.. Buying Successfully

... EXECUTE WITH UTMOST SPEED & KNOWLEDGE - The best advice comes from J. Moinian, one of the pre-eminent Manhattan and national real estate owners (see: "Moinian Finds 'Weak Spot', Real Estate Weekly, Dec 15, 2004"; http://www.findarticles.com/p/articles/mi_m3601/is_18_51/ai_n8590258). To quote from the article: " ... the Moinian Group was able to buy the Sears Tower only because a bidder who had already shook hands on the contract failed to close the deal quickly ... 'You can be the winner, but if [there are problems with the contract] they have the next guy ready. You get four to six hours to come up with a signed contract and the money.'  he said. In general, he advised potential investors to be aggressive, study the properties they want to buy and be ready to complete fast transactions. 'In the buildings that I bought, there is not an inch that I don't know' he said..." Bottom Line: Do Your Homework, Act Like Lightning.

... LINE UP FINANCING IN ADVANCE - Secure all your financing in advance, so you can act quickly.

... CONVINCE SELLER YOU ARE THE MOST CAPABLE & CREDIBLE BUYER; CLOSE AS QUICKLY AS POSSIBLE - Sellers want to minimize the risk of the sale not going through -- they want to know the buyer is financially capable and will execute quickly, with certainty. As a buyer, you want to make sure you close the deal, not somebody else -- do your homework, act quickly. Study the property extensively beforehand, line up financing in advance, have a successful track record, inform the seller of the extent your real estate holdings, etc. Take Mr. Moinian's advice; go to contract quickly. Re 1031 exchanges -- if closing delays of many months are required, it would be best to secure the transaction with a negotiated non-refundable deposit; consult experts if you are not one yourself.

... VARIOUS ISSUES - Pricing methods: Return on Investment (ROI); Selling Price/SF; Gross Rent or Income Multiplier (Selling Price/Gross Building Rent or Income). Buildable Square Feet: established by the Floor Area Ratio (FAR) for the zone, and the lot's footprint; determine the available air rights, and if they have been sold or not; determine what the building height restrictions are for the zone. Seller's mortgage: is it assumable; are there any pre-payment penalties; are there any defeasance or other early retirement costs. Deposit: 5% - 10%; under what circumstances is it refundable; under what circumstances is it non-refundable. Broker's Commission: Determine whether Seller pays the Buyer's broker's commission or the Buyer pays the Buyer's broker's commission (more common today than historically). Building: Delivered occupied with leases in effect, or delivered vacant, or..; violations - what types, if any -- building code, environmental; easements; integrity of the major building systems such as the elevators, furnace, oil tank, plumbing, electrical, roof, etc.; other. Condominiums: more straightforward approval process than for CO-OPs; check for common area & general maintenance charges; assessment fees, including anything approved and upcoming, but not yet in effect; real estate taxes; seller's NY City & State transfer taxes; buyer's mortgage recording tax; etc. CO-OPs: approval by the board may take many weeks; check for charges as for Condos above, plus the CO-OP "flip tax", which the buyer must pay. 1031 Exchanges: consult experts if you are not one yourself.