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The Art of Doing a 1031 Exchange

by Kijner & Sons International Realty

 

Many clients of KSI Realty NY Inc. are savvy investors and one of our favorite topics of discussion is the 1031 exchange. Those 4 mysterious numbers are simply an IRS tax code identification that allows owners of a business or investment property to defer the recognition of the capital gain tax normally due upon the sale of the property as long as it is re-invested in a "like-kind" property of equal or greater value through the use of a qualified intermediary.

We often start our conversations with our sellers and prospective buyers by including their attorneys, wealth managers, bankers and accountants around one table to ensure that their short, mid and long term objectives are well understood. We start with a snapshot of their current state and open the discussion on their goals in 7, 15 and 30 years from now. It is crucial that all professionals have a clear understanding of what is happening first as many fields overlap and all professionals around the table will ultimately shape the final real estate deal decision making process. This is a pluridisciplinary effort.

Many misconceptions and issues can arise from the lack of communication between key professionals. Clients may sometime fail to realize that legal objectives may come in opposition with fiscal, or real estate ones. Having a clear overview and a dashboard of all mechanisms gives you the ability to take informed decisions. Multiple test scenarios are often studied in order to come up with the final approach. On a daily basis, we speak to our clients' attorneys, insurance brokers, accountants and other key financial actors to facilitate the deals. We never give financial advises, practice law or overstep in regulated and licensed industries but we talk, exchange and facilitate the flow of real estate related information to ensure that our client's end goals are achieved.

1031 exchanges are often looked as mysterious, difficult, lengthy and potentially cumbersome. To the contrary, they are actually very easy, reasonably fast and very transparent if you use the right professional. The cost is very minimal, most qualified intermediaries get a small service fee plus a percentage of the interest of the funds they hold.  This is often far less than the potential capital gain that may be paid especially for investments that have been kept for a long time. The likelihood of heightened capital gains is stronger over long periods as market prices often rise. A good business practice is to identify your qualified intermediary via your trusted professionals such as your licensed real estate broker, accountant, banker or attorney. A solid track record and years of experience in serving as a qualified intermediary is key. We advise our clients to research the nature of the guaranties offered by the qualified intermediary. Making sure their money will be safe and limiting the risk to see lifelong savings vanishing into the "wild".

Many clients forfeit the idea of a 1031 exchange thinking they have to find someone who is willing to swap, or worst that they have to buy the exact same type of property they are selling. Another classic misconception we see, is that the exchange must be simultaneous or that the entirety of the proceeds must be used for the replacement property(ies). This is all false. Even very complexed real estate deals such as REITS or other trust funds can have adequate solutions such as using DST's (Delaware Statutory Trusts) which are recognized 1031 exchanges. One of the main advantages of DST's is the ability to exchange immediately without delay on the day of closing ensuring the continuity of passive income as it is often one of the determining factors for many of our investors that are looking at ensuring the perennity of their flow of income. 

As licensed real estate brokers, we do not financially benefit from the 1031 exchange, we do not perceive a commission and at KSI Realty NY Inc. we are not qualified intermediaries. The benefit goes 100% to our clients. We share our vast knowledge of commercial and investment real estate as good business practices to allow our clients to maximize their reinvestment. Allowing them to use the deferment of the capital gain portion, which is in essence free leverage that can be used towards a new purchase until it is sold again and/or reinvested. Currently, there are no limitation to the number of 1031 exchanges one investor can undertake as long as the replacement property is kept for at least 2 years, although certain exceptions may apply. As with everything, nothing is static and clients should always seek the assistance of their attorney, accountant as well as wealth and estate planners to anticipate new regulations that are in discussion. For instance, the new tax plan law that President Trump is pushing may have repercutions to 1031 exchanges as well as state and local deductions that would be eliminated (SALT tax) or standard loan interest deductions that many homeowners and investors are relying on. This could put a serious damper to the vivacity that the real estate market has seen lately especially since the slow but steady recovery from the subprime crisis of 2008.

