Go to gocondo.nyc for a free copy of my book in exchange for an honest review on Amazaon. -Thanks
Go to http://www.gocondo.nyc to sign up for a free copy of my book, “How to buy a condo in NYC” in exchange for an honest review on Amazon.
WE ARE TARGETING A NOVEMBER 1ST LAUNCH DATE!
Visit http://www.gocondo.nyc for a free copy of my book, “How to buy a condo in NYC” in exchange for an honest review on Amazon. – Thanks
go to http://www.gocondo.nyc for a free copy of my book, “How to buy a condo in NYC” in exchange for an honest review on Amazon.
Watchcase in Sag Harbor From the Long Island Market Report: Older homeowners downsizing and younger couples moving from the city have fueled a recent surge in the number of Long Island condominium projects and their trend toward city-style designs and amenities, according to developers and brokers. An analysis of attorney general filings for condo projects…
It depends on your comfort level. The reason why you get an inspector when purchasing a coop or a condo is to try to determine, not only the current physical condition of the unit but also the general condition of the building’s structure, mechanical systems and common area. Problems with any of which, could potentially lead to future increases in monthly common charges/maintenance or assessments. These issues may not come up when reviewing the minutes of the board (if a cooperative) and may not be in the offering plan if not the initial offering from the building’s sponsor. Even then, you never know. If you decide to forego an inspection, assume a worst case scenario when contemplating to buy a unit. Even then, you can never anticipate everything.
Below is an article about the bright future of a much beleaguered property known as the “Broken Angel House”. Alex Barrett and Barrett Design and Development who purchased the property and are developing the building are clients of Marcus Attorneys which represented them ( by Guillermo Santiago, Esq.) on the acquisition.
I can honestly say that in our years of representation they have always put out attractive and quality projects. If anyone can fix this broken angel, they can.
I can’t wait to see how it turns out. There will be future posts on the progress of the development as it becomes available.
News from Barrett Design & Development
Clinton Hill Development Boom
As land prices in downtown Brooklyn climb, investors
are migrating north to the area that hosts four subway lines
Barrett Design and Development, led by Alex Barrett, is reinventing one of the community’s beloved properties, 4 Downing St, formerly known as the Broken Angel House, as named by the pair of artists who lived there and turned it into a piece of art. (It also was the backdrop for the ’05 movie Dave Chappelle’s Block Party.) Barrett acquired the property for $4.1M in January. The four-story, 10k SF building will become eight 1,100 SF condos by Q1, and a vacant lot next door at 8 Downing will become a four-story, duplex condo building within 12 months.
Our friends at Honest Buildings clued us into the project, which has a storied history. Alex believes it was built in the late 1800s as an eight-unit railroad apartment building (albeit uncommonly wide at 40 feet). The previous owners, artists Arthur and Cynthia Wood, acquired it in 1979 and made it quite the single-family home. They removed floors to create a ziggurat-style interior and added artistic embellishments, including a 50-foot tower. The additions weren’t in line with building codes, and the property got the attention of the city after a fire in ’07. Arthur and a partner developer started removing the code violations, but the JV had financial troubles, and eventually the bank foreclosed.
Alex and team have finished removing the illegal additions (they’re keeping others). He expects to launch sales in the fall. His company also partnered with Groundswell, which identified a local artist – Misha Tyutyunik, who lives three blocks away – and The Urban Assembly Unison School, just half a block away, to work on the mural that covers the construction site fencing. The mural traces the site’s past as a farm, apartment building, Broken Angel House, and soon-to-be condos. When construction is complete, the mural will move to the school.
[Located just a short walk from 4 Downing St], the focal point of Clinton Hill’s residential development, says Massey Knakal’s Stephen Palmese, is the three-year-old Putnam Plaza at Fulton, Grand, and Putnam, part of the Department of Transportation’s initiatives to put unusual intersections (this one is a triangular intersection) to better use. Already, the public project has attracted trendy eateries Lox and Hill Cafe to open there.
More information on area development can be found in the original article:
To gain some perspective of what they started with, below is a video (Hugo’s Peep Box) of the building prior to development.
TAX INCREASE #1 – 20 PERCENT CAPITAL GAIN TAX IN 2011
On January 1, 2011, the capital gain tax reduction that was signed into law by President Bush under the Tax Increase Prevention
and Reconciliation Act will “sunset.” The tax rate will revert from the current 15 percent rate back to the former 20 percent capital
gain tax rate that was in effect prior to 2003.
TAX INCREASE #2 – 3.8 PERCENT MEDICARE TAX IN 2013
Beginning in 2013, the national health care reform legislation that became law in March, 2010, imposes a new 3.8 percent tax on certain investment income. The new tax will apply to single filers with incomes over $200,000 and married taxpayers with incomes over $250,000. Under the law, the investment tax provisions in Chapter 2A of the Internal Revenue Code are placed under the heading “Unearned Income Medicare Contribution.”
