Affluent Savvy
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What are the three D's of real estate?

In a down market, some real estate agents say the only real motivators for people to sell or seek property may be the three D's: death, divorce and debt.

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Michael Bolla of Luxury Lofts and Homes (far right), hosted a gathering at 436 West 20th Street (building photos credit: Patrou Phelps) for female divorcees, at which matchmaker Janis Spindel (third from right) and Isabel Gilles, a New York Times best-selling author (second from right), spoke.

Divorced female, seeking apartment, immediately, any size, any neighborhood, any rent.

In a down market, some real estate agents say the only real motivators for people to sell or seek property may be the three D’s: death, divorce and debt. But they are tricky markets to reach. To home in on those potential clients, some real estate agents accentuate the positive, selling their services as matchmakers. Others make it clear on their Web sites that, though they’re not lawyers, they’re familiar with the legal twists and turns of divorce. Michael Bolla, director of sales for Upper East Side-based boutique brokerage firm Luxury Lofts and Homes, hosted a gathering Tuesday at his upscale Federal-style historic rental building at 436 West 20th Street, strictly for female divorcees, women experiencing divorce or women contemplating divorce. About 70 to 80 women, paying $40 a head, showed up. Bolla said he wasn’t trying to rent apartments — though there are two available at 436 West 20th Street including the one in which the event was held — but had collaborated with Divalysscious Moms at divamoms.com to gather those whose lives had been touched by divorce and emphasize the positive. Speaking at the forum on the garden floor at 436 West 20th Street was Isabel Gilles, a New York Times best-selling author who wrote “Happens Every Day: An All-To-True Story,” whose book focuses on how women can maintain a positive attitude throughout divorce, Bolla said. (Note: correction appended.) “It was a series of speakers here to illustrate ways of preventing women from getting angry about this change in their lives,” Bolla said, “and how to manifest a positive attitude throughout the process.” Besides Gilles, matrimonial attorney Peter Morris also spoke about the divorce process, and Janis Spindel, who bills herself as “America’s upscale matchmaker,” was on hand to talk about love and dating after divorce. Jeffrey Morrison spoke about the cumulative toll that divorce takes on the body and how to cope mentally and physically, while Lola Schnabel, a painter who is the daughter of artist and real estate developer Julian Schnabel, discussed the importance of creativity during the process of healing from divorce. The historic building at 436 West 20th Street, dubbed the Chelsea Mansion, is a 10,000-square-foot property built in the early 1800s, renovated and converted to five rental apartments by Bolla along with his business partner Michael Daniel. Celebrities like rocker Courtney Love and Olivier Sarkozy, the half-brother of French President Nicolas Sarkozy, currently call the building home. The apartments, which rent for $15,000 a month for the first four floors to $37,500 a month for the duplex penthouse, are both available for the short and long-term.

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What is the 70 rule in real estate investing?

The 70% rule can help flippers when they're scouring real estate listings for potential investment opportunities. Basically, the rule says real estate investors should pay no more than 70% of a property's after-repair value (ARV) minus the cost of the repairs necessary to renovate the home.

The standard process for flipping a house involves buying a home or distressed property at a low purchase price, fixing it up and selling it for a higher amount. The goal for house flippers is to buy low and then sell high in order to boost their profit. The 70% rule can help flippers when they’re scouring real estate listings for potential investment opportunities. Basically, the rule says real estate investors should pay no more than 70% of a property’s after-repair value (ARV) minus the cost of the repairs necessary to renovate the home. The ARV of a property is the amount a home could sell for after flippers renovate it. When buying a home to flip, investors need to estimate how much they believe the property could sell for after it’s been renovated. They can then multiply that amount by 70% and subtract it from the estimated cost of renovating the property. The resulting figure is the highest price that flippers should consider paying for that property. The 70% rule is just a general rule of thumb, however. Before buying any home, you’ll want to study market conditions, work with real estate professionals to get a more accurate resale estimate, and meet with contractors to determine how much repairs will cost and which renovations are needed. If you’re getting a mortgage to finance the investment property, you’ll also want to consider the loan amount and term when evaluating your overall expenses and the ARV of the property. Make sure to apply for mortgage approval so you can understand how much property you can afford before you go house hunting. Securing mortgage approval can also help you prepare to pay back the mortgage once the property is ready for resale, because you’ll know how much you owe your lender.

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