4 Bedroom Money Producer - $48,000 income a year!

Spacious Living Room with Original Moldings!

Well Maintained Apartments.

All Plumbing and Electrical has been Upgraded!

Common areas all recently updated.

Income:
Current rent roll – $3571.00 – per month
4 Parking Spaces in Rear – $400 – per month

Total Income: $3,971.00

Expenses:
Heat (Gas): $900.00 – per month
Water: $350.00 every – per month
Electric: $40.00 – per month
Maintenance: $150 – per month
Taxes: $7724.67 – annually
Other: $1,631.30 (property insurance)

Total Expenses – $2,182.22 – per month

Recent capital expenditures – new roof and boiler.

This property needs to be seen to be appreciated!  Own a piece of Brooklyn with plenty of upside potential.

One of my favorite Landlord/Owners who I frequent work with to find quality renters for her property asked me if she was required to install window guards on the front windows of her fabulous brownstone.  She hoped not because aesthetically, they are not cute, and besides, the potential tenant that has an 8-year-old child will be living on the first floor.

The fact checker in me went straight to the web even though I was already pretty sure of the answer.  According to New York City law as set out by the Department of Heath and Mental Hygiene, window guards are required if a building has three or more apartments and a child 10 and under lives in that building, even if the child lives on the first floor. Every window in the apartment must have a window guard except windows leading to fire escapes.  Even windows in any public corridors must have window guards.

Beside the fact that it’s the law, window guards save lives.  Every year many children fall from windows in New York City.  Some of them die, many are very badly injured.  I advise all of the landlords and tenants I work with to make sure window guards are in place in their apartments if children of any age will be living there.  Last year in the Bronx a 14-year-old boy fell out of the window from the six floor.  At his age he should have known better, but children will be children.

The standard window guards that you can buy from Home Depot or Lowe’s are indeed ugly, as you can see from the one pictured above, but there a many dressier (which means more expensive) alternatives.

I think aesthetics are important.  Pretty things make us feel good, and a good-looking property has increased value but there’s nothing uglier than the death of a child that could have been easily prevented with window guards.

Well here is an example of a four family brownstone that is for sale at the date of this blog post that has a monthly cash flow (profit) of  $3,100 a month (and that’s with a mortgage) for the potential new owner.

The property is located on in Fort Greene Brooklyn.  It has 4 units, all two bedrooms and two of the units have a ½ bath in the master bedroom.  One has roof deck access, the other back yard access.  It is 20’ x 35’ in size totaling about 2,800 square feet of living space.   There are two things that make this property cash flow so well, location and smart renovation.

Location -  Fort Greene is currently one of the hottest areas in Brooklyn, right on par with Williamsburg and Park Slope.  In my real estate office, which is located in Fort Greene, we have several walk-ins daily looking for apartments in the area, so many that there aren’t enough properties to accommodate them all.  I recently rented a really fabulous 1 bedroom for $2000 a month that went from being available to lease signing in three days.  This cash flowing property I’m discussing has an additional benefit of being within three blocks of a subway station.

Smart Renovation -  This is a great buy and hold property because it has been renovated with wisdom.  Every apartment has its own spit AC/Heating System, so the landlord is not responsible to provide, and best of pay for, heat, hot water and of course electricity.

So here are the monthly statistics for this property:

So you can see, you can be a landlord in New York City, in Brooklyn in particular, and make a profit.  You just have to find the right property (or renovate one to make it right) in a great neighborhood.  For more information about this property or other cash flowing properties, give me a call or email me at the number or email address below.

Give me a call and I’ll get it done.  Or, you can start with a free market analysis to find out what your property is worth before you put it on the market.

The market analysis, which is based on comparable sales of properties like yours in your area, will tell you what current buyers will pay for your property, which is what determines its current worth.

In the same article it mentions that, according to a Morgan Stanley analyst, when you add those home owners who are delinquent on their mortgages and will likely lose their homes through foreclosure, the actual percentage of home ownership is 59.2%. “The combination of falling home  prices, limited mortgage credit, continued liquidations and better rental options is changing the way Americans live” according to the analyst. “We are slowly becoming a nation of renters” he goes on to say.

