Money Rehab with Nicole Lapin - "I am in love with an apartment outside of my budget. What should I do?"

Episode Date: September 17, 2023

Originally aired 3.2.2022 Let’s set the scene. You just toured four apartments with a broker. It’s the end of the day and you’re tired. You liked all of the apartments, but weren’t crazy about any of them. Then, your broker says: “Actually, there’s just one last apartment I want to show you.” And then, all of a sudden, you’re there. In your dream apartment. There’s just one tiny detail: it’s out of your budget. Sound familiar? That’s what one of our producers Mike is going through now. Today, Nicole helps him make his next move (literally). Want to start investing, but don't know where to begin? Go to moneyassistant.com and meet Magnifi, your AI money assistant, designed to help you make a plan for your financial goals. Want one-on-one money coaching from Nicole? Book a meeting with her here: intro.co/moneynewsnetwork 

One of the most stressful periods of my life was when I was in credit card debt. I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that

I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime. Feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details.

Hey guys, are you ready for some money rehab? Wall Street has been completely upended by an unlikely player game stop and should i have a 401k because you don't do it no i know you think the whole world revolves around you and your money well it doesn't charge for wasting our time i will take a check you recognize her from anchoring on CNN, CNBC, and Bloomberg. The only financial expert you don't need a dictionary to understand. Nicole Lappin.

Today's listener intervention is with our very own producer, Mike Coscarelli. Mike, welcome to Money Rehab, although you're always here. So like, what's up? Hi, Nicole. Thank you so much. First time caller, longtime listener. I've been looking for an apartment. I live in New York City. I currently live in Brooklyn. I live with a bunch of roommates and my plan was to, now that I'm making enough money, you know, because I mean, we're all rich working on this show. Duh.

I figured it was time to move out, stop living with roommates, get my own place in New York city. That's a, that's a really, that's like a big milestone. And it's pretty hard to be honest, just based off of price and everything like that. This is such an expensive city to live in that you have to be making a good amount of money to really take that chance. Unless you do the smart thing, which is what our other producer morgan did uh and live with uh like a partner you know but this is a really good next step to getting a partner yeah the upgrade of having your own space in your own place

because yeah i mean for me i don't want to make it you know i don't want to say anything For me, I don't want to make it... I don't want to say anything... Everybody's choices are their own choices. But for me, I feel a little bit like a bum living with three other guys still. That's how I feel personally. Now, that doesn't mean that everybody feels that way. And I understand.

I don't want... I'm not coming for anybody. That's just how I feel. You're not a bum for doing that. But from a lady perspective, and I'm going home with a dude, having some other roommates is less appealing. Yeah.

And I do think, frankly, if you are in a situation where you find somebody that you begin to like and hang out with, it is hard to be taken seriously if the reality of your situation is that you still live with a bunch of guys. And I think of what I'm in my 30s. I think a woman in her 30s when she's dating somebody wants to see that a guy kind of has a plan to get the hell out of a situation like that. And it's just I don't want to live amongst... One of my roommates spends every morning an hour and a half in the shower. That seems unnecessary. I don't like living with that. You know, I don't like waking up and wondering if I'm going to be able to brush my teeth

before this guy gets into the bathroom, because otherwise I'm going to have to wait until noon to do it. I really wanted to stay in Brooklyn. I really love Brooklyn. I have a car. It's not really easy to have a car in Manhattan just because of the parking situation and everything. And Queens is Queens. I mean, you know, there's a stigma with living in Queens.

It's just not as cool as Brooklyn. And I'm a cool guy. So that's where I want to be. And I thought at the price point that I have entered into that I would be able to really have my pick of a pretty nice apartment almost anywhere in Brooklyn, just because I figured that I've never paid even remotely close to this amount of rent that I'm willing to pay. And I was just wrong, completely wrong. I couldn't be farther from the truth.

Completely wrong. I couldn't be farther from the truth. Currently, it's a market for people that are renting and not for renters. There's not a lot to rent. Yeah. So what have you been spending on rent? $915 or something on rent. Okay.

Morgan just made a face. But that's because I live with three other fucking people. Morgan did not make a face. Morgan made a face like, wow, 900 something dollars. So now you have increased this budget threefold or more? Yes, I'd say, yeah, a little bit more than threefold. Baller. Yeah, our show is very successful, Nicole.

