Front Page Forum: To Close or Not to Close?
I’ve just had a sobering pre-purchase house inspection and am still in shock. The house is a 4 story 3-family on a beautiful block in Stuyvesant Heights. My second offer of the asking price of $700,000 was accepted. The house will be delivered vacant. The owner has lived in the house for almost sixty years….
I’ve just had a sobering pre-purchase house inspection and am still in shock. The house is a 4 story 3-family on a beautiful block in Stuyvesant Heights. My second offer of the asking price of $700,000 was accepted. The house will be delivered vacant. The owner has lived in the house for almost sixty years. One tenant has lived in his apartment for 40 years. There are some lovely hidden details (tin ceiling, fireplaces, pocket doors, herringbone parquet floors), however they are painted over, or had wood paneling, carpeting, dropped ceilings, etc. put up over them. I had hoped I could do a renovation of $100,000 for the two rental units and then at some point, start to work on my duplex, for another $50,000, maybe.
The inspection shows that the house basically needs everything, and that if I’m going to renovate the tenants’ units, the only sensible thing is to do the whole house. The inspector (who I think is great) feels the price for the work is minimally $300,000, and that’s not with fancy finishes. All major systems need redoing, plus a new roof, re-framing of a few beams and staircases, facade work, cement work (cracked sidewalk), fire escape work, new windows – you name it.
About the only things that can be preserved/restored are most of the floors, and some of the ceilings, the fireplaces (non-working at the
moment) and one set of badly hung, painted pocket doors. If I had the money, I might do it. But I just don’t have the extra $200,000 this project will take, not to mention 6 months to a year of paying the mortgage while I continue to rent in Manhattan.
Yet somehow, I’m wondering if there’s any way not to walk away from this house. Should I offer the owner something outrageous like 550K, or walk? I love the block!
With my budget, am I likely to find anything that’s decent that’s in better shape in Bed-Stuy/Crown Heights? Should I start looking elsewhere? At foreclosures on PropertyShark?
Any and all comments greatly appreciated!
You do not need a fire escape if C of O is for a 2-family. For 3-family and above, you need either a fire escape or a sprinkler system.
what is the c of o? If it’s for a two family, you may not need an exterior fire escape. does anybody know the law on this? i have a hideous fire escape on my brownstone i’d love to get rid of.
if you can handle it then move in and fix one of the rentals first– i assume the place is at least live-able right now. then get a renter in and continue fixing with the next rental appt. if you can’t handle that then don’t buy the house. also get a good lawyer and work the price down on some of the inspectors findings.
I am not surprised to hear something like this. I have been looking and also did not quite realize the cost of fixing up some of these places which need gutting. In the process of looking, going through some inspections, etc. I found out that a 4 floor place for example can cost 300-400K to fix at the end of the day for a nice renovation. Many places in Bed Stuy are in very bad shape because unfortunately people there could not afford to keep up the properties (or course, this is true elsewhere too, but more so in places like Bed Stuy). For example, the roof leaked and they could not afford to fix it and then this damaged the ceilings and beams in the upper floors and they are rotting and plaster is pealing, the foundation never reinforced and floors sagging, basements flooded, The electricity, boilers not upgraded for 60 years … the works.
Point being, once you look closer at this, your 700 or 800K brownstone (which would have been 300 to 500K one year earlier, but that is another story) is not really such a bargain. Once repairs are done, your are looking at spending 1M dollars or more to live in Bed Stuy. Not that Bed Stuy isn’t a nice place. But, it is rough on the edges and inherently it is farther out than places like Clinton Hill or Fort Greene (although as someone will point out, Bed Stuy has the A train as opposed to only the C in some places, etc. etc. etc.) Anyway, some people may be in for rude awakenings if they somehow do not find out the real costs prior to closing and think they need to spend much less than they do to fix their houses. And, to add insult to injury, if the housing market were to go down, say as a result of a rising interest rate, a place like Bed Stuy will be hit harder than, for example, Park Slope. That would make it even harder for those who did not go in with realistic expectations to get out of the mess they might be in (or might not, some people may have enough cash).
May I ask who the inspector was?
I echo the suggestion of doing minimal repairs, then moving in and going from floor to floor to renovate. We’ve been doing that for the last 18 months in Stuy Heights. While it’s been difficult living on the top floor with working going on downstairs, we were able to buy on a block that has subsequently seen house prices almost double since late ‘03. Had we passed, we would still be renting a little one-bedroom instead of living in a 4-story brownstone (with the bottom two floors-including the ground floor rental- almost finished) on a great block.
I forgot to mention that this guy moved and rent in brooklyn
I met guy who sold his apartment in upper west side in late 90s and he decide to rent instead of buying because it was cheaper. Guess what now he is completely price out. He was so sad, frustrated and angry. If you have a chance you should buy as long as numbers are working of course.
or, perhaps you could come away from this with the same conclusion that many others have reached: that the nyc housing market is too overheated to buy in. we looked throughout brownstone bklyn, but after running the numbers for every single place, it only made sense to rent until prices came down.