We advise our clients to constantly scan the fiscal and legal environment to make the best investment decisions. Also keep in mind that even failed 1031 exchanges can have benefits. If you are not able to identify a like-kind property or meet any of the restrictions rules imposed by the IRS in the allotted time, you simply defer the payment of your capital gain up to 6 months.

For more information on how to purchase income producing or investment properties, please contact us for your complimentary session.

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Article originally published on October 19th, 2017 on KSI Realty New York website at http://www.nyc2buy.com/blog/the-art-of-doing-a-1031-exchange

KSI Realty NYC Renter's Guide

by Kijner & Sons International Realty

Kijner & Sons International Realty is thrilled to share with you its New York City Renter's Guide. If you have ever wanted to navigate with ease the maze that is New York City's rental market, this illustrated guide is right for you!

Whether you are from New York yourself or a recent transplant, you will learn some of the most common local leasing terms, know what to expect when putting an application in and how to be fully prepared when looking for your next home in Manhattan. We make the leasing process easy, convenient and fun for you! Contact us now to get you started on your next NYC apartment search.

We have thousands of listings for rent all over the city whatever your budget or needs are. We look forward to assisting you!

Click here to view our latest properties for rent in New York City. For any inquiries, contact us today at nyc@kijner.com or schedule your private consultation at our conveniently located Midtown East office.

Click here to download your KSI Realty NYC Renter's Guide


Investing in New York City with KSI Realty

by Kijner & Sons International Realty




Kijner & Sons International Realty
 is your privileged partner for all your real estate transactions in New York City. Whether you are looking to buy, rent or invest in the Big Apple, we can assist you all the way thanks to our multi cultural and multilingual team of real estate specialists as well as our extensive ancillary network of licensed experts from attorneys to accountants and from mortgage brokers to property managers to cite a few. 

We are buyers' representatives. We strive to find you the best options and bring you tailor-made solutions based on your specific profile, needs and real estate goals. 

Check our latest listings for rent and sale directly from the comfort of your computer as they hit the market and are updated daily on our platform by visiting our dedicated search pages:

General Search
Rentals
Sales
Open Houses
New Developments 


Are you undecided about where to live next? Let us guide you through New York's numerous neighborhoods from Manhattan to Chelsea, from the East Village to the Upper West Side or from Midtown to Roosevelt Island. 


Contact us today at nyc@kijner.com or at +1 (646) 480 0667 to learn how we can help make your real estate dream a reality. We would be happy to schedule a complementary one-on-one consultation with you at our conveniently located office in Manhattan

Fire Prevention - Tips and Reminders for Staying Safe

by Kijner & Sons International Realty

Fire Prevention Week falls during October, and this month is a great opportunity to review fire safety and preparedness for your home and family. Preventing a fire in the first place can mean the difference between safety and devastation.

Cooking is the most common causes of house fires, and as a daily activity the potential for problems is high if care is not taken around the kitchen. While cooking, never leave cookware on the stove unattended. It can take just moments for hot oil or grease to flare up, and a pan of forgotten food can go up in flames. Baking soda can be used to put out a small kitchen fire if caught right away – keep a package close at hand for ready use. Avoid wearing clothing with very long or loose sleeves while cooking as they can easily catch fire if they make contact with an open flame or hot burner. Keep towels and flammable pot holders away from the stove. 

Electrical cords and appliances should be kept in good repair, and any damaged wires or sockets should be replaced right away. Don’t overload electrical outlets – use power strips only when necessary and make sure they are properly rated. Electronics and small appliances should be unplugged when not in use to avoid potential problems.

Keep the dryer vent hose free of lint and other buildup, as dryer heat can easily spark a fire there. Check and clean the hose at least once a year for best results. Depending on how and where the hose is installed, the process can be as simple as using your vacuum cleaner to remove buildup. Bonus: the dryer will also run more efficiently with a clean hose. There are also professional services that will clean your venting system for a nominal charge. Never leave the house while the dryer is running – if a fire should start, you will only discover it too late.