I mean, yes, we're nominated for an Amby, god it that's right and we're gonna win it yeah we are yeah and you've gone through your own money rehab everybody is winning here so you're looking for a pad a sweet solo pad in the city with what 3 500 as a maximum budget as a max. When I started the search, I thought that 3,500 was going to get me a beautiful... I was like, I'll go to 3,500 if I see a 1,200 square foot apartment somewhere in downtown Brooklyn. I really thought that that's what that was going to get me because I just figured that much fucking money, that's what you'd get. I just figured that much fucking money, that's what you'd get. But now I'm learning that $3,500 is apparently not even really that much,

which sounds insane to me. I told my mom that I was looking at apartments for that price. And she said it was like $1,000 more than her mortgage. Granted, she lives in New Jersey, which is still expensive, but it's more smelly and not as fun. So that's sort of the payoff that you can live a little better in a place where that's not New York City. But when you put it in that perspective, it does seem kind of crazy that you're going to spend that much money for something in a neighborhood that I've... These neighborhoods that I've been seeing for less than a thousand square feet. It seems a little nuts. It does seem nuts. So you went out to look for apartments and you then realized that

$3,500 would get you what? Depending on where in the city, you know, it could, it could get you a two-bedroom but it's a it's a two-bedroom that's really a one-bedroom with this little wall that they just put up so it's the same amount of space as just kind of like a normal sized one-bedroom i like my neighborhood right now because it is there is a neighborhood feel i kind of have my normal coffee shops i have my normal restaurants i there i i know people in the neighborhood. Okay. So you found a place that you can walk to get coffee from. So you said you drafted an email that you were about to send, and then you pasted it in the text. And then I looked

at it and it felt eager. And so it had a lot of exclamation points wait did you write that or did morgan i wrote it but i think because i spent so much time with morgan and read so much of her writing that that i've i've i've caught exclamation point fever yeah that's that's true i thought it could have been morgan because you don't even put exclamation points when you're chatting girls up so yeah now now like okay so you put you put exclamation points you're very exclamation point happy it's like hey i love this place and then i took out the exclamation points i scrubbed them and i was a little more aloof it wasn't like um this is the only place um i tried to make it say like i'm looking at a lot of places there's a lot of inventory on there this is not special okay so read me the whole thing you have

it in front of you so we're emailing a woman named Katrina. Hi, Katrina. Thank you for setting up the tour. I'm looking at a few other similar units today in the area, but I'm interested in seeing what more we can do to make apartment. I'll keep that blank. The winner. I am ready to move quickly. I have noticed that there is quite a lot of inventory at the building and that the unit previously rented for approximately $3,400,

which was true. We did research on that. If we could come in there with the application fee waived and the building amenities included, I could be ready to move forward immediately. Considering the fact that the Avalon is billed as a building with views of the Empire State Building, this is an equitable offer for a third floor unit that does not offer what is marketed. Looking forward to continuing the conversation to make this a win-win and a smooth process for everyone. I am available between time and time today to discuss further. Regards, Mike. Right. So I wanted you to research how many units in that building were available because then you're getting into their psychology of

them needing to get to their quotas or whatever they have as a bigger building and a bigger company or management system. And also that you should not come across as thirsty and put out a negotiating offer because a negotiation is a give-take, give-take dance. And so if you say that you want your application fee wage, which was like, what, 20 bucks or something like that, I looked at the website and the amenities, I mean, that was a throwaway thing. They're going to feel good if they can cross something out, if they can be like, okay, well, definitely no on this. We'll see what we can do on this. they're going to feel good if they can cross something out if they can be like okay well definitely no on this we'll see what we can do on this so when you go in with something that you don't really want uh and you hope that they're going to cross that out that actually is what

happened they're like we can't move on this which is what i was expecting because they're a corporate-y type operation you're not dealing with like some dude who's renting out his apartment and so they said we can't do anything on that because they're rules follower type people. But they didn't respond to the 3400, which was where it rented before. So you didn't just pull that number out of your ass. It was what you researched the apartment had already gone for. That's right and then i told you not to put in the um longer lease negotiating chip because you could use that later on so the latest is that you called which i told you to do this weekend but you have shit to do dates to go on and things like this yes so it wasn't in the top of the priority list fine um but you

then ultimately called and you what asked for a manager yes and they just said put an application in and um but that price is the price did you put the application no because it's not i can't afford these apartments now and i'm also just kind of soured by this experience. And it's making me not as excited. Wait, you can't afford the you can't afford the one that the third floor one. The third floor one was the one I liked. No. Right. So what's the problem?