Since more and more people will be renting instead of buying, the real estate investment strategy to “buy, improve and hold” property with rental units becomes more and more attractive.  The income you will receive from rentals added to the appreciation of the properties value over time makes owning rental units a smart investment that can benefit you now and in the future.

If you want to learn more about this very lucrative and low risk way to invest your money, give me a call or email me by clicking here.

The answer to that questions is “it depends.”  The reason that you want to sell will determine whether or not its a good time to sell your rental property.

I Hate Being a Landlord - This is the reason the landlord who asked me the question above gave for wanting to sell his properties.  He has moved out-of-state and the tenants that he’s been getting over the past few years have been driving him crazy, forcing him to spend countless amounts of money and time driving back and forth from Virginia and in and out of housing court dealing with problems.  20 years ago when he started his Landlord Business he didn’t mind it, but now…

If you find that being a landlord is causing you mental stress, sleepless nights and costing money you’d much rather spend elsewhere, than for your physical and mental well-being, which it truly worth much more than money in the long run (the dead can’t spend) than it’s a good time as any to sell your rental property.

I Could Use The Money – If you’ve owned your rental property for several years and you’ve got enough equity to sell it for a profit (not as much profit as you would have gotten in 2007, but that’s neither here nor there) than nows a good a time as any to sell your rental property.

Take your profit and do what you need to do.  Whether its pay down debt, pay your kid’s college tuition, make much-needed repairs on your own place of residence, or retire comfortably, do what’s right for you.

I Can No Longer Make The Mortgage Payments - This reason for thinking about selling makes the decision a no brainer.  If you’re find yourself in financial hot water and creditors are knocking at the door (or ringing your phone off the wall which is more likely) than now is as good a time to sell as any.  Why loose your property and wreck your credit?  Sell it.  Sell it fast.  Even if you have to take a loss.

Don’t be like one seller who, while standing at the brink of financial disaster (foreclosure), refused several offers on her property because she wouldn’t “make any money”.  Now, not only hasn’t she made any money, she no longer owns the property and her credit is wrecked.  Don’t let shortsightedness ruin you.  If you need to sell. Sell.

I’m Not Making a Profit - Sometimes the best laid plans don’t work out.  If you bought a rental property and because of a change in the neighborhood or because of the condition of the property (which you can’t afford or don’t want to remedy) you’re not getting the rents you need to meet your financial goals, than it’s a good time to sell as any.

There’s an old saying that says, “it doesn’t make sense to throw good money after bad” and I believe that.  If you made an investment that has not turned out as well as you would have liked, stop the bleeding and sell, even if it’s at a loss.  Calculate how much money you’re losing and will likely to continue to lose if nothing changes and determine how much you’ll lose now by selling at a loss.  If you’ll save money by taking the loss now, than it’s as good a time to sell as any, if not, hold on to it and hope for the best.

Of course there is one good reason why now is actually a great time to sell rental property. Real Estate investors are out buying in droves, and the investors I work with particularly like to buy two and three family properties. So if you are willing to price it so that its attractive to the more “frugal” investment buyers, your property will be sold in a flash.

As you can tell from my statements, I’m a firm believer that the moment you think about selling is a good time to sell when you have a good reason to do so.  You cannot time the market.  No one can.  No one really knows when this market will recover just like no one knew when the market would crash.

If you don’t need to sell your property, than hold on to it until the market recovers.  Of course it’s always better to sell high, but if you need to sell it either because of financial reasons or just sheer desire, than right this moment is a good time to sell your rental property.  Peace of mind and a stress free life is worth much more than money in my book.

Establishing A Budget

“How much can I afford to spend on rent each month?”, is the first question you should ask yourself when you’ve decided to rent an apartment.  A good rule of thumb is that you should spend no more than 25-30% of your before-tax income on rent.

For example, if your take home pay per month (before taxes are taken out) is $5,000, than your rent should be no more than $1,500 a month.   Of course, that is just a suggestion and you yourself have to determine how much you can afford to pay.  Keep in mind that most landlords in Brooklyn require you to pay for your own cooking gas and electricity.  Thanks to all the electronics we use today, electricity can be a hefty bill reaching well over $100 a month when the air conditioner is running.

Also, keep in mind that you will need to have at minimum a month’s rent and a month’s security in cash available to pay your landlord when you sign the lease.  If you return the apartment back to your landlord in the condition you received it when you move out, by law you should get your security deposit back.