Should a fire occur, fire extinguishers need to be easily accessible to the kitchen and laundry areas. Make sure any extinguisher is labeled for use on the three common types of fires – grease, paper/wood, and electrical. These multipurpose extinguishers are labeled as “A B C rated.” Using the wrong type of extinguisher on a particular fire can make the situation worse and can even be life-threatening. Water should never be used on an electrical fire or on grease fires as this will just cause the fire to worsen. 

Smoke alarms should be installed on every level of the home and outside all sleeping areas. The newest types of residential smoke detectors have 10-year batteries, and many are available in updated, low-profile designs. If your smoke alarms use replaceable batteries, change the batteries once a year; many people use the transition from Daylight Saving Time as a reminder to do this task. Hard-wired smoke alarm systems should be inspected according to the installer’s or manufacturer’s instructions.

Make – and practice – a family escape plan. Make sure each family member knows how to quickly get out of the house to safety in the event of a fire. The National Fire Protection Association recommends having two ways out of the house, in case smoke or flames make one of the exit routes impossible to use. Smoke can fill a house within minutes, making it difficult or even impossible to see the way out. With preventive measures, you can lower the chances of a fire, but careful planning can help you and your family survive if the worst happens.

Questions? Comments? Are you looking to buy or sell a house, a condo, a coop or a villa in Miami Florida or New York City? Contact us today at info@kijner.com.

Sick House Syndrome

by Kijner & Sons International Realty

What Is Sick House Syndrome, and What Causes It?

Sick House Syndrome occurs when a house can’t “breathe” and rid itself of indoor pollutants, resulting in poor indoor air quality – a “sick house”. Inadequate ventilation allows these pollutants to build up, causing potential health risks to the home’s occupants. Young children, the elderly, and some chronically ill persons are most susceptible to the effects of Sick House Syndrome.

Common sources of indoor pollution include tobacco smoke, certain carpeting materials, furnaces and fireplaces, pressed wood cabinets and furniture, and household cleaning products. In addition, a buildup of moisture can cause mold, which can grow uncontrolled inside walls, crawlspaces, and other areas. Mold spores are released into the air and can also travel throughout the home via heating and cooling ductwork.

How Can Indoor Pollution Be Reduced?

Source control is usually the most effective way to improve indoor air quality. In some cases, eliminating the specific sources of indoor pollution – for example, removing carpets, repairing and maintaining faulty furnaces – is all that is necessary. It’s also a good idea to have heating and cooling ducts cleaned every few years.

For many other offending substances, improving ventilation is a key means of decreasing indoor pollution. These include tobacco smoke, cleaning products, and moisture buildup. Many newer homes in particular are so well insulated and sealed that only a very limited amount of fresh air can get in. In this situation, using attic or window fans and opening windows when weather permits are easy and inexpensive ways to increase ventilation. Over the years, tobacco smoke can actually be absorbed by walls, floors, and ceilings and may need to be professionally removed.

Asbestos and lead do not normally cause problems if they are undisturbed, but these and other hazardous substances should be analyzed by a qualified professional to determine if sealing, abatement, or removal is warranted. The presence of these materials may also need to be included in disclosure forms when selling a home, so special attention is warranted in these situations.

Questions? Comments? Are you looking to buy or sell a house, a condo, a coop or a villa in Miami Florida or New York City? Contact us today at info@kijner.com.

 

The Difference Between a Condominium and a Cooperative

by Kijner & Sons International Realty





Many people looking to buy a property in New York City are often debating between investing in a condominium or a cooperative. But what is the difference? Before choosing one over the other, let's review their definition, your ownership rights and what every buyer should know before acquiring such properties.

