WHAT does it feel like to sleep in a pile of cash? If you’ve owned a New York City home for a while, that’s exactly what you’re doing.
“It’s definitely a seller’s market,” says Jonathan Miller, president of leading real estate appraisal firm Miller Samuel.
As evidence, Miller cites the much ballyhooed climb of the average sticker price for a Manhattan apartment. In case you haven’t heard, it hit more than $1 million in the second quarter of this year.
“It’s amazing, because even though we’ve been through a weak economic period, it seems that people still want to buy in Manhattan,” Miller says.
The story is much the same in the outer boroughs, where prices have doubled, tripled and even quadrupled in the last 10 years, according to Dominick Neglia, president of Neglia Appraisals.
“The percentage change is probably even greater than in Manhattan,” Neglia says.
The message is clear: It’s not a bad time to cash out.
As more proof, we offer stories of four savvy sellers. We give you their gross profits – so you can assume a broker’s fee of up to six percent – but that still leaves a pile left over. (Remember, capital gains are tax free, up to $500,000 per couple, if you’ve lived in a place for two years.)
Check out the surprising ways they’re using their newfound riches.
JOE KAPLAN – SMOOTH SAILING
IN the near future, Joe Kaplan could be living in the Caribbean and supporting himself by escorting tourists on sailing vacations on his new 60-foot catamaran. Or perhaps he’ll simply pay off his student loans and buy a small boat that he can sail from the New Jersey Shore.
Either way, he’s got options because he’s about to score big by selling his co-op.
Earlier this year, one of Kaplan’s friends, who happens to be in real estate, suggested Kaplan find out how much he could get for his one-bedroom apartment. Kaplan was surprised and extremely pleased with the results.
It turns out that in the two years since he purchased his East 20s digs, the value of his apartment has doubled.
“When my pal suggested I look into selling, I had no idea how much I could put it on the market for,” says the 31-year-old, who works in software sales. “After I found out, I initially put it up for a little over what I expected to get, but had to lower it after I got a couple offers just under asking.”
He’s now asking $379,000 for a pad that cost him $190,000. Hunie Kwon at JC DeNiro & Associates has the listing.
Once his place sells, Kaplan’s going to take a break from homeowning for a while. He’s opted for a sublet in the Village.
“Eventually, I might look to buy in Brooklyn or Hoboken, but I don’t want to get into anything too quickly,” he says. “I really just want to take time off and travel for now.”
CASHING IN BIG – STEVEN ESTOK – NOVEL IDEA
WHEN Steven Estok’s job in advertising was eliminated in February, he briefly found himself without a plan and figured now was as good a time as any to re-evaluate.
“I always wanted to be a writer and liked the idea of going back to school to get an MFA, but I didn’t want to have to work while doing it,” says the 45-year-old. “That’s when it occurred to me that if I sold my brownstone, I could afford to go back to school and not work.”
Just as he was rolling this around in his head, he got a call from Abdul Muid, a Corcoran Group agent who had helped him rent one of the three apartments in his four-family Fort Greene home.
Muid told Estok that a house a couple of doors down had just sold in a bidding war and Estok might want to think about selling.
“It was kismet,” Estok says.
Estok put his brownstone on the market, and it sold in two days – to the people who had lost the bidding war down the street – at a “high-six-figures” profit. He more than doubled his original investment in the three years he owned the property, which he bought for $700,000.
While Estok waits to start his Master’s program (he’s currently applying), he’s renting in Manhattan, going to Rio on vacation and planning a trip to Paris, where he can research his first novel.
“Eventually, I’ll buy another place for myself,” says Estok, who’s also considering buying a rental property. “I know a lot of people who’ve made money in real estate. I’ve done that here and I hope to replicate that again.”
DAREN HERZBERG – NEW DEVELOPMENTS
AFTER I bought my first apartment in 1995, the market started to go nuts,” says Daren Herzberg, a 34-year-old family man. “So I rented it out and bought another and rented it out and bought another.”
Yes, Herzberg is a veteran of the real estate game, but it’s only become his full-time passion. Herzberg just swapped his 12-year commodities-trading career for one as a real estate agent with the Corcoran Group.
“Commodities started to get old, and I really love real estate,” he says.
Not to mention it puts him in an ideal spot – right in the middle of all the real estate wheeling and dealing – to pursue his own property ventures on the side.
“I am still doing my own proprietary buying, selling and renovating,” he explains, referring to the private equity fund for real estate development he was able to start with the cash he culled from -what else? – the sale of his home.
Herzberg invested $1.15 million in a TriBeCa loft in early September 2001. Now it’s worth a cool $2.3 million.
“It doubled in price in two years and I decided to cash in,” he says.
He promptly used the scratch to start the investment fund, allowing him to do for investors what he’s done for himself over the years.
Herzberg is currently looking into his next project, the development of an entire building.
“Everyone’s a hero in a good market,” he says.
KENYA JIU – FINANCIAL AID
WHEN Kenya Jiu and her husband, Dennis, bought their Fort Greene brownstone, they thought they’d be there for the long haul.
“A lot of people invest in something to make a quick buck, but we really planned on staying,” says the 30-year-old Jiu, who’s a project manager at a law firm in Brooklyn.
So they put a lot of love and work into creating a home that would suit them and their two young children.
“We did tons of renovation. It was all about what would make us feel comfortable and what gave it character. We thought our kids would grow old there.”
The kids could have done just that, but their parents found an even more attractive option, thanks to the seemingly unstoppable New York City real estate market.
In just three years, the Jius’ triplex had appreciated at the same percentage that the last owner had waited 30 years to see,. When Jiu and her husband discovered this, they knew that there was no choice.
They had to sell.
“For something like that to happen, it felt like once in a lifetime,” Jiu says of the opportunity to double her family’s money.
With the help of the Corcoran Group’s Nicole Thompson-Adams, it took the couple less than a month to sell the house they bought in 2001 for $640,000. They’re now flush with $1.3 million – which they’re putting to good use..
“We realized we could pay off both our student loans from NYU, as well as put some money away for our children’s education,” says Jiu, who has an 8-year-old son and a 5-year-old daughter. “Just to be able to start off with a clean slate brings a wonderful peace of mind.”
“It was hard for us to leave the house,” says Jiu, who’s now renting a loft. “But the market … People keep saying it’s going to stop and it just hasn’t.”
And as difficult as it might have been to walk away from the home, Jiu’s happy to know that it’s in appropriate hands.
The new buyers “are a young family who are just starting out,” Jiu says. “I thought they were the right fit.”