“$2,000 a Square Foot boggles My Mind”

There are a couple of markets I do mortgages, New York City area or Boston and a couple of others where sales prices for certain units can be around $2,000 per square foot. When I see a purchase agreement for a 1,000 square feet of living space selling for around $2,000,000 dollars, my mind starts doing strange things and that is what I was looking at.

I really get tested when someone tells me they are looking at the unit as an investment. As I listened to the thought process, everything that I think I know as an investor, gets thrown out the window. I ask the following questions:

1)Have you done this before? Purchase units in the city before in this price range? Answer, yes many times, but right now I am sitting with a lot of cash and want to put it to work and want to leverage my dollars.

2)How long do you usually hold a unit like this? Answer, anywhere from 12 to 24 months.

3) Do you do any renovations? Answer, sometimes. I have spent a couple hundred thousand, if I think I can get a 100% return on my investment.

It didn’t take me long to know, this guy was the real deal especially after running credit and seeing his assets. I was happy to send him a preapproval.

A wonderful referral from his financial planner, who I did a mortgage for last year.