In general, this new Medicare tax will apply to investment income that is subject to income tax, which includes capital gains. Pursuant
to IRC Section 1402 (C)(1)(A)(iii), the investment income to which this new tax applies includes “net gain” (to the extent
taken into account in computing taxable income) attributed to the disposition of property that qualifies as a capital asset under Section 1221 (capital gains), as well as gains on other property that are considered part of ordinary income. Also of relevance for rental property owners, this new tax applies to a real estate investor’s rental income if they have income above the $200,000/$250,000 income thresholds.
The net effect of both capital gain tax increases is a new 23.8 percent tax rate for higher earners—the highest rate for long-term
capital gains since 1997. The Joint Committee on Taxation estimates the new
Medicare tax on investments will cost taxpayers
over $30 billion annually. Additionally, the modified adjusted gross income threshold at which this Medicare tax will apply will
not be indexed for inflation, which means an increasing number of taxpayers will be snared by this tax provision.
Overall, the economic impact of these tax increases will be felt by the very investors who help promote long-term
economic growth. In 2007, taxpayers with incomes greater than $200,000 reported 47 percent of all interest income, 60 percent of
all dividends and an amazing 84 percent of all capital gains.
THE COMING TAX INCREASES – A COMPARISON
Current January 2013
Conventional Short-Term 35.0% 43.4%
Conventional Long-Term 15.0% 23.8%
AMT Short-Term 28.0% 31.8%
AMT Long-Term 15.0% 23.8%
A SOLUTION AND WAY TO DEFER TAXES – 1031 EXCHANGES
Since 1921, 1031 tax deferred exchanges have been a proven tax saving strategy that helps real estate investors improve their
investment position through the ability to not recognize Federal or state capital gain taxes. See the attached bulletin from Horizon Land Services.
The real estate economy is slowly picking up encouraged by an abundance of condominium units on the market, Sellers motivated to move them, historically low mortgage interest rates and the first time home buyer tax credit due to expire (unless extended) at the end of April, 2010. I feel the need to revisit certain items of due diligence a prospective purchaser must look at when buying a condo.
As posted on this blog on September 17, 2007: There are currently a great number of sponsor sold condominium units in the New York City market place. A sponsor is the person or entity who is developing a building as a condominium (or cooperative). Like everything else, there are condominium developments that have been built well and others that have been built poorly. Prior to entering into contract, the offering plan and all amendments should be reviewed. The offering plan is a full disclosure of a project to the public that is filed through the New York State Attorney General’s Office. The offering plan lists the name of the sponsor of a condominium building, its principals and other developments built by them. Research the names of the principals and their other developments on the internet. You may find references to any of the above and if the buildings and the units are built well or poorly. Even if the price is right, the carrying charges low and the location of the building prime, you do not want to invest in a building or unit that is poorly constructed. It is more likely that you will have problems in the future. Even if a warranty is given by the Sponsor, if a history of poorly constructed buildings exists, you may still need to go to court to enforce your warranty behind other disgruntled purchasers.
Another thing a potential purchaser of a condominium unit can do is speak with the current occupants of a condominium building. Unlike real estate brokers who have an underlying motivation to sell a condo unit, an existing owner of a condo unit in a building typically does not have an agenda to hide the truth from anyone who asks. People love to complain. If there are problems you will hear about it. I would ask more than one person just to make sure that the complaint spoken of, is not the exception and but the rule. One complaining unit owner may have a particular set of circumstances that do not necessarily apply to the entire condominium building and taint one’s decision to buy.
It may be beneficial for the prospective purchaser of a condominium unit (whether a resale or a Sponsor sold-newly constructed Unit) to engage the services of an engineer or home inspector before purchasing a condominium unit. It is not only good to know what the physical condition of the unit you are purchasing, but it is important to know the overall condition of the condominium building. The need for repairs to the common elements and infrastructure of a condominium building may result in unplanned assessments that may not fit into a prospective purchaser’s budget.
One of the things prospective purchasers need to look at is the number of the units in a particular condominium building that are sold or in contract. If the number of unsold units is too great, banks will refuse to give mortgages in that particular building and prevent a person from buying a unit in a building despite good credit. Some developments are able to get a building “pre-approved” by a particular lender and may even require a purchaser obtain a pre-approval letter from a particular lender who has already consented to providing mortgages in a particular building.
I came across a recent New York Times article written by Elizabeth Harris that highlighted certain things a prospective purchaser must look at prior to signing on the dotted line. I thought it was informative and encourage you to read it.
I do not do this very often but I will tell you that I have worked a number of times with Tom Le of the Corcoran Group who was quoted in the article. I have found him to be very knowledgeable in the field of condominiums. He is a very savvy customer orientated broker. All of my clients who have used him (developer and consumer alike) have been very happy with the services provided.