentals. The Homeowners Handbook aims to help educate the public on what is appropriate and when to report problems, all rooted in remaining vigilant. Instances of unauthorized inhabitation include:

Short-term Vacation Rentals

Homeowners are not permitted to rent their spaces out to vacationers without prior authorization by the city for less than 30 days. This is further highlighted as a growing problem with online rental brands such as VRBO and Airbnb permitting listings on their sight that are not legal.

The handbook emphasizes that this is a growing problem the city aims to crack down on with the help of neighbors, keeping an eye out for a constant influx of guests with travel gear or who appear to be visitors and reporting the incidents. Why? Because these unauthorized short-term rentals further perpetuate the housing shortage, upping rent and leaving actual New York residents without quality housing in favor of short-term rentals.

Illegal Housing Conversions

Cellars that are located in a one to two-family home are not permitted to be converted into a living space. On the other hand, basements are permitted to be used as a living space, so long as they follow strict conversion guidelines. Wondering what the difference between a cellar and a basement is? The Homeowner Handbook outlines the difference as cellars having more than half of their height below the curb level while basements have more than one-half above the curb level.

Deed Theft

Deed theft is a tragic way to lose your home, yet it is all too easy. One way this occurs is a forgery in which someone forges your signature, title transfers, and similar documents to take ownership of your home.

The other, which is rising in prevalence, is fraud. This works by a person or company preying on vulnerable homeowners promising false outcomes like help with paying down your debts if you sign over part or all of your home as collateral. You should never sign a document that transfers your rights to another person or company. No reputable party will request this. If this occurs, report the incident immediately.

Other Scams

There are a number of other scams that the Homeowners Handbook hopes to educate residents on. While they’re always changing in order to stay ahead of officials and continue tricking homeowners, keep these general guidelines in mind:

• Never divert payments (mortgage or other fees) to a company that is not your lender
• Never pay upfront fees to a third-party “helper” to have them help you recover in cases of financial hardship.
• Never opt for bankruptcy over making housing payments at the request of someone besides a qualified legal professional.
• Never authorize a change of ownership, partial or whole.

If you’re the victim of one of these growing problems, you’re not alone. Whether it is today or occurred months ago, it is never “too late” to report criminal activity. You may reach out to a local organization for help or contact your local Attorney General’s office for more help.

Estate Planning

Homeownership is crucial for beginning or maintaining your family’s generational wealth. Estate planning is one way to protect your investment and ensure it is preserved long-term. The Homeowners Handbook offers step-by-step help on how to conduct end-of-life planning with free resources for aid along the way. From understanding how probates, wills, and trusts work to knowing your legal options, the Center for NYC Neighborhoods’ Homeowner Hub offers free help.

For more information on qualifying factors for assistance-based programs or resources for complaints and legal action, read the entire Homeowners Handbook here. If you’re a homeowner who needs assistance, consider reaching out Homeowners Help Desk in person or online here.

The Takeaway

The Homeowners Handbook highlights a number of problems, solutions, and resources for homeowners, renters, and landlords across New York City. It aims to be a comprehensive resource for those involved in all sides of the market to understand their rights and responsibilities, combatting one of New York City’s greatest problems – safe, equitable, and accessible housing for all. Protect your greatest asset or that of your loved ones by staying informed and in charge of your housing decisions. 

The post What To Know About Adams New Homeowners Handbook appeared first on CitySignal.

If you love looking at places you’ll never be able to afford, but love drooling over them anyway-? You’ll fit right in, so join me on one of my epic ‘adventures in real estate’, as I comb the listings and find the most expensive house in the Hamptons, and the other highest-priced Hamptons mansions on the market. (Of course that means you’ll have to put up with my weak attempts at humor, but hey – that’s a pretty small price to pay, isn’t it?;) These top ten priciest are in no particular order.

Most Expensive Listings in Southampton

Southampton Superstars

1. $44,950,000

Located at 1080 Meadow Lane in Southampton, the property is actually a lot, where you can build your Hamptons dream house. However, there is a picture of the exterior of a house, included with the listing, but no information on it, per se. Instead, it says this lot offers over 300 feet of direct oceanfront beach, accessed easily by your private walkway. {Private walkway… from? to?… a bottomless ocean to a private abyss?? Or what?!} Size of the lot can accommodate a 12,000 ft²+ residence, tennis courts, and an oceanside pool! To find 5 acres of land in total, next to the ocean and in this trendy, prime location in Southampton, is extremely rare and highly valuable {obvi!}. However, it’s not much fun to drool over… too much brain power is needed to imagine everything. But at that price, we had to include it!

