Manhattan real estate

[nyc999]

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If your income at a wall st firm is 400k, you're looking at a bonus of maybe 280 or so, of which 20% goes to restricted stock. so that's 56k to stock that you can't touch for years, and then you have to pay uncle sam his 45% cut. So you're left with a check for maybe $125k in cash.

When you factor in the cost of going out in the city, weddings, food in general, clothes, car payments/garage/insurance, life insurance, kid costs, you're not going to be able to afford a $2 mil apartment on $400k. I just don't buy that.

I guess if you never left your apartment and ate ramen all year and had no furniture, and had no help at all for your kid and did nothing above and beyond taking the subway to your job and eating grocery store food every day, maybe you could just get by, but that's a miserable existence, especially if you have a stressful job.

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1. Who said anything about Wall St or restricted stock? Either restricted stock has value that you can count on or it doesn't. And bonus =/= real income unless you're talking about minimum expected or guaranteed.

2. What kid costs? Note that I was not talking about your particular situation.

3. Uncle Sam does not take 45%. Besides, even if he did, you'd be looking at after-tax cash of $18,920, according to the #'s you provided.

4. You don't need a car in Manhattan

5. Your company provides for life insurance

6. Basic food and clothing are only marginally more expensive in the city.

7. Ditto for going out. More options =/= more expensive

8. Furniture = fixed cost

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Do you know anyone who lives in Manhattan, makes 400k or less, and owns a place for $2 mio or more? I'd like to meet this person.

Do you live in Manhattan?

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I don't know OP's backstory, but myself and several friends make six-figure amounts less than 400K, and none of us can even afford even a 1 million dollar apartment. The only way I see this being possible is if you bought a place in the mid-90's for a few hundred thousand and are now selling for 1 million+, or you're older and have been saving for several years. But it sounds like the OP has no current real estate holdings.

[nyc999]

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He's expecting quite a few hedge fund blowups and shrinkage of trading desks and investment banking in general,

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this already happened. however, you're forgetting the funds that shorted the insurance/housing/mortgage companies. plus, you're looking at mostly credit desks, not the equities, fx, commodities desk who are doing brisk business. (although nobody knows how long equities can hold on.)

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To quote the song, it's only just begun. Unless there is a sudden turnaround, there will be quite a few less people working on Wall Street at the end of the year than now.

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Jim Cramer recently wrote an article with an interesting take on the current sub-prime market, and it's potential impact on NYC real estate.

Article

[Phone Booth]

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Do you know anyone who lives in Manhattan, makes 400k or less, and owns a place for $2 mio or more? I'd like to meet this person.

Do you live in Manhattan?

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Yes and yes. Next question?

[Phone Booth]

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I don't know OP's backstory, but myself and several friends make six-figure amounts less than 400K, and none of us can even afford even a 1 million dollar apartment. The only way I see this being possible is if you bought a place in the mid-90's for a few hundred thousand and are now selling for 1 million+, or you're older and have been saving for several years. But it sounds like the OP has no current real estate holdings.

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The real issue is that there's a difference between making 400K one year and having made 400K+ for a number of years and expecting to continue to do so. It's preposterous that someone who's been making 400K+ for several years and expects to do so indefinitely can't afford a 2M place (assuming mortgage rate < 7.5, which may not be a safe assumption now, but was when this discussion started).

[Phone Booth]

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Do you know anyone who lives in Manhattan, makes 400k or less, and owns a place for $2 mio or more? I'd like to meet this person.

Do you live in Manhattan?

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Well since you're now making noise about buying a 2.7M place now, let me ask you this question: have you earned (excluding interest/investment income) more than 540K (2.7/2 * 400K) for each of the past 4 years? Have you averaged that much?

[Tweety]

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Do you know anyone who lives in Manhattan, makes 400k or less, and owns a place for $2 mio or more? I'd like to meet this person.

Do you live in Manhattan?

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Well since you're now making noise about buying a 2.7M place now, let me ask you this question: have you earned (excluding interest/investment income) more than 540K (2.7/2 * 400K) for each of the past 4 years? Have you averaged that much?

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1. No
2. Close, but not quite.

I will earn well over that number this year though. I'm a trader and even if I flat-line p+l wise for the rest of the year, which I almost certainly will not, I'll earn well over that number. 2007 has been a lights-out year for me.

I don't know about future years. I could be out of a job, or I could be making millions.

My parents are well enough off though that if I had some crisis like losing my job or some other financial problem, I'd get support from them if I were desperate.

