Q & A with Barbara Corcoran

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Q1 - I own a home worth around $400,000 and I owe $199,000.  I have very little cash but great credit. How difficult is it to coordinate selling my present home and buying a new home? What are the risks I should look out for?

A - Find a buyer for your home first and then go out shopping for your new home.  It's hard to sell today, but easy to buy, so wait until your buyer has signed the sale contract and secured their financing before you get all excited.  The one position you don't want to find yourself in is still owing a mortgage on your old house while starting to foot the bill on your new one.

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Q2 - I'm planning to move in with my boyfriend and am considering buying part of the house from him, say 40%, and contributing approximately 40% to the mortgage and joint household expenses once I move in.  The other possibility is setting up tenancy in common, as he has a son from a previous marriage to whom he would like to leave his share of the house if he should pass away.  Does this make sense financially for me?  Would I pay 30% of the current market value of the house?  If I'm filing taxes as a single person, would I be able to deduct my share of the mortgage?  We want to find the answer that's equitable for both of us.  We're also planning to get married next year, but that wouldn't necessarily change our real estate picture.

A - Moving in is easy, but working out the terms of a financial arrangement with your boyfriend is not.  You need the help of a good attorney, and according to Al Fazio of Capuder Fazio Giacoia, LLP, it's not possible to take over half the mortgage because most mortgages have a "due on sale" clause which means the entire mortgage must be paid in full if you transfer even a portion of the property.  You'll also need good tax advice from an accountant on how to structure the deal. My advice is to just move in as a free guest of your boyfriend for the first year in lieu of getting an expensive engagement ring.  Then you can begin to navigate the choppy waters of structuring a permanent deal.

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Q3 - I'm a single mother of a nine-month-old and I make about $50,000 a year. Take away a lot of expenses and it really isn't much. I'm trying to find a home or a condo to buy since so many people are telling me now is the time. Is now the right time?

A - Now IS a good time to buy a property, and if you're credit is good you should be able to find something you really like.  But if you're like most single working moms you're too busy to really shop around and turn up the best properties.  Who do you know who has the time to help you shop and can also play the bad guy by putting in a low bid when you find the place you like?  The buyers who are getting the best deals in today's market are those of us who don't mind insulting a homeowner with a low bid, so you'll need a bad guy on your side.

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Q4 - I live in Brooklyn and am trying to find a furnished one bedroom for less than $1,000 a month. Where should I look?

A - It's not easy. You should look at Canarsie, East New York and Flatbush.  Scour the neighborhoods and look for a rent stabilized deal or a share in a loft. Furnished spaces are always more expensive but you should be able to find a furnished studio for that price in Kensington or Bed-Stuy.  Queens is also a good choice. Studios go for $1,000 to $1,200 in Sunnyside, Kew Gardens, Flushing, Elmhurst and Rego Park. Try KingsQueenApts.com for listings in both Brooklyn and Queens. They offer rentals in high-quality, historic buildings in excellent locations.

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Q5 - I'm currently renting my single-family home on Staten Island to a young couple who wants to buy it.  They suggested a 'rent-to-buy' option, which I'm open to, but I've no idea how that works. 

A - Have your tenant sign a standard New York lease.  You'll find the form at ezlandlordforms.com.  Add a rider to the lease which gives the tenants the option to buy your home at an agreed price within a specific period of time, typically a year or two.  Credit a portion of the monthly rent toward the purchase price, usually 15-20% of the rent you've collected.  If you don't want to write the clause yourself, hire a real estate attorney.  He'll charge about $200 to write it for you.  Don't make the mistake of striking a deal without a written document.  You'll not only lose your tenant in the end, but you'll wind up in a nasty law suit.

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Q6 - I was encouraged to get back into real estate by your presentations on CNBC and the Internet. I used to be a landlord but sold my properties when days were not this bad.  Now I have about $10K to invest. How can I find the best property in the New York area to sell for a profit?

A - Most banks are looking for 20 to 25% down on investment properties, so your $10k cash won't give you enough to invest in the New York area.  And if you're planning to buy a property to flip, keep your money tucked deep in your pocket as you'll need to wait for an appreciating market to pull that one off.

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Q7 - I'm looking to purchase a condo in Long Island, preferably an hour's commute from the North shore, with low taxes. This would be my first home. I make approximately $80K, have low credit card debt, and just finished paying off my student loan.  Do you think it's a good idea for a single person to live in Long Island?  And if Long Island is out of the question, how does Westchester or Northeastern Queens look?

A - A single person can live well in Long Island.  Like other small cities, the downtown areas in Great Neck or Old Saybrook are fast becoming more residential all the time and you can get an older co-op within walking distance to the bars, restaurants and the train station for around $400,000. New Rochelle also offers great values for singles with prices in new loft buildings going as low as $350,000. There's a beach in town and also some strong local bars there. Queens is worth a look too, but stick to Forest Hills and Kew Gardens which has a great shopping stretch and a world-class tennis club.  Pre-war one-bedrooms there sell for as little as $239,000 and it's only 17 minutes from Penn Station via the Long Island Rail Road.

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