2. $39,500,000

This modern-looking architectural wonder is located at 1100 Meadow Lane in Southampton. But, being very near the other lot, this one is also being advertised as a “building opportunity.” The existing home has 6 bedrooms and 8 bathrooms and is over 5,000 ft². It’s definitely gorgeous, but as advertised, the lot can accommodate a 10,000 ft² home instead, and a tennis court! {Gee, whiz, makes my puny house feel so small and insignificant!} Private walkway right to the beach, and unobstructed views make this “glass house” an enticing retreat. {Be sure you remember not to throw any stones, though…you know what they say about people in glass houses.}

3. $23,500,000

{Insert proper English accent, here}: Or how about this lovely Hamptons mansion? Also in Southampton, at 320 Majors Path, this elegant beauty measures a whopping 9,500 ft² and has ten bedrooms and twelve bathrooms. The place is called the “Rosewood Farm” Estate, and not only is it on more than 34 acres but it’s also located on the original site of the Southampton Hunt & Riding Club. {Selling point, check } Additionally, the current owner has transformed the previous buildings into liveable space. It actually consists of a main residence with 6 bedrooms and a separate guest house with another 4 bedrooms, plus a courtyard with a fountain and more. {Translation: Used to be a couple of barns and a stable, now it’s a main residence, guest house, and a 4-car garage. Presto~Change-O! Voila! You’re a multimillion-dollar estate.} 

4. $19,500,000

This Southampton mansion is a treasure, located at 540 Halsey Neck Lane it measures 10,000 ft², tying it for first place as the biggest house in the Hamptons currently for sale. There are 9 bedrooms and 12 bathrooms, and another 2,700 ft² to be had on the third floor. Private gates, mature landscaping, double-height grand entry, just look at this magnificent and well-cared-for piece of primo property. Top-of-the-line, ample appliances, marble fireplace, granite countertops, French doors, stone terrace, elevator, second staircase, billiards room, game room, and so much more!

Most Expensive Listings in Bridgehampton

Bridgehampton Beauties

1. $27,5000,000

{British or possibly Irish accent here}-: Bridgehampton South, to be exact, this mod design is precisely situated at 180 Pointe Mecox Lane. Just look at that stunning view and 6,000 ft² of house, with 5 bedrooms and 7 bathrooms. BMA Architects are nearing completion, along with landscape architect Laguardia Design Group, who together have created this newly constructed home with the killer 360° views. Saltwater pool, spa and private dock, the residence was made for entertaining.

2. $12,950,000

637 Halsey Lane in Bridgehampton won’t be completed until 2023 but is an absolutely gorgeous home with 9,500 ft². It offers 8 en suite bedrooms plus 2 half baths, a gunite pool, and separate pool house, a bluestone patio perfect for entertaining in the summertime, private terraces, his and her walk-in closets, etc. White marble adorns the kitchen and bathrooms, matching the rest of the clean, white theme. {Speaking of clean white – does this place come with a housecleaner, for almost $13 mil?!}

Most Expensive Listings in East Hampton

East Hampton Hotties

1. $39,500,000

Located at 15 West End in East Hampton, this sizable mansion measures 5,000+ ft², plus includes a separate guest house that measures 1,500+ ft². They both sit on 2 acres of highly coveted land on a highly coveted street, and the land includes 165 feet of oceanfront on Georgica Beach. The main residence has 9 bedrooms and 5 bathrooms, and the guest house has 3 bedrooms and 2 baths. The house has a private pool, of course, and mature and manicured gardens and landscape. It doesn’t get much better than this, in the Hamptons, folks.

2. $19,500,000

This is one of my favorite Hamptons mansions, located in East Hampton at 104 Georgica Close Road. Keep in mind that these are conceptual renderings so won’t be realized until a lucky purchaser dives in, but we can dream about the future of this home. On 2+ acres and 5,500+ ft², this classic beauty is by renowned builder Jeffrey Colle. It has 6 bedrooms and 8 bathrooms, 300 feet of linear frontage on Georgica Pond, a private pool and private water access. Tons of windows give natural light to the home throughout, and spectacular water views from a rooftop terrace add charm to this entertaining paradise! Waterside pool, separate 1,400 ft² pool house and pond-side 60′ X 120′ tennis court. Now this place has class…

3. $9,5000,000

The regal-looking mansion shown here is located at 534 Hands Creek Road in East Hampton. The unique residence is more than 10,000 ft², custom-designed with 6 bedrooms, 7 full bathrooms, and 2 half baths. Has 12-24 foot tall ceilings throughout, an ornate wood-burning fireplace, and French doors that open onto a heated, covered porch and another fireplace plus a big-screen TV. There are plenty of fireplaces all throughout the ornate interior, more than one staircase, and a huge manicured yard with a massive 50′ X 16′ gunite pool, heated and with a water fountain feature. Free-standing hot tub and full-sized bocce ball court, too. Now this is a Hamptons mansion, and the price is certainly right. It’s the least expensive of today’s Hamptons houses but has the most square footage. Go figure. This is therefore the biggest house in the Hamptons (currently on the market)!