What is a condominium

A condominium is a real property transaction where ownership rights are fee simple, that is, the broadest form of ownership available. You are allowed to you to use and possess your property and you may own your condo in any form you wish (in severalty, as joint tenancy, as tenants in commons or tenants by the entirety).

With a condominium you own real estate - the space inside the unit - and you share in the ownership of the common elements such as the swimming pool, the walkways or the garage. As such, you will receive a deed to your unit that will include an undivided interest in the common areas. You can learn more about your rights in the condominium bylaws. Subletting is possible with some restrictions depending on the condominium building.

What is a cooperative or co-op?

With a co-op, you own share in a cooperative's corporation, which is not real property but personal property. Since you do not own any real estate, you do not have fee simple ownership rights. You own shares which reflect equity in the corporation and instead of a deed, you will receive a proprietary lease and stock certificates.

A cooperative is a not-for-profit corporation, a joint venture with its shareholders, formed for their benefit and governed by them. As such, the cooperative is the one owning the land, the building and all rights and interests. In short, you have a right to occupy your unit and use the common areas and facilities. And of course, unlike with buying a condo unit, we will need to submit a thorough application known as a board package that is unique to each co-op. This package will be reviewed, approved or denied by the co-op board based on a variety of personal and financial documents including but not limited to your purchase application, a contract of sale, employer and personal reference letters, your income tax returns, a financial statement listing assets and liabilities...Finally, subletting is much more restricted and is some occasions, not allowed.  

What is a Condop?

Some of you might have heard of a hybrid between a condominium and a cooperative known as Condops? What is it you ask? 

A condop is a mix-used building where the residential portion (co-op) is separate from the commercial component (condo). This form of property is appealing to many developers or sellers for tax reasons. They retain ownership of the non-residential space in the building that they use for commercial purpose. In a condop, a buyer will receive co-op corporation share and a proprietary lease. Condops are usually based on the 80/20 rule where 80% of the building is used for residential purpose and the remaining 20%, for commercial purpose.

Do you have additional questions? Are you looking to buy a condominium or a cooperative unit in New York City? Contact our Manhattan office today at nyc@kijner.com

A Night with the Art

by Kijner & Sons International Realty




Summer nights in New York are vibrant and filled with cultural and social events. This is what makes this city so attractive to millions of creative minds, artists and art lovers around the globe. KSI Realty New York Inc.’s Broker and President Marc-Henri J. Kijner, was invited on June 21st, 2016 to discover iconic British born Shantell Martin's latest exhibition "Gone",
 at 3 Howard Street Gallery in the heart of Nolita. This private, invite only reception announced the visual artist imminent departure from New York City, and celebrated the impact it had on her practice over the past 7 years. Shantell is best known for her stream-of-consciousness drawings and lights projections.  




The event was impeccably hosted by a funky DJ, several Bombay Sapphire cocktails bars, and trays of French cheeses and sweet Beignets
 like in New Orleans. The Art displayed on white walls allowed the artist's inner feelings to be expressed to a diverse audience. This is another testimony of the influence that New York has on the world's culture scene. It is a constant reminder of the source of inspiration and the "Muse" that this grandiose city plays for many recognized and acclaimed artists such as Shantell Martin. 




KSI Realty New York Inc., has several commercial and residential properties available for rent or sale that are suitable for artists such as live/work lofts. Please 
contact us with your requests. One of our expert licensed salespersons will be delighted to assist you as well as share your passion for art, and everything that it encompasses.

REBNY's Meeting - The State of the Manhattan Market

by Kijner & Sons International Realty




KSI Realty New York Inc.’s Broker and President, Marc-Henri J. Kijner, attended a panel discussion at the Real Estate Board of New York where top brokers and industry leaders discussed the state of the Manhattan market.

The 421 A program that was created by Mayor Bill De Blasio expired last January and experts composed of attorneys and industry leaders argued that due to the lack of tax incentives, developpers would most likely slow the development of affordable housing projects. Hence putting further emphasize on the hot market of the sub $3 million price range.

