Monday, December 7, 2015

Prime Corner 8-Family in Bed-Stuy Closed Last Week: 1 MacDonough Street

One of Bed-Stuy's most prime corner 8-Family buildings closed last week at 1 MacDonough Street in an off-market transaction for $3.5M.  This hefty 27' x 95' building weighs in at over 10,000 square feet no matter how you slice it, and with over a dozen windows per floor, it is stacked with 3 and 4 bedroom apartments.  The group "1 MacDonough Street Partners LLC" purchased the property and plans to develop it into 8 condo units.

We were bullish on the place since the day we heard about it last year, when Platinum Members had an accepted offer at $2.9M and the owners were pushing for more.  It later appeared on for higher just about a year ago.  But you won't find this deal on StreetEasy, no matter what their corporate counsel might say.

No stranger to making off-market moves in Bed-Stuy, our main man Paul Gooden is the agent who put the deal together at 1 MacDonough.  And the buyer group, who also picked up 479 Clinton Avenue last week for $5M...

... they demonstrated a unique understanding of a landmarked block's potential in Bed-Stuy.

The interior of 1 MacDonough obviously will undergo rehab, but we were curious to get a first peek at the bones...

Early last year we were closing 8-Family's (though about half the size) for over $3M in Prospect Heights, but obviously the market's changed since then, particularly in areas like Bed-Stuy.  Getting what will likely be $8M-$10M worth of condos for $3.5M ain't bad.  Especially as $300 per buildable square foot pushes its way east, $350/sqft for good bones is even better.  Can't go wrong when you "get it for the low".  The price is also impressive considering the Aussies just resold nearby 75 MacDonough Street for $4.175M.  Although that's a more grand property, its value isn't as poised to be unleashed as 1 MacDonough's.  Or compare to another corner big-boy 8-Family right next to it at 231 Hancock Street, reportedly in contract off-market for $3.5M cash as well with the same broker, and seen only on for over a year.  Hancock, however, comes with plenty of rent regulation in place, so MacDonough vacant for the same price looks even more attractive.

While tons of ground up construction goes up all over Brooklyn - the quality, style, and aesthetic of which many groan about - these early 1900's gems were built better, withstood over 100 years of mixed-bag maintaining, and are here to stay.  They will command a different clientele than the boxy glass condo.  Also, you can't build box glass condos on these landmarket blocks if you wanted to.  Plus quality condo product on the prime brownstone blocks will command that much more of a premium since not everyone can afford prices over $1.5M for a fixer-upper townhouse, or $2M+ for a finished one (or worse).  So don't be surprised when the people who can afford the ~$1M condo show up on the brownstone blocks too, even in Bed-Stuy.  Not everyone grasps the nuances of the "you build it, they will come" potential of Brooklyn like the buyers of 1 MacDonough, and we're looking forward to seeing these condos when they "bring 'em out, bring 'em out".

Pro's: corner, size, windows & BR's for days, delivered vacant, not outrageously bid up on market, buy & hold or condo potential right out the gates

Con's:  price bubbled up, top line number may sound high if you dunno what you're looking at, not on everyone's radar, very difficult deal to navigate, will take lots of money to maximize

Ideally: one of the most desirable canvases to renovate and restore in line with today's market

Friday, November 20, 2015

Crown Heights Limestone Hits 1137 Lincoln Place

New to it's a limestone in Crown Heights that we were itching to see when we first heard about it heading to market a few weeks ago.  1137 Lincoln Place is a single-family asking $1.2M between Albany & Troy that reminds us a bit of the Platinum Member pick ups at 1190 Union Street and 1196 Union Street.  Like those houses, 1137 Lincoln is a legal 1-Family, easily used a 2 with the finished basement and above-grade windows on the floor, with original details, coffered ceiling in the dining room, and kitchens and baths in need up upgrading.  The interior staircase gives it more of a home feel than a multi-family...

We were excited when we first saw carpet on the floors, 'cause we figured that's protect the orginal parquet flooring as it tends to, and it did...

This is that straightforward fixer-upper canvas.  A little paint and lighting fixtures alone would go a long way.  We'd update the working kitchen and baths affordable to help make the place shine even further...

By the time this place looks the way you want it to look, it won't cost what you want it to cost.  While everyone is gunning for no-brainer avenues like Franklin these days, Nostrand is clearly on its way to being the new Franklin, and you may be surprised to see what's cropping up along Kingston Avenue, including the kosher "artisanal" burger spot:

Which plays well with established places like Basil across the street on Kingston...

