In the event of the purchase of a mortgage at a discount, the buyer will recognize capital gain if they acquire title to the property by biddingon the full face value of the mortgage at the foreclosure auction. In such an event the amount of the gain will be the difference between the fair market value of the property less the amount the purchaser paid for the mortgage. The reason for this is that the winning bid at the auction will be deemed to be the fair market value of the property. For example: if an investor purchases a $5 million mortgage for $3 million and then wins the property at the foreclosure auction based upon a $5 million bid, the investor will have realized a taxable gain of $2 million.
How to avoid this pitfall: first, do not go to an auction but try to work out a settlement with the fee owner and any junior lien holders that does not require a foreclosure auction. Second, obtain an appraisal of the property that establishes its fair market value as price paid for the note.
Useful New York City Facts
The next time you're walking down the street and are stuck behind three rotund slow moving tourists from Indiana keep the following facts in mind:
in 2009 there were over 45 million visitors in New York City and that they contributed over $28.2 billion to our economy. As far as I'm concerned, let them continue clogging our streets as long as they continue spending their money here.
Other interesting facts:
- Eating establishments: 18,951
- New restaurants in 2010: 157
- Average cost of a dinner in 2010: $41.81
- NYC is #1 US tourist destination for 1st time since 1990. NYC experienced a drop in tourism last year, but Las Vegas and Orlando were hit harder, allowing NYC to rise to the top.
Historic New York
for those of you who enjoy looking at pictures of historic New York the Museum of the City of New York has launched a portal into their collection of over 50,000 photographs of New York City from such notable photographers as Berenice Abbott, Samuel H. Gottscho, and Jacob A. Riis to name just a few. Check it out here.
My Cousin Vinny
I like to take naps. Every afternoon in my office. For about 20 minutes. I have a couch, small neck pillow, eye pillow and a white noise machine.
What you see here is the dial that allows me to select various modes on the white noise machine. Most of these modes, such as ocean, waterfall, and rain, are pretty standard on most white noise machines. This particular machine is unique, however, in its inclusion of my favorite mode-the "city" mode. This mode broadcasts the soothing sounds of city traffic, the steady hum of car engines, the melodic honking of horns and the three-part harmony of ambulance, fire truck and police car sirens.
I have to believe that whoever designed this white noise machine had to have been a fan of the movie "My Cousin Vinny" where the main character, played by Joe Pesci, had traveled from Brooklyn neighborhood to a quaint Southern town only to find that he could only get a good night sleep in the excruciatingly noisy local penitentiary.
You' re Ugly!
See if you can describe the mistakes in these two pictures of a recently completed luxury condominium on the southeast corner of 87th and Park Avenue. Give up?
First, this has to be one of the ugliest buildings ever built on Park Avenue. It is a glass wrapped middle finger to the entire neighborhood. It has absolutely no relationship to the building adjacent to it or to any of the other buildings along Park Avenue. Perhaps this could be forgiven if the architecture was truly remarkable or innovative but it's not.
It's no wonder that not a single unit in this development has been sold over the past year. Unfortunately for those of us who must live with this eyesore we can't just simply erase this building from the landscape but must live with it for the rest of our lives. Trevor Davis, the developer, should be ashamed of himself.
Second, as you can see in the lower left-hand corner of the window this building qualified for a 421-a tax abatement. So not only is this building ugly, it was constructed with a tax subsidy from the city. It's hard to imagine the necessity of granting a tax abatement for the construction of a building in one of the richest neighborhoods in the city. So, adding insult to injury, not only is this building incredibly ugly, we, as New York City taxpayers, subsidized its construction.
When Old becomes New
These are pictures of the newly constructed Ralph Lauren building on the southwest corner of 72nd St. and Madison Avenue.
Never has classical architecture looked so fresh and new. In a city that has grown accustomed to modern and contemporary architecture designed by such superstars as Frank Gehry, Renzo Piano, Jean Nouvel and others it is refreshing to see a return to classicism that has been so beautifully executed.
Posts
