1
00:00:05.130 --> 00:00:08.190
Johny Fernandez: New York City is
considered one of the best cities for

2
00:00:08.190 --> 00:00:13.560
real estate investment for investor Erin
Sykes. She said she did not hold back

3
00:00:13.560 --> 00:00:15.810
when it came time to invest in the Big
Apple.

4
00:00:16.350 --> 00:00:21.780
Erin Sykes: I started investing in New
York City in 2019, which seems like an

5
00:00:21.810 --> 00:00:26.520
awful time to start investing because we
saw the pandemic come through in 2020.

6
00:00:26.790 --> 00:00:32.220
But I was very guided in terms of what I
was doing, and I actually paid under

7
00:00:32.220 --> 00:00:38.160
market value. So my, my apartment held
its value throughout the pandemic. And

8
00:00:38.340 --> 00:00:43.440
if I didn't need to flip out of it at
any time, it still would have shown

9
00:00:43.440 --> 00:00:44.340
appreciation

10
00:00:44.490 --> 00:00:47.520
Johny Fernandez: Sykes is an investor
and chief economist for Nest Seekers

11
00:00:47.520 --> 00:00:51.690
International. She walked me through how
she made her decision to purchase her

12
00:00:51.690 --> 00:00:52.680
investment property.

13
00:00:53.280 --> 00:00:58.650
Erin Sykes: When I purchase it, it was
listed at high nine hundreds, I paid

14
00:00:58.650 --> 00:01:05.070
905, and it was less than $900 per
square foot, which is terrific price

15
00:01:05.070 --> 00:01:10.680
here in Manhattan, particularly for a
location that is close to Tribeca and

16
00:01:10.680 --> 00:01:18.420
Soho, etc. So I put about $100,000 of
renovation in basically I built a wall

17
00:01:18.540 --> 00:01:23.100
added a 10 foot by 10 foot closet did
wallpaper and different types of

18
00:01:23.100 --> 00:01:27.690
finishes, we did the kitchen, all new
appliances, and in total came out to

19
00:01:27.690 --> 00:01:35.280
about 100,000. So all in I was
$1,005,000. Right now, in terms of what

20
00:01:35.280 --> 00:01:40.320
it would rent out for the about $6,000 a
month if I were to rent it out, my

21
00:01:40.320 --> 00:01:44.910
carrying costs per month are about
$4,000. My mortgage is 1.8%.

22
00:01:44.910 --> 00:01:49.280
Johny Fernandez: And while the numbers
added up for her, Sykes advice to do

23
00:01:49.280 --> 00:01:53.420
your homework if you want to invest. But
when it comes to freshmen investors,

24
00:01:53.420 --> 00:01:57.710
what red flags would you say they have
to be on the lookout for? And what

25
00:01:57.710 --> 00:01:59.180
advice did you get when you started?

26
00:01:59.720 --> 00:02:03.350
Erin Sykes: So I think it's important to
know what your end use for any property

27
00:02:03.350 --> 00:02:08.150
is. Are you going to live there
yourself? And then look to renovate and

28
00:02:08.150 --> 00:02:13.310
flip out at the same time? Are you going
to look to you know, have rental income

29
00:02:13.310 --> 00:02:18.170
and investment income? And in that
case... What type of rental income? Are

30
00:02:18.170 --> 00:02:24.470
you looking for a long term tenant? a
VR/BO, Airbnb situation? And in that

31
00:02:24.470 --> 00:02:29.150
case, are you even looking at buildings
where that's allowed?there are a lot of

32
00:02:29.150 --> 00:02:35.720
buildings between New York and Miami
where, it's just, it's not an option. So

33
00:02:35.840 --> 00:02:40.520
ask about the condo rules. Or maybe you
start looking at single family homes

34
00:02:40.520 --> 00:02:46.070
where you have a bit more control over
the type of rental usage you're going to

35
00:02:46.730 --> 00:02:47.360
go forward with.

36
00:02:48.060 --> 00:02:50.700
Johny Fernandez: According to real
estate professionals, the New York City

37
00:02:50.700 --> 00:02:54.660
housing market is recovering. And the
numbers can be compared to what was

38
00:02:54.690 --> 00:02:58.950
almost seen a decade ago. While the
market is hot. Sykes says investors

39
00:02:58.950 --> 00:03:03.870
should always be proactive, and
understand the process of investing any

40
00:03:03.870 --> 00:03:07.890
specific red flags that you know you
were told to be on the lookout or like

41
00:03:07.890 --> 00:03:10.890
for any freshman investor, they have to
be on the lookout for

42
00:03:11.500 --> 00:03:15.880
Erin Sykes: always do an inspection. And
that's to not only protect you, but also

43
00:03:15.880 --> 00:03:23.320
to protect the seller. So if you go
through and there's mold issues, termite

44
00:03:23.320 --> 00:03:29.740
issues, leaks, you can you have a choice
then of asking for a credit in terms of

45
00:03:29.740 --> 00:03:34.420
cash to remedy those situations, you can
ask the seller to remedy the situations

46
00:03:34.420 --> 00:03:39.310
provide you the receipts, or you can
choose not to move forward with the deal

47
00:03:39.340 --> 00:03:43.030
because maybe there are just too many
things looks like a shiny object on the

48
00:03:43.030 --> 00:03:45.970
outside but it's structurally not a
sound investment.

