While every building and transaction is unique, here are some typical answers to common investor questions:
What documents should I prepare when I put an offer to purchase an investment unit? While your attorney or lender may ask for specific documents based on the structure of your deal, for the most part, you may need to provide a financial statement showing your assets, liabilities, earnings, and expenses. If you purchase in cash, you will need to provide proof of funds. If you're taking out a mortgage, a pre-approval letter from the bank will also be required. You may also be asked to provide your tax returns and other documents showing your financial situation.
How much are my closing costs when buying a condo? If you are not taking out a mortgage, prepare yourself for 3-4% of the purchase price for units under $1M or 4-5% of the purchase price for homes above $1M. If there is a mortgage, 4-5% Below $1M, 5-6% above $1M.
How long does it take to buy? Without a mortgage, the process will take about 2-3 weeks. If a bank is involved, it is usually 45 days. This is after the contract is signed, of course.
What are my total charges per month? As an owner, you will be paying taxes, common charges, and homeowner's insurance, as well as electric and utility bills. If you’re a landlord, the tenant will be paying for renter's insurance (on top of your homeowner's insurance), electricity, and all utility bills, except heat and hot water, which are covered by the building in NYC.
How much would it cost me to renovate an apartment in NYC? While this number changes greatly based on the size of the unit, its age, the quality of goods you will be using, and if permits and special expertise are required, the average price per square foot for renovations in NYC (in 2023) is $150-$250. Luxury renovations with a high level of customization will run you $400-$600 PSF.
What does the renovation process involve? A renovation can be small, involving mainly cosmetic work, or it can be more extensive and include structural work such as the removal or addition of walls, rewiring the electricity, moving water lines, replacing the floors, etc.
How long would it take to renovate a unit? It depends on the scope of the work needed. Painting, resealing floors, and replacing simple fixtures can be done in about a week. Larger renovations can take a month or over, depending on contractor schedules, building permits and approvals, and the availability of materials.
How can I collect payment from my tenant? It depends on whether or not you have a US bank account. Tenants can make a direct deposit into your account, pay via Zelle, Venmo, or PayPal (but these payments are subject to taxation) or they can mail you a check.
Do I need to pay a broker's fee for help to find an apartment for investment? Most likely no. Usually, the seller pays the buyer's broker fee. However, New NYC legislation could affect who pays the buyer's broker in case of a negotiation.
I don't live in NYC. Do I need to come to NYC to buy the apartment? No. These days we can handle the entire purchase process - including the closing - remotely. It is recommended, however, that you see what you are purchasing. In either case, consult your real estate agent on how to best approach the process.
Do I need to use your vendor services if I want to hire a Sapir Team agent? Absolutely not. We believe that the vendors that we have on the website are the best in their field, but we are happy to work with your preferred choice.
I’m looking to start in NYC, but later on, I would like to invest in a different area in the US. Can you help me? YES! Compass agents are located all over the US, and we can refer you to agents who are not in NYC and who specialize in your target market.
I’m Looking to invest in a year from now, when should I contact you? The earlier the better, but no later than 4 months ahead. The sooner we learn exactly what you are looking for, your budget, and your financial goals, the better prepared we can be to start vetting the right opportunities for you so you don't miss out on the market.
Can you help me buy, sell, and rent an investment unit? Of course! Our team's agents specialize in buying, selling, and even renting your investment unit. We do so while taking your buy-sell timelines into account and we vet your potential renters in advance.
I’m looking to invest in commercial properties. Can you help me? Yes. Our team specializes mostly in residential units, but we are well-connected to the top brokers in the industry. We can put you in touch with the right Compass agents that fit your needs.
How much of my time do I need to dedicate to the process before and after I buy? It depends on your financial situation and level of involvement. If you have no financial limitations, finding the perfect investment unit for your needs will be easier, even if it requires renovations. Searching for the appropriate unit to turn a profit on investment could take months, depending on current market conditions. You can save some of the research and legwork by using one of our team members: we will send you regular market updates, and collections of relevant properties, and can even tour units for you and take videos! After you purchase, you have the choice of managing the property on your own with your renter or hiring a management company to do it for you.
Which professional do I need to contact first? While there is no set order, we have uniquely built our process in such a way that when you contact us, we put you in touch with all other relevant parties for your deal. However, we recommend speaking with your attorney and a CPA/financial advisor at the same time you discuss your investment preferences with your real estate advisor. This way, you can make sure you structure your deal correctly both from a legal and financial perspective while remaining informed on what your funds can actually afford in terms of a home.
What should I pay attention to when I choose my professional team? Since NYC has a unique real estate market and regulations, we highly advise that you hire local, reputable professionals to represent you on all aspects of your deal. Your attorney should specialize in real estate transactions, specifically in New York City condominiums. Make sure your lender specializes in residential transactions and has been in the industry for over five years. When you shop for a lender, verify that they offer the right mortgage products for investors. Your contractor should be licensed and highly versed in local building regulations so they're able to anticipate regulatory requirements, and your CPA/financial advisor needs to have real estate knowledge to advise on the correct entity structure for taxation purposes. In any case, your chosen professionals should have a proven track record of success in the city, should be attentive to your goals and needs, and should be communicative and responsive so your best interests are being served.
Work With Dana
As your agent, Dana combines expert negotiation and market knowledge with genuine and honest communication in order to confidently guide you through the buying or selling process.