Yeah, it was originally it was over my budget originally. That's why I was trying to negotiate it down into my budget because I was willing to hit the top of my budget for that because it had it was like 700 and something square feet is pretty big. So but you need to put the application in, dude, because they're not going to negotiate with you before they know you're qualified. Is that what it comes down to? I have to put the application in and see. Yeah, because they have to run a credit check and stuff like that. So they can't negotiate before they know if you're qualified to even move in. So you should have put the application in.

I didn't know I was supposed to do that. So do that like ASAP. What do you mean? I thought that you like I thought I didn't want to put the application in for that price because then I thought that that would be the price. No, they need to verify that you can afford it first. If I'm a landlord, I'm not going to negotiate

with any schmo off the street. I want to make sure that you have money. Yeah, that does seem to make sense. Get your fucking application in, Mike. Okay. Hold on to your wallets, boys and girls. Money rehab will be right back. One of the most stressful periods of my life was when I was in credit card debt.

I got to a point where I just knew that I had to get it under control for my financial future and also for my mental health. We've all hit a point where we've realized it was time to make some serious money moves. So take control of your finances by using a Chime checking account with features like no maintenance fees, fee-free overdraft up to $200, or getting paid up to two days early with direct deposit. Learn more at Chime.com slash MNN. When you check out Chime, you'll see that you can overdraft up to $200 with no fees. If you're an OG listener, you know about my infamous $35 overdraft fee that I got from buying a $7 latte and how I am still very fired up about it. If I had Chime back then, that wouldn't even be a story. Make your fall finances a little greener by working toward

your financial goals with Chime. Open your account in just two minutes at Chime.com slash MNN. That's Chime.com slash MNN. Chime feels like progress. Banking services and debit card provided by the Bancorp Bank N.A. or Stride Bank N.A. Members FDIC. SpotMe eligibility requirements and overdraft limits apply. Boosts are available to eligible Chime members enrolled in SpotMe and are subject to monthly limits. Terms and conditions apply. Go to Chime.com slash disclosures for details. Now for some more money rehab. Two weeks later. So did you apply? I did apply. And? I got approved. Yay! But part of the issue was that they have this sliding price scale, which I've talked to a handful of people now.

Nobody's ever seen something like this before. But when I saw the apartment that I wanted, it was listed at $3,600 per month, which was a little above my price range. That's the whole conversation that we've been having and the whole reason why it felt necessary to try to negotiate a little bit of that off the price. And after I had selected that I wanted a March 1st move-in date, after having seen the apartment a week and a half prior

to putting the application in, the price went up $200 a month for the apartment. So it went from 3,600 to 3,800 in less than two weeks. And that's why they, that's just the way their scale is. For whatever reason, their system is in this building. I won't name names in New York City, but a building in Long Island City in Queens in New York has a scale that it's just every single day, the price increases a little bit, whether it's $35 or whatever. So by the time it got to the application being approved, it got raised to $3,800, which obviously I could not afford.

So wait, wait, wait. The scale, is it also depending on what day you choose to move in? It is, but it's obviously more expensive. Basically, if you make the choice to move in tomorrow, you get it for the list price. Did you ask them what the scoop on that is? Yep. They couldn't give me an answer. I tried to ask them because I asked the woman on the phone. I called them. I did everything. I emailed them. I called them. I finally got somebody on the phone once the application was approved and was in. So once I got approved for it, I basically said, guys, so this price obviously can't be the price,

right? Because I saw it at 36 and now it's at 38. And she's like, yeah, no, no, that's the price. Because you wanted a move-in date of March 1st. And I was like, so what? If I don't take this apartment and it just stays on the market, this apartment is going to be $4,200 for this apartment. You're going to raise it almost $1,000 in a month. That doesn't seem to make any sense. And the woman was just like, I don't know. I'm just new to this building. I don't really know. She gave me some bullshit stutter answer. I really did think this was a tactic for them to open a conversation. I really thought that when I hung up the phone,

she was just going to go, Alright, so this guy's approved. He can be in the building. Can we talk about... And I thought I was going to get a call from somebody in the leasing office that's like, Hey, Mike, we just talked to so-and-so. We want you in the building. You're approved already. What can we do to make this work? And they just didn't. So I just pulled out of it. So I just started looking for more apartments. And now I have an application in another building next to it. I found an apartment that I liked. This broker showed me around. It was 37. I told him that I had another apartment that I liked just as much, but I liked that apartment. And I was willing to put an application in, but I wasn't willing to spend more than $3,600.