Final Remarks

As always, I hope you enjoyed tagging along with me on my “Hamptons Odyssey.” After all, it’s always more fun to look at expensive, luxury real estate with someone else who can’t afford it either! {Am I right?!} In any case, be on the lookout for the next piece like this I do – where we’ll be looking at the most expensive listings in NYC – and let me tell you, this is what all the hype is about! I mean, all the ungodly prices and outlandish stories? Only in Manhattan, folks. Wait’ll you see this list – so please join me on my next adventure in real estate, and until then, happy coveting! (Wink-wink

The post The Most Expensive Hamptons Mansions For Sale Right Now appeared first on CitySignal.

This guide will help you figure out the best way to get started in real estate investing, depending on your goals and your capacities.

Establish Your Real Estate Investment Portfolio Goals

Have you decided to invest in real estate? Excellent news. However, real estate investing can mean very different things to different people. There is no right or wrong way to invest in real estate – as long as the type of investment you choose to make matches your abilities and expectations. Here are some of the elements you should take into consideration when you decide to invest in real estate and some of the options you may choose depending on your priorities.

Gain Real Estate Knowledge

Real estate is a very complex subject, with many ramifications demanding specialized expertise. If you are just getting started in real estate investing and do not have any previous experience in the matter, it can be intimidating. Reality TV shows can make real estate investing seem easy and straightforward, but in real life, that is rarely the case. This does not mean that you need to become an expert before dipping your toes in the real estate investing business, but you may need to hone your skills and stay informed as you build your portfolio.

If you have little time, energy, and interest to dedicate to your quest for knowledge but still want to take advantage of the benefits of real estate investing, your best bet may be to start with managed funds, such as Real Estate Investment Trusts (REITs) for example, where you provide the funds but have limited decisions to make on a daily basis. On the other hand, if you want to dive into a real estate investment career, you will need to educate yourself on the local market, real estate laws, and any related fields so you can start more involved forms of real estate investments – such as flipping houses, renting properties, and so on.

Time Commitment For A Real Estate Investment Portfolio

Real estate is often presented as a form of passive income. Although it can, in some cases, provide predictable revenues with little input, it is not necessarily true. Any landlord can testify that renting one or multiple units is an involved job, even with the help of a property manager. Flipping properties also require a significant time commitment, although it can be alleviated with the help of a trusted local contractor and real estate agent to handle many of the daily decisions. Renting properties is typically a long-term commitment while flipping houses is more sporadic. For example, you may decide to buy, renovate, and sell a home during the slowest season in your regular job.

If you would rather take the back seat to real estate investing, the best course of action is to invest in a mutual fund, participate in a limited partnership, or join an investment group or investment trust. These forms of real estate investments require little involvement on behalf of the investors, freeing their time for their full-time jobs or other occupations.

Cost of Real Estate Investment Portfolio

Real estate is expensive: it is the main entrance barrier for many would-be investors. Besides, most forms of real estate investments are not liquid. If you are just getting started in real estate investing, the chances are that you are hesitating to freeze a significant amount of capital for several years. The good news is that most forms of investment provide regular returns, such as rental income or dividends. In addition, you can use the equity you build in a property over time by contracting a home equity loan or line of credit.

Nevertheless, you will still have to examine your finances and make sure that you have enough cash or liquid assets to cover emergencies. REITs have the advantage of being more liquid than other forms of real estate investments. They may be a good option if you are looking to build or diversify your portfolio without committing fully. You can also start building your real estate portfolio by flipping a house for a relatively rapid return on investment.

Another consideration is the amount of money you are willing to invest in this venture. If you are investing in real estate alone, buying a property – to rent and/or flip, for example – represents a significant expense. Commercial assets, in particular, are extremely expensive, and financing options are limited for investors who do not have a tracking record. If you have limited funds, you may want to look into sharing expenses with other investors. However, beware that some investing platforms are only open to accredited investors.