In case you thought Crown Heights begins and ends on Franklin Avenue.  We see a similar buyer taking down Lincoln Place for similar reasons as the Union Street limestones.  When you get two stories, easy to rent finished basement, and a backyard for less than condos trade for off of Washington Avenue, the up & coming young families expanding out of their condos will take that value proposition.  4 houses like this sold for over $1.3M last year on Lincoln Place off of Nostrand.  Asking $1.2M makes sense to us in this market, even heading into the holiday season.

Pro's:  curb appeal, barrel front, totally vacant/live-able/mortgeable, work left to be done is the fun stuff, great condo alternative, just 2 trains stops from everyone's favorite hub of Crown Heights

Con's:  does need work, not a legal 2-Family, will cost a lot more if current owner develops it, further east than the masses are ready to go as of yet

Ideally:  worth a look at the upcoming open house, or sneak a peek with us sooner than that!

Monday, October 19, 2015

Park Slope Shell Game: 373 Bergen Street

There were doubts, but the $2M shell game is alive & well in Park Slope.  Even on the gnarliest of little houses.  373 Bergen Street came out for $1.75M and lasted 2 days on StreetEasy before the response was so tremendous the listing wasn't necessary anymore.  Off-market finders shopped it to us when the high offer had already bubbled up to $2M, which didn't seem too far-fetched for Platinum Members to still take a peek.  And there wasn't much to see...

Basically the remnants of a shoddy reno that stalled-out midstream.  So it was no wonder the Elliman listing didn't even both with interior photos.  First popped on our radar back in 2012 when they caught a stop work order and Dixon was curious about it.  This summer's asking price is a healthy boost from the $655K the deed traded at this February, but those trades are rarely as simple as they appear.  Stumpy and only 32' deep, it seemed like the worst of breed at the time in 2012, but with the way prices have been recently and so little else left to choose from, this suddenly becomes a prime shell in the Park Slope shell game for the right developer - even at the $2M.

Or at least one of the only things left at this kind of entry point.  Earlier this year a similarly uninspiring house across the street with the Fred Flinstone front (which ain't hard to change) came out at 382 Bergen Street...

Without much inside to get too excited about either...

It lasted a month on the market with a local broker asking $2.65M before going in contract in July.

And even the SRO shells of yesteryear command $2M these days, like 268 Dean Street which closed in June for $1.95M.

And Platinum Members were happy to pick up another one of these around the corner on Bergen for $2M cash and are already anticipating a sell-out over $5M.  If these gains are realized, it makes the $2M shell make sense, as astonishing as this is, even for frame buildings architects dubbed "better as a tear-down," and still reiterated interest at the $1.7M-$1.8M levels.

This week we'll take a look at another Platinum pick-up from last year at $1.85M that's got interest in closer to $3M with barely any renovation.  Now we're eyeing some of our favorite next-best shells and better-than-shells - on and off market - in Boerum Hill, Fort Greene, and Prospect Heights asking $1.75M-$2.75M.

Pro's:  north Slope location, vacant and ready for a project, pimped out condo or 1-2 Family potential, in line with shell pricing these days, a hunk if built to full

Con's:  small frame house, needs a total gut, gone already above asking price, took cash purchase and lots of renovation budget, not the best block although well-situated, dubbed a tear-down by architects

Ideally:  a lot for a shell, but a sky's-the-limit location for high-end sell-outs.  Shows where that spec market is at.

Wednesday, October 14, 2015

Tantilizing Glimpse into Crown Heights Foreclosure Gem: 1370 Dean Street

It's not everyday that you get a sneak peek at an 1880's castle in Crown Heights the weekend before its foreclosure auction.  But that's where took Platinum Members two weeks ago at 1370 Dean Street.  This single family gem is on a 26' wide lot, so the stunning curb appeal wraps all around the unattached side to a deep extension in the rear.  Except for some water penetration in a few spots, the facade itself looks as bright and fresh as the day it was born.  And when the owner told us the house needed a gut, we believed him, but we had to see it for ourselves...

There wasn't much to see inside,  but it was nice to get a look at the light from the baywindows and corner rooms with two exposures.  A lot of work to be done, but a lot of potential.

Just two years ago, the New York times chronicled details of the 125 year history of next door neighbor 1372 Dean Street.

Back when it listed with Corcoran for and sold for $1.32M.  The gut renovation and conversion to a 4-Family at 1372 Dean Street is still on-going.  But they're killing it from we could see on the 1370 side...

It took us two years to get the owner to let us into 1370 Dean, which once was asking $2M.  With a week to go before foreclosure auction, there was a deal in the works over $1.5M.  And other offers trickling in around $1.2M-$1.3M misread the situation as distressed.  But with cash offers over $2.5M off-market on similar houses a few blocks away, we saw "over-paying" today for a flagship shell like this as a no-brainer, since it stands to appreciate at the crème de la crème pricing of the area.  As long as ho-hum shells like 204 Jefferson Avenue command over $1.6M...