Should You Use A Real Estate Agent?

Of Course you should silly.  Okay, just kidding.  Whether or not you should use a real estate agent to help you find an apartment depends on a few factors.

1. Do you have the money to pay a realtor(r) – In most neighborhoods, the broker’s fee is a month’s rent, but in the more upscale neighborhoods it can be as much as 15% of the annual rent.
2. Do you have the time and patience to do it yourself? – As a realtor who works with renters, I take the grunt work out of looking for an apartment.  I almost always visit the apartment before hand, and if I haven’t, a reliable coworker has, and it has been described to me in detail.   If you’d rather spend your time doing something other than looking at dumps that sounded like the Taj Mahal in the ad you read, work with a realtor.
3. Do You Know Brooklyn? – Not all neighborhoods are created equal.  If you are coming from out of town and you don’t know the difference between Brownsville and Weeksville, then you should work with a realtor.

A Note On No Fee Rentals

There are only two reasons why a rental has no broker’s fee associated with renting it.  The landlord is renting it him or herself directly, doing all the background and credit checks himself (or for larger buildings the property manager is doing it), or the landlord is paying the broker’s fee himself.

But don’t be fooled, if a no fee rental is asking for first and last month’s rent and a month’s security, the landlord is using that second rent to pay the broker’s fee, so basically you are paying the fee, you’re just not supposed to know it.

What Neighborhood Do You Want To Live In?

Now that is the question.  If you don’t know Brooklyn at all, a realtor, friends and family who do can help you with that.  You can also do your own research by going to craigslist.com and searching by rent amount and the number of bedrooms you need.  By noticing what neighborhoods the apartments that meet your criteria are in, you’ll get a good an idea of what neighborhood you can afford to live in.

Gather the Paperwork

Landlord’s typically want to see the following:

1. Credit Report (which the landlord or realtor will run)
2. The past two years W2s
3. Two month’s worth of pay stubs
4. Verification of Employment
5. Photo Id

Save time and get yourself ready to start the application by having the needed paperwork with you when you go to see apartments.  Great apartments rent very quickly, especially in “hot” neighborhoods.  Don’t miss out.  By having the needed documents (except the credit report) with you, you can react much quicker and get the advantage over other renters who don’t.

As you can see, there a lot to think about and a few things to do if you want to make finding a rental apartment easier.  Check back for the next installment of my guide to renting an apartment in Brooklyn and I’ll tell how to determine if a neighborhood is right for you, tips on how to choose the right apartment, and how to get your landlord to love you (and perhaps avoid frequent rent increases).

If you’re looking find an apartment to rent or if you’re a landlord and you have an apartment to rent in Brooklyn, New York (especially in Fort Greene, Prospect Heights, Clinton Hill, or Bedford Stuyvesant) and you’d like to use the services of a realtor(r), feel free to give me a call at the number below, or email me by clicking here.

Happy Apartment Hunting!

Why would you want an all cash buyer as opposed to someone who has to get a mortgage from a lender?  Well here are three very good reasons:

1. Your Property Flaws May be Less of A Factor – Truth be told, almost all cash buyers are investors who are the kind of buyers who can deal with the fact that your house hasn’t been painted in 20 years, your kitchen is from the 70s, your stairs are leaning a bit to the left and the roof is obviously leaking.  The typical house buyer wants to purchase a turnkey “pretty house” and if yours isn’t (and you’re not inclined to fix the obvious problems), you might want to attract an all cash, investor buyer.
2. No Appraisal – Many real estate deals have died because the appraisal came in too low.  When you’re dealing with an all cash buyer, the buyer decides what the property is worth to him or her and once the price is agreed upon by you and your cash buyer, no one else’s opinion will hinder to the sale.
3. Cash Buyers Can Close Very Quickly - The main thing that can make the sale of a home drag out for months is the process involved in a buyer getting a mortgage.  A cash buyer can close very quickly.  I’ve heard of deals going from accepted offer to the closing table in 10 days when an all cash buyer was involved.  That’s ideal if you need to sell your property quickly.