How To Finance Your Real Estate Portfolio

If you are wondering how to build a real estate portfolio, you are probably unsure about how to find the funds necessary to get started since real estate is one of the most expensive forms of assets. Here are some options you may want to investigate.

Leverage your primary residence

Many real estate investors start building their portfolios by using their primary residence as a steppingstone. In some cases, they may use their property to produce extra rental income. Depending on the setup and lifestyle, would-be investors could rent part of their home, either to roommates or by using short-term rental platforms like VRBO or AirBnB. If they can find other living arrangements, they can also rent out the totality of their home.

However, renting your home is not the only option for building a real estate portfolio. Since a primary residence is often the most important financial asset of a beginner investor, you can use the equity you have built in your home to finance the rest of your portfolio by contracting a second mortgage such as a cash-out refinance, home equity loan, or a home equity line of credit (HELOC). The process of buying, rehabbing, renting, refinancing, and starting again (a.k.a. BRRRR method) has become a popular form of starting and growing a real estate portfolio.

Obtain an Investor Loan

Unless you purchased your primary residence cash, you probably contracted a mortgage. However, being approved for a mortgage as an investor is a different ballgame.

Mortgage lenders consider that investment properties are riskier than houses to be used as primary residences since a homeowner encountering financial difficulties is more likely to prioritize their mortgage on their roof over their head than an income property. Therefore, you can expect more stringent requirements, including higher down payments (20% or more), higher credit score expectations, cash reserves, and so on. In addition, many mortgages with advantageous terms (government-backed loans such as FHA, USDA, or VA, for example) are not available for rental properties.

Suppose you do not qualify for investor loans through traditional lending institutions. In that case, you may also seek out hard-money lenders who, unlike banks and credit unions, take the profitability of the property to be purchased into account. It can be particularly advantageous for would-be investors interested in flipping properties since you can repay the loan a lot faster than conventional loans without penalties. On the downside, hard-money loans have significantly higher interest rates than traditional mortgages, and they also have higher origination fees and closing costs.

Find Private Money Partners

When it comes to real estate, the best way to build a portfolio is sometimes to divide and conquer. Bringing in partners also helps alleviate the risks and financial burden. Beginner investors can join a local real estate investment club to network and find other individual investors willing to pool their funds before joining a venture. The terms of the loans, repayment, and so on will vary depending on the type of deal and each party’s input.

Private money lenders do not have to be other real estate professionals: you can also present this opportunity to friends and family members. However, beware that it is best to set up a contract in case the deal goes sour, regardless of your relationship with the other party.

Defining Your Real Estate Portfolio

Seasoned investors know that it is best not to put all your eggs in the same basket. The same goes for real estate investments. When gearing up toward starting a real estate investment portfolio, it is best to establish your long- and short-term goals to protect yourself and select a strategy from the get-go.

Choosing the Best Form of Real Estate Investment

In the first two parts of this guide, we discussed establishing your priorities as a real estate investor and finding the necessary funds. It is often best to start small to avoid unnecessary risks and learn as you go, especially if you are not familiar with the industry. Here are some of the most common forms of real estate investments for beginners and their pros and cons.

• REITs: REITs are publicly traded companies that own and manage commercial properties (hotels, malls, etc.) Investors can purchase shares on a stock exchange and receive yearly dividends. It allows them to diversify their portfolio and invest in commercial real estate without the high entry costs and expertise this type of investment typically requires. In addition, REITs are relatively liquid since investors can sell their shares on the stock exchange if needed.
• House flip: Investors purchase a property in need of repair and resell them within a short time (typically a couple of months.) They may choose to update them to resell them for a profit or simply hold them if the market is increasing rapidly. Investors need to have an excellent knowledge of the local market and construction industry to stay within budget.
• Rental properties: Rental properties come in many different forms, from vacation to long-term rentals, ranging from single-family homes to large apartment communities. Rental properties allow landlords to perceive a predictable income and hold the building until it increases in value. However, being a landlord – even with the assistance of a property management company – can be very stressful and time-consuming, especially if you own multiple units.
• Commercial real estate: Commercial real estate includes any form of space rented or leased by a business. It comprises industries as varied as office buildings, malls, retail spaces, gas stations, restaurants, etc. This type of investment provides predictable incomes since the leases are typically long-term. However, they also have high entrance barriers, including higher down payments and property management expenses.
• Raw land: Investing in raw land requires an excellent knowledge of the area you are considering, including the local residential and commercial rental markets, but also the local regulations such as building codes, zoning regulations, and flood plains. Raw land gives investors a wide range of exit strategies: dividing the plot for resale, leasing it to renters, developing new construction, and even holding on to it while it appreciates. However, it can be very speculative in nature.
• Mutual funds: Real estate mutual funds are managed funds that invest primarily in REITs but also real-estate stocks and indices. They give investors access to a wider variety of assets than individual REITs and allow them to diversify their portfolios for a relatively small amount of capital.

