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ArticleRémy Raisner: Investing In New York’s Rental Market

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At our Women’s Financial $pa® on November 12, 2019, Altfest Executive Vice President Karen Altfest, CFP®, Ph.D., was joined by Rémy Raisner, CFA, Founder and CEO of The Raisner Group, a real estate private equity firm, and Andrew Altfest, CFP®, MBA, President of Altfest Personal Wealth Management and Managing Member of Altfest Real Estate Management. The discussion covered a range of interesting topics, including trends in NYC real estate and beyond; what legislative changes could mean for the real estate market; and Altfest’s real estate investment strategies. Karen subsequently interviewed both presenters.

Karen C. Altfest (KCA): Rémy – Your company buys properties to rent.  How did you decide on that part of the market?

Rémy Raisner, CFA (RR): Generally, rental properties are a very robust product in New York.  The vacancy rate is low and it is hard to build properties and supply the market.  Most areas have land pricing that make it uneconomical to build rental housing – solely condos.  This solidity appealed to me as I have always wanted to form a solid long-term vision, the best way to invest in real estate in my opinion.  Additionally, when neighborhoods improve around the country, they are usually the fastest to do so in NYC, given the urban density.  People gush out of one area into the next ‘it’ one.  Think Tribeca 25 years ago.  So the upside potential is the quickest to realize.  All in all, I think New York offers the best risk/reward equation in the country.

KCA: Are there currently areas of the country to buy in and areas to avoid?

RR: It’s hard to make generalities.  Real estate seems pricey all across.  I have not looked at doing anything outside of New York since I started my company 10 years ago.  Perhaps I will at some point, but I am not there yet.  I would just say that overall, investors have flocked to the Southern Belt markets to follow demographic trends.

KCA: What tells a buyer when to look elsewhere?

RR: For me, this business has always been a niche and local business.  We are concentrated in 3 specific and similar neighborhoods of Brooklyn (Bushwick, Bed Stuy and Prospect Lefferts Gardens).  Pricing has gotten tighter and tighter over the years, but we still find opportunities, place offers on buildings constantly, and are able to purchase.  If a day comes when we no longer are able to do that, perhaps it will be the time to look elsewhere.

KCA: For a buyer of a home for personal use, are there things to know about when to use a real estate agent?

RR: Just make sure to use a local/neighborhood specialist, who knows his area well and has closed sales or at least rentals there.  This is a specialist industry, with a lot of complexity, and surely an inefficient market.  Stack the odds in your favor.

KCA: How can a person acquire sufficient skills to begin buying real estate as an investment?

RR: By visiting a large amount of properties prior to pulling the trigger; nothing replaces this.  Also, by speaking with people and setting up a team of trusted advisors (attorney, mortgage broker/banker, broker, title agent, etc.).  Some books are good to read too – but not all of them.

KCA: What causes a neighborhood to become more desirable?  Does that take years or can it happen more quickly?

RR: Overall, increases in population, rising incomes and proximity to job centers are fundamental to increasing property values.  They are usually linked.  But there are other factors, such as potential for transformation (think areas where brand new neighborhoods can be built from scratch, like what happened in Williamsburg).  And not to forget, the overall local and national economy has to be favorable

KCA: Where do you live?  How did you make that choice?

RR: I live in downtown Manhattan, in Nolita (Soho area).  I have been there for a long time, and really like it, as it is between our offices in Midtown South, and Brooklyn where I go several times per week.  At some point, I guess, I have to live by my company’s philosophy and move to Brooklyn too.  We own nice buildings, and I know the landlord!

 


Past performance may not be indicative of future results. Securities investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful or that investment return goals will be achieved. Real estate investments involve unique risks that should be considered before investing.

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