49
00:03:46.270 --> 00:03:48.970
Johny Fernandez: The other piece of
advice that sites shared with me was

50
00:03:48.970 --> 00:03:51.280
regarding how to finance your
investment,

51
00:03:51.490 --> 00:03:56.740
Erin Sykes: Anything under 5% is
considered a low mortgage rate. So we

52
00:03:56.740 --> 00:04:02.350
have seen these, you know one and a half
to 3% mortgage rates for so long for

53
00:04:02.560 --> 00:04:07.720
really years now. So when things ticked
up to three and a half percent, people

54
00:04:07.810 --> 00:04:12.700
got scared, and so rates are rising,
they're rising, they're still low. So

55
00:04:12.730 --> 00:04:19.000
it's just a way you can make back that
three and a half percent, you can make

56
00:04:19.000 --> 00:04:23.800
it back easily you can make it through,
you know, a stock with a good dividend,

57
00:04:23.950 --> 00:04:29.560
you could make it back through your
tenant, you can make it back more easily

58
00:04:29.560 --> 00:04:36.370
than you could if you just put full cash
down and lost the buying and investing

59
00:04:36.370 --> 00:04:38.770
power of that other. You know, 80%

60
00:04:39.410 --> 00:04:42.680
Johny Fernandez: When someone wants to
start off in investing, how much money

61
00:04:42.680 --> 00:04:46.430
would you say they would need?
Obviously, it depends. It's a case by

62
00:04:46.430 --> 00:04:48.980
case basis, but what would you say is an
average.

63
00:04:49.950 --> 00:04:54.780
Erin Sykes: So if you really use case by
case, however, you do need to make sure

64
00:04:54.780 --> 00:04:59.970
you have the 20% down and right now
you're going to want to take them

65
00:05:00.000 --> 00:05:04.620
mortgage, even if you could do
everything in cash rates are still so

66
00:05:04.620 --> 00:05:09.780
low that you're better off mortgaging
for the most part. So if you have the

67
00:05:09.780 --> 00:05:15.810
20%, and then six months carrying costs,
that would be a sound investment, you

68
00:05:15.810 --> 00:05:20.250
want to make sure that even if you don't
get it rented right away, that you could

69
00:05:20.250 --> 00:05:25.320
afford to to carry the property and not
get financially hurt.

70
00:05:25.810 --> 00:05:29.110
Johny Fernandez: And if you need money,
there are multiple options. Sykes says

71
00:05:29.110 --> 00:05:32.860
first, make sure your financial history
is cleaned by paying off credit cards

72
00:05:32.980 --> 00:05:37.300
and ensuring student loans are up to
date. Also save as much cash as

73
00:05:37.300 --> 00:05:41.710
possible, you will need it for a 20%
down payment then compare rates from

74
00:05:41.710 --> 00:05:45.940
different lenders. While being an
investor is an easy, Sykes says she

75
00:05:45.940 --> 00:05:46.840
doesn't regret it.

76
00:05:46.990 --> 00:05:50.980
Erin Sykes: It's absolutely the time to
invest in New York City, really, the

77
00:05:50.980 --> 00:05:54.640
last six months have been the time to
invest in New York City. And that's when

78
00:05:54.640 --> 00:05:58.750
we were seeing the biggest incentives
and biggest discounts. And we really got

79
00:05:58.750 --> 00:06:07.630
through Q4 2020. And saw prices almost
flat to pre pandemic. So that said there

80
00:06:07.630 --> 00:06:11.350
are those pockets of opportunity within
the city. So you're going to really go

81
00:06:11.350 --> 00:06:15.760
on and more case by case basis. If you
want those COVID discounts. You need to

82
00:06:15.760 --> 00:06:22.030
look to Midtown to Chelsea. Actually,
Brooklyn and Queens have been just doing

83
00:06:22.030 --> 00:06:28.240
so so well because there's tons of new
development opportunity. And you can

84
00:06:28.240 --> 00:06:33.310
still get in at a cost that's below
obviously that of Manhattan. But that

85
00:06:33.310 --> 00:06:38.590
said, the trend is so steep and the
curve is so steep for increasing prices,

86
00:06:39.160 --> 00:06:44.800
that you might have a better option in
midtown Manhattan than Brooklyn at this

87
00:06:44.800 --> 00:06:45.070
point.

88
00:06:45.510 --> 00:06:48.570
Johny Fernandez: In Manhattan. I'm Johny
Fernandez for deBanked News.