Diversifying Your Real Estate Portfolio

You have successfully started your real estate investment portfolio – now what? It may be time to consider diversifying your investments to take full advantage of the industry’s numerous benefits, such as tax benefits.

Diversification may include other types of assets but also investing in other areas of the country. As you expand your portfolio, you may also need to learn more about additional industries related to real estate – such as law or construction, for example. You will also build a team that can guide and support you so you can take your portfolio to the next level. Good luck on your real estate investment journey!

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What Are New York City Timeshares?

First and foremost, timeshares in NYC don’t typically look like timeshares everywhere else. Timeshares in the city usually come in the form of a fractional ownership deal, where people can pay money to buy a set amount of time in a hotel or resort with the ability to choose one of several location options. They also usually come with additional perks like deals on similar hotels worldwide, fine dining, and even access to amenities like fitness centers.

While traditional timeshares try to tell you that you own land, most fractional ownership in NYC makes no such promises. Instead, the money you spend, usually between $30,000-$100,000 depending on the company, package, and location, goes toward a spot in an exclusive club that gets to know who you are as a person. You can stay in the same room or suite every time you vacation, and these options are usually larger than standard hotel rooms. It’s also a way to have a slice of the city without spending millions on real estate. You can say you own a small place in Midtown Manhattan, and it will only be a little white lie instead of a grandiose one.

Where Are New York City Timeshares?

Many luxury buildings contain timeshares. Some of the most popular in the city are:

St. Regis

The St. Regis is a historic Hotel built by John Jacob Astor IV, who opened the Hotel in 1904. This building’s claim to fame is inventing the Bloody Mary and throwing midnight tea events. Current ownership allows you one fixed week stay at St. Regis locations in New York, Aspen, or Scottsdale.

Owners also have 21 additional nights that they can book on priority reservations. While staying at St. Regis, owners will have access to the fitness club, butler service, and access to the exclusive Astor Court and King Cole Bar.

West 57th Street by Hilton Club

One of many hotels in the Hilton Club, membership to the West 57th will allow you to accrue points during various vacations and use those points to gain access to new perks. Club members automatically get access to all Hilton amenities, but points allow you to make priority reservations and extend your stay at the resort of your choosing.

Rooms are huge and usually have separate bedrooms, living rooms, and kitchenettes for owners. Some even have multiple bathrooms for larger families who need extra space.

The Phillips Club

Right next to Lincoln Square, The Phillips Club offers you a deed for 1/8th ownership of an apartment in the hotel. This fractional ownership differs from others in the city because you’re actually part owner of an apartment. Some of these places are multi-bedroom with full kitchens, and you can work out an extended stay.

Your stays aren’t fixed either, so as long as you’re not interfering with another owner, you can live here whenever you want. Owners have access to all the amenities in the hotel, like business centers and a dining area.

Are New York City Timeshares Worth It?

It truly depends. The fact is, each fractional membership offers you different things. It’s up to you to decide what you’re willing to pay for. The Phillips Club offers you a share in an actual apartment. This could be seen as an investment, albeit a small one. The room will grow in value over time if the real estate market does, at least in theory. In practice, prices might remain stagnant due to the Club’s policy. It’s hard to tell if a deed to the apartment actually means ownership.

For buildings where you don’t get a deed, the situation is even murkier. You’re essentially paying for a larger room, first dibs on activities, and more access to services and amenities, all of which are great. However, you don’t actually own anything. You’ve made no investment into a property, you just enjoy that property’s perks for a fee. This isn’t necessarily a problem, but it is something to keep in mind if you’re seeking to actually own something in the city. While hotels are offering a lot of goods, most still don’t offer you ownership.

Additionally, whether you have a deed or not, you have to work around the schedules of other club members. If these families get to the room first, your vacation might not be as flexible as you think. That said, fractional ownership deals can still be beneficial if you’re willing to make reservations far in advance. Most clubs will also allow you to cancel or transfer weeks with little to no cost, meaning that sudden changes to your schedule shouldn’t be an issue. Plus, these clubs offer services and amenities that regular hotel bookings don’t, so the levels of exclusivity and luxury are off the charts.