Resale units tend to stay on the market for less than a couple of days and buyers are competing even more to snatch their dream property. Higher cash reserves and better credit scores can certainly help strenghten the approval by the boards of both co-op and condominium buildings that prospective buyers are looking at.

New developments are generally not offering discounts but Attorney Steven Matz, one of the managing directors at Katz & Matz, expressed that they are seing more and more concessions on bigger deals such a free storage units being offered, upgrades given on fit and finish, or credit applied towards the transfer fees to attract buyers that are comparing with more affordable resale units, which tend to be larger but often in need of full gut renovation.

The conversation continued on the topic of rental market. Afterall, 70% of the real estate market in Manhattan is comprised of rental properties. Many brokers including myself, argued that June is the official kick-off month for the appartment hunt that thousand of new comers will engage in until late September.

There is no better time than now to find new rentals whereas landlords have updated, refurbished and repainted their units to attract as many quality tenants as possible. Using the help of a qualified and diligent licensed real estate salesperson can turn out to be an invaluable investment to help tenants snatch the best properties as soon as they hit the market. 



We at KSI Realty New York, believe that clients should sit down with our expert agents and discuss their needs. We help our valued customers pin point their area of interest based on their search criteria and finally draw potential property matches with the help of our online 
search tool.

During this panel discussion, we also talked about the emerging areas of Manhattan and everyone agreed that Harlem with Hamilton Heights was the most promising area. With beautiful browstone townhomes that can be up to 50% more affordable than their equivalents in the Upper West or East side of Manhattan, these products are a must buy! The extended subway lines on 2nd Avenue is also benefiting South Bronx and quality and affordable properties are also looking very promising for prospective investors.

For continuous update on the Manhattan market and lifestyle events about the city that never sleeps, please continue to follow us. For any questions, email us at nyc@kijner.com.

State of New York City's Housing and Neighborhoods in 2015

by Kijner & Sons International Realty




KSI Realty New York Inc. is proud to share with you the latest
 report from NYU Furman Center for Real Estate and Urban Policy, which was released earlier this week. Some of the highlights include crucial data regarding demographics, trends and the prevalence of rent burden between low income and high income gentrifying neighborhoods.

To download the full report entitled "State of New York City's Housing and Neighborhoods in 2015", please click here.

Looking to buy or sell a property in New York City? Contact us today at nyc@kijner.com

Hublot 5th Avenue Grand Opening

by Kijner & Sons International Realty



Above picture courtesy of Hautime.com





Luxury watch brand HUBLOT, which is part of the LVMH group, celebrated its 5th Avenue boutique Grand Opening at the Guggenheim Museum on Tuesday April 19th 2016.

KSI Realty New York Inc.’s broker and president, Marc-Henri J. Kijner, was one of the few A-listed attendees. As a true watch aficionado and long time OMEGA, PATEK PHILIPPE and AUDEMARS PIGUET brands collector, Marc was able to experience the unveiling of some pretty impressive watches and the brand's latest collection such as the HUBLOT Big Bang Unico Usain Bolt.

 

The party was a true New York Experience, with Grammy winner and rapper Wyclef Jean performing live some of its newest hits as well as some classics from its former group the Fugees.

Eccentric and genius architect Peter Marino, was attending as well, inclusive of the 100m and 200m Jamaican Olympic super star Husain Bolt.


Wonderful Moet Champagne, aged Scotch, cocktails, and canapés with caviar, blue crab, Ahi tuna sushi and truffle mac and cheese were served during this festive event.

The new HUBLOT flagship store will be located on the famous 5th Avenue between 57th and 58th streets. This is yet another example of New York being the number one leading luxury city in the world where top real estate, retail and residential are exchanged for the benefit of New Yorkers and International visitors alike.



If you are looking to get your own prime retail space, a luxurious secondary home, or simply a rental property in the city that never sleeps, please contact us here. 




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