And also, they have a couple of their amenities in this building because it's one of those high-rise buildings. There's a couple of amenities that are still under construction. They're redoing the pool. They're redoing like their locker rooms or whatever. So I also said that I needed to have the amenities waived, which is another $50 a month. And then what happened? He said the building probably wasn't going to do $3,600 for the apartment. So what he said was he was going to give me a $1,200 rebate.

He was basically going to write me a check for $1,200 to take the apartment at $3,700 so it would even out. Where's your head now? You want this other apartment for $3,600, which was your budget. And then ultimately, somehow you're getting it at $3,600. So is there a problem now? um so is there a problem now i i make enough money to cover um the rent or what 40 times the rent whatever this stupid metric is i can cover it between this like working on this show and the other iheart shows that i work on and all these you know these other projects but um i don't have a lot of tax information that backs that up because a lot of this work that I started getting didn't start until probably halfway through last year.

I've given them pay stubs and copies of invoices and stuff like that. It's just a major hoop to jump through to get freelance income approved, it seems like. They want me to get a CPA letter. I don't even have a CPA. Why don't you have a CPA? I mean, I have a guy that has done my taxes. I have a guy in Jersey. You're Mike Coscarelli. You're a guy for everything. So a friend of mine who... One of my first freelance gigs was in 2018, but I didn't freelance for long. I probably freelanced for a couple of months. And then

the company that I was working with made me full time. So there was a couple of months of income that I had to figure out what I owed in taxes. He helped me do that. And he has done my taxes for me, I think the last three years. But they've been... For the most part, I've just worked at a company and they send me a tax return. And then it's not... They're not difficult. This is the first step for me where as a producer, I've gone out on my own, as opposed to had a salaried job. And there's things that I have planned for the next year that are obviously going to require a real accountant or CPA

that can help me get set up, setting up an LLC, setting up. That's on my slab. I just didn't think that I was going to need all that stuff to get an apartment. This has been the moral of a lot of our interventions. Not that this is a classic intervention of sorts, but usually it's not the thing that we start talking about. It's something else that's the issue. And I think the issue has come to the forefront that you might not have been expecting, but is the real issue we should

be talking about and addressing. And this rent debutante ball that you've done around Long Island City has catalyzed it, has pushed it to the forefront. Importantly so, because, you know, thankfully, it's just dealing with the rents with these, you know, whatever corporate-y buildings. That is not as much of an issue as, let's say, an audit or some other, you know, like I just got a super lovely bill from the New York Labor Department for some fucking form or something or other. It's really annoying to set up all the things that you need for various entities and keep up with that. If you're going to do that this year, like, let's do that right now. And yes, get a CPA. And yes, either get a LLC or an S-corp and get that situated so that it doesn't cause you greater issues in the future. You know, worst case scenario here, if we fast forward the videotape,

is that you stay with your roomies, which is, granted, high class problems. You still have a roof over your head, all the things. You know, fast forward a videotape, if you get into some other financial shit, less funsies. So I think that if you are comfortable with this building um and you can prepay that's a way that i see getting around it and by the way if you didn't have this wake-up call then you would probably have procrastinated more so i'm glad you had this wake-up call, then you would probably have procrastinated more. So I'm glad you had this wake-up call. And so I think that all of this is ultimately going to put a little pep in your step to get it together and get it all. For today's tip, you can take straight to the bank. Mike, what did you learn today?

What did I learn today? I learned that waiting to the very last minute to find a CPA to write you a note to get an apartment is a really bad idea. I got to get my shit together, man. Money Rehab is a production of iHeartRadio. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Mike Coscarelli. Executive producers are Nikki Etor and Will Pearson. Our mascots are Penny and Mimsy.

Huge thanks to OG Money Rehab team, Michelle Lanz for her development work, Catherine Law for her production and writing magic, and Brandon Dickert for his editing, engineering, and sound design. And as always, thanks to you for finally investing in yourself so that you can get it together and get it all.