If you made $15M (gross) from a real-estate sale in NYC using both an attorney and broker, what would you net?

Question

And, figuring that you wanted to live off the money from the sale for the rest of your life, have money to support your family, and leave bunches of it for your family after you pass, how would you invest it? (Serious and legal answers only, please.)

Thanks!

When I say "live off the money," I'm expecting appx. $200K/yr net income w/o messing with the principal too much.

As you can tell from the question, I'm out of my league here...but I'll try to give some additional information that might answer "Boston's" questions.

The building (residential) has been in my family for at least 80 years and, therefore, coming up with an actual purchase price for it is very difficult (but let's assume that it was $0).

Improvements have been made over time to keep it in code but no major modifications have been made (no new elevators, etc).

I have no idea what a "cost basis" is...

I have no idea what the depreciation would be (but it is a residential rental property with 20 units)...

Regarding the investment income, I'm looking at an 80/20 split between low-risk/high-risk allowing for an "interest-based" income of $200k/yr.

"Bunches" would be as much of the principal as possible (a.k.a. living off the interest).

Does this make my question less "defective?"

Thanks for the answers!

Answer 1

Figure 6% of the sale price to the brokers (not 6% of the gross profit but 6% of the sales price) which you can probably negotiate down since the sales price is clearly very high. Just a few % of the sales price for other fees - mostly taxes. I'll bet you can get out of the deal paying maybe 6-8% of the sales price (but I have no idea what NYC taxes run so I'm not really sure how that would affect the transaction).

I'd invest the money is a diversified group of well performing mutual funds. That should easily set you up for life assuming you live within your means (but alas your children will probably blow whatever is left - the downside of being rich I guess).

Answer 2

No way to say what the net would be from the information given. If the cost was $14,999,999, you'd net $1 before paying any commissions and after a 6% (residential) or 10% (commercial) commission, you'd be well in the hole. At that rate, forget any income or "bunches" to leave for the family.

That is both a serious AND legal answer. Your question is what's defective. Need the following information:

1. Cost basis
2. Cost of any improvements
3. Amount of depreciation allowed or allowable (#5 will help with this possibly)
4. How long owned.
5. Type of property.

6. As to the investment income, your tolerance for risk and how much is "bunches" to leave for the family.

Answer 3

A dealer mostly makes 25% to 50% of the fee of both the directory agent, the marketing agent or each if it remains within the equal workplace. It is quite often an contract among the agent and dealer. The agent will comply with promote your house for six% of the acquisition rate (this varies from field to field and the rate of the house, properties over $one million million probably have a rate breakdown) and out of that they pay three% tp the marketing agent and break up the the rest with the dealer they paintings for. Worst case situation is that they've one million.five% afterwards and out of that they have got to pay promoting fees, taxes and themselves. That is mostly why so much sellers don't wish to move under 6%, they aren't left with an excessive amount of on the finish. Some sellers or "reduction agents" will cost you three-four%, watch out for this. Most of the time that is what's referred to as an "in-residence" or "pocket directory", that means that they are going to do minor promoting or confined bureaucracy, no longer directory the estate at the neighborhood MLS, and hoping to promote it to one in all their consumers that's already watching. That means they may be able to accumulate the complete fee themselves. The challenge with that is confined publicity to your house and normally hidden expenditures that become costing you greater than what you might have spent with a conventional association. Your exceptional wager is to selected a respectable corporation on your field and write off what you'll be able to from the fee fee. Check along with your CPA and negotiate with the agent, that's what they recognise will occur anyhow.