Timeshares are tricky situations because contracts can be confusing and what’s advertised isn’t what’s given. However, NYC has recognized this mistrust and is striving to correct the course by making this industry reputable. Some of the language is still unclear, but these clubs are nowhere near as bad as the full-on scams of the past. People who want to enter fractional ownership deals should still be explicit with what they want and what they will receive, but the industry is much more transparent in the city than it is elsewhere in the world. No matter how you travel, We hope you enjoy your vacation.

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348 West 48th Street

In the Heart of Hell’s Kitchen, this complex has spacious units for under $600,000. This location is one of the hottest in the city, and apartments are just as eclectic and slick as the neighborhood they reside in. With plenty of room to stretch out, these units come with hardwood flooring and, usually, an extra room to be used as an office or library. Residents will be very happy here.

246 East 51st Street

One might think that buying a spacious home in Turtle Bay will easily cost them over $1 million. However, this building features large homes for well under $500,000. Some units are even under $400,000 and feature renovated bathrooms and kitchens. It pays to be in Midtown Manhattan too. If you’re seeking a purchase in the middle of the action, then this is the building for you.

237 Eldridge Street

Located in the Lower East Side, these cozy apartments are available for under $500,000. This is a steal for this popular neighborhood, especially considering the art, food, and culture that are ever present here. Units in this building are quirky and cute, while also providing you with enough space to get creative.

3115 Broadway

A stunning pre-war building in Morningside Heights, 3115 Broadway has spacious units available for under $400,000. Apartments are usually open and filled with natural light. The building is in a great location, just a short walk away from Riverside Park as well as the 1, A, B, C, and D trains. The building also has a bike room as an added perk.

206 West 121st Street

Right between Marcus Garvey Park and Morningside Park, this is a gorgeous red brick building in the heart of Harlem. This building has amazing units for under $300,000. The location can’t be beat, as you’ll be close to many Harlem hotspots like The Apollo Theater and the National Jazz Museum. You’ll also be a short walk away from the 2 and 3 trains.

223 East 3rd Street

A cute building in the East Village, this complex provides sizable homes for around $500,000, though some large units can reach around $700,000. In addition to being in a historic and lively neighborhood, this building also has access to a private garden that residents can enjoy. A serene environment in a bustling neighborhood, this complex provides the best of both worlds.

4 West 105th Street

Less than a block away from Central Park, this building is in one of the best locations in the city. It’s a five minute walk away from the B and C trains, as well as a multitude of restaurants like Saiguette and Osteria. Homes here can be bought for under $400,000, and feature large living rooms and bedrooms. It’s also a historic, pre-war building if you’re an architecture buff.

409 Edgecombe Avenue

A beautiful red brick building in Hamilton Heights, these units are perfect for families or young professionals who love to stretch out. Units here can be found for under $600,000, and feature large, open living spaces, hardwood flooring, and an incredible staff, like a doorman and dedicated super. Select units even have an extra space for an office, library, or dining room. The location is super peaceful, yet practical, as it’s close by to the A, B, C, D, and 1 trains. They don’t make them like this anymore.

326 West 43rd Street

It’s a surprise to most people that Hell’s Kitchen has affordable housing these days, but you can still find special spots. This special spot, for example, has large homes with multiple bedrooms that are available for under $700,000. Even more special is the fact that this building has a laundry room to go along with its great location near the Theater District and Times Square.

7 West 92nd Street

Also known as The Raleigh, this Upper West Side building has a lot to offer. Most homes here have multiple bedrooms that are available for under $800,000. Less than a block away from Central Park, the units in this building are spacious, with beautiful interior architecture and ample storage built in. Additionally, many units have built in dishwashers, as well as combination washers and dryers for your convenience. 

2159 1st Avenue

Located near the East River, This building has gorgeous interiors that are also spacious. Usually featuring things like dishwashers, these homes are, amazingly, priced at or below $400,000. Just a few minutes away from the six train, and right next to Thomas Jefferson Park, this building is perfect for those who like to travel into the heart of the city and those who like to hangout in their own neighborhoods.

HDFC’s may still seem pricey, but in the grand scheme of Manhattan real estate, these are very good deals. Many of the units listed here have everything higher priced apartments have in the exact same locations. They are convenient, beautiful, and ready for you to move in.If you meet the qualifications for an HDFC home, jump on it. It will increase in value and give you a great starter home. You will not be disappointed when you choose to buy one.

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