Now that you can see the benefits of having a cash buyer interested in buying your multifamily home, how do you attract one?  Well here are some tips:

How to Attract the Cash Buyer

Information is key.  The investor/cash buyer is a real estate professional who probably owns several properties already.  They buy properties based on the numbers, not because it reminded them of grandma’s house in Georgia, so providing as much information as possible will help the cash buyer be able to see the value in your home.  Here are some facts and statistics that you, and your realtor, should have readily at hand:

Taxes – Of course, a good realtor can discover that quite easily, but why not provide that information.

Square Footage – Again, your realtor should be able to come up with this info, but you own the home.  No one knows your home like you do.

Rent Roll – If your property is occupied, letting potential buyers know how much rent they can expect to get can make the decision to buy your property a lot easier.   Also, do your tenants have leases?  When will they expire?  Will you be delivering the property vacant at closing? 

Home Maintenance & Repair History – How old is your roof?  Your water heater?  Your boiler?  Your windows?  When was your plumbing last updated?  What voltage is your electrical service? 

Oil or Gas Heat – (I’m shocked when the realtor doesn’t know this) 

Expenses – Perhaps you don’t want to admit how much you’re paying to heat your home, but that type of information will help buyers make more informed decision and perhaps get some of those who are hesitating off the fence.  Here is a list of expenses that you personally paid that you should include:

• Gas or Oil heat costs for a one year period
• Water/sewage costs for one year
• Electricity for one year
• Insurance costs for one year

Get a Realtor who works with investor/cash buyers. – If a realtor fails to ask about your rent-roll and tenant leases during the interview, you can be sure he or she doesn’t know much about selling multifamily homes to investors.

The Caveats

Of course, cash buyers are looking for a deal.  Some cash buyers are the equivalent of  “highway robbers” and are not looking to make a fair offer for your property.  When you encounter that type, don’t take it personally and counter offer a more reasonable price.  If he persists on being ridiculous, send him packing.  Not all investors are unreasonable money grubbers, so be patient.

But keep in mind that if you have not maintained your home and made the necessary repairs over the years, it might not be worth what you think.  Do the math yourself.  How much will it cost to replace your leaky roof, rotting windows and cat pee stained wood floors?

Be honest with yourself and decide how much you think your home would be worth if all maintenance item had been taken care of and subtract the cost of the repairs you know need to be made.  You might find the cash buyer/investor is not so far off the mark with the low ball offer he’s made.

If you are thinking about selling your Brooklyn, NY multifamily home and would like to know how attractive it would be to cash buyers, give me a call at the number below or email me by clicking here.  I will calculate the price the market says your home will sell for as well as figure out the cash flow a new owner is likely to get from your rentals and the ROI (return on investment).

Again, information is key.  Why not arm yourself with as much information about your multifamily home as you can?

The article states that Colby Sambrotto, a founder and former COO of ForSalebyOwner.com, spend six months trying to sell his 2,000 Square Foot 2 bedroom Chelsea condo himself. He used online listings on various FSBO websites and classified ads hoping to get the job done himself before he gave up and turned the listing over to a broker agreeing to pay 6% commission.

His licensed and experienced broker was able to attract multiple offers and ultimately facilitated the sale of Mr. Sambrotto’s apartment for $2.15 million, which was $150,000 more than the original asking price.

Can you sell your property yourself? Sometimes you can, but should you?  As the example above shows, letting a professional do it will get you much better results.

An experienced real estate professional has his or her finger on the pulse of the market and if she’s anything like me, she eats, drinks and sleeps real estate, making herself a fountain of real estate knowledge and know how.  When selling your most valuable asset, it only makes sense to hire someone who has experience.

After all, would you pull your own tooth?

The new rule was imposed by congress as part of H.R.5297:The Creating Small Business Jobs Act of 2010.  Hotly protested by small landlords (owners of multi family homes whose main business was not renting real estate) and REALTORS® like myself from around the country, the rule was seen as an onerous and unnecessary burden and another tax on the struggling middle class.  Gladly, Congress and the President heard the outcry.

As rarely happens in Washington, both houses of Congress quickly agreed that the rule should be abolished, and on April 5th, 2011 the Senate approved the bill and on April 15, 2011 President Obama signed it into law.  A similar requirement that was enacted as part of the health care reform legislation has also been repealed.

So if renting property is not your main business, but a way to supplement youmall mom-and-pop rental landlords rejoice. You’ve just been spared having to deal with yet another tax form.