[Tweety]

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If your income at a wall st firm is 400k, you're looking at a bonus of maybe 280 or so, of which 20% goes to restricted stock. so that's 56k to stock that you can't touch for years, and then you have to pay uncle sam his 45% cut. So you're left with a check for maybe $125k in cash.

When you factor in the cost of going out in the city, weddings, food in general, clothes, car payments/garage/insurance, life insurance, kid costs, you're not going to be able to afford a $2 mil apartment on $400k. I just don't buy that.

I guess if you never left your apartment and ate ramen all year and had no furniture, and had no help at all for your kid and did nothing above and beyond taking the subway to your job and eating grocery store food every day, maybe you could just get by, but that's a miserable existence, especially if you have a stressful job.

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1. Who said anything about Wall St or restricted stock? Either restricted stock has value that you can count on or it doesn't. And bonus =/= real income unless you're talking about minimum expected or guaranteed.

2. What kid costs? Note that I was not talking about your particular situation.

3. Uncle Sam does not take 45%. Besides, even if he did, you'd be looking at after-tax cash of $18,920, according to the #'s you provided.

4. You don't need a car in Manhattan

5. Your company provides for life insurance

6. Basic food and clothing are only marginally more expensive in the city.

7. Ditto for going out. More options =/= more expensive

8. Furniture = fixed cost

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Do you know anyone who lives in Manhattan, makes 400k or less, and owns a place for $2 mio or more? I'd like to meet this person.

Do you live in Manhattan?

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I don't know OP's backstory, but myself and several friends make six-figure amounts less than 400K, and none of us can even afford even a 1 million dollar apartment. The only way I see this being possible is if you bought a place in the mid-90's for a few hundred thousand and are now selling for 1 million+, or you're older and have been saving for several years. But it sounds like the OP has no current real estate holdings.

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Phone booth may be able to crunch out a way for someone earning 400k to be able to afford a $2 mil apartment, but there's no way you can come close to passing a co-op board if that's your income, unless you're sitting on millions in liquid assets, which most 30-somethings making 400k are not.

So you're limited to condos, which cuts out most of the inventory in many nice neighborhoods in Manhattan.

[Tweety]

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When I ran the numbers it was pretty close. Assuming 7.5% rate on the loan, 20% down, 1.8M place, 7k rent, 1.5k maint/month, 45% tax bracket (might be way too high but not sure), 5% earned from TBills, 2% yearly on taxes, etc.

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It's pretty tough to find maintenance that low in Manhattan in the price range I'm looking at. $2,500 to $3,250 is more common.

With the upper east side co-ops, it's generally about $1.50 - $1.75 per square foot (maintenance i'm talking about). We're looking at places that range from 1,600 to 2,200 square feet right now.

Condos are lower maintenance but still generally more than $1,500 for 2 and 3 bedroom places.

[Tweety]

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which, sadly, means we'll have to pay no less than $1.5 million, and probably more like $1.8 to $2.3 mil.


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My god, is that typical of the area or are you just buying a real expensive apartment? It sounds like it's typical.

If thats average, does the average job pay that much more, in the New York area compared to others?

My wife and I just moved from a small 1,500 square foot house about 15 years old With 3 bedrooms, 3 bathrooms and a finished basement into a 1 year old fully detached 4 bedroom model house, about 2,800 squaer feet (including the finished basement) with a fenced yard, hardwood floors throught the entire house, master ensuite, seperate soaker tub & shower, hot tub, granite counters in the kitchen, cathedral ceilings, pillars throught the house tons of upgrades for $292,000 Canadian.

The house we moved out of cost us $151, 500 3 years ago, How do you people afford such absurd morgatge payments? Are you just filthy rich?

Anyways a common mistake people make is to over-extend themselves, they buy to much house and max themselves out.
Go for the smaller apartment

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Yes, the earning potential in New York is very high. I do well by national standards but have good friends who make many multiples of what I make.

Basically, hedge fund guys have unlimited ceilings. I have a good friend who runs a fund that has $1.6 billion under management and is up 40 percent this year. They take a 2.5% management fee and keep 20 percent of profits. Do the math.

[slickpoppa]

"And I'm not talking about some four-hundred thousand dollar a year, working Wall Street stiff, flying first-class, being comfortable, I'm talking about liquid. Rich enough to have your own jet, rich enough not to waste time. Fifty, a hundred-million dollars Buddy, a player...or nothing."