Then 1370 Dean Street isn't hard to grasp over $1.5M.  If what was later treated like a shell sold for $1.3M over here two years ago, why not over $1.5M for the next-best shell?  Well, no one would know better than someone who's done it before.

The dream of scoring a steal at a foreclosure property is intoxicating to so many, but finding them and executing them is hard.  And sometimes the owners aren't even in the distress that the would-be buyers perceive.  Requiring cash, limited or no access to the property, plenty of additional capital required for renovations, uncustomary time-lines, wild card tenancy... it's not for the faint of heart.  So when you're chasing that foreclosure unicorn, you gotta remember it takes dreaming big, and executing even bigger.

Pro's:  out of control curb appeal, unattached on one side, windows galore, extension, lots of buildable sqftage left, basically gutted the old and ready for the new, great block with a unique variety of architecture, project next door lays the blueprint for the possibilities, landmarked block, ready to be a King Kong 1-2 Family or condo/rental project

Con's:  a lot of money for a shell, no original details left inside, took cash, had to move quickly, completely unliveable and requires a bunch of money and time into the gut renovation, may not net a product whose whole is greater than the sum of its parts on day 1 depending on how ya play it

Ideally:  a flagship property for another century to come, available to few, and understood by even fewer

Wednesday, September 23, 2015

Buy & Hold 8-Family Closed Last Week Over Asking Price: 245 Martense Street

Maybe you were too chicken to venture out to Church Avenue on the 2/5 trains when this gem was asking $859K in 2012, but we weren't.  We'd been hoofing it out to Church Ave since 2003.  Picked up for $869K just before the clock struck 2013, 245 Martense Street hit the open market this year for $2.4M, and closed last week way over asking price at $2.72M.  This 8-Family cash cow features original details, new upgrades, lots of free market apartments and stabilized apartments in line with or exceeding market rents.  No wonder it was perfect for buyers looking for solid return, capital preservation, and/or 1031 action.  No wonder this place made it to the top of Loopnet's most popular listings in Brooklyn on the open market...

Pre-market, the biggest commercial brokers told us to take offers we had in the $2.3-$2.4M range, saying they'd charge us 6 figures in commission and not net us anymore money.  But the building, affectionately known as "The Old Man", wouldn't stop there.

Sleep on Brooklyn at your own peril, but they still won't believe it until it happens a dozen more times.  Nobody thought $2,000+ 2BR's were coming to Lefferts, but we knew any deal around the corner from the 2/5 with legit BR's all over the place was poised to tick up, rent regulated or not.  We tried to tolja' back in June it was going down over ask; now it has.  And the hunt begins for the next project.

"But where is the next hot neighborhood in Brooklyn??" they always ask us.

Oh, silly!  It's not that simple.  It never has been.  You can overpay in any neighborhood, good or bad.  You can also underpay in any neighborhood, good or bad.  The trajectory of each building is case-by-case and not told by its zip code alone.  But they don't hear us though.

As even the Park Slope-mobile parks over in Crown Heights...

And Park Slope cats get houses boudgier than Fort Greene's people, on a block where investors are bidding $2M+ for a tear down frame house...

And $3M sales (not asking prices) are popping up in Bed-Stuy, where $900K scared people just 3-4 years ago.  And the word "gentrification" is even starting to sound too subtle...

Wu-Tang's "Cash Rule Everything Around Me" feels as poignant as ever.  Or just a good punchline...

We'll keep trying to breakdown the nuanced trends that conk trained eyes over the head, while Brooklyn keeps singing, "If you don't know me by now..."

Wednesday, September 16, 2015

Another First Hits the Open Market: 431 Prospect Place

On since May, this neat little 2-Family in Prospect Heights ripe for an end-user hit the open market last month and has an open house this week.  431 Prospect Place was a member of the coveted #notonstreeteasy club until just a few weeks ago.  Given what else is going on in the market, this totally turnkey upper duplex and garden rental 3-story on an extra deep lot is worth a look at the asking price of $2.35M.  While the "My First Sony" nay-sayers will be quick to point out the 17' width, that didn't stop our last look at 17' wide from fetching $3.2M in south Slope in a bidding war that even TV personalities couldn't keep up with.

But what the "My First Sony" buyers don't always factor in is that interior staircases and 2 entrances on these "narrow" 2-Fam's mean a net width in the rooms the same as a 20'-wider.  Either way, that didn't stop Clinton Hill's less-than-15'-wider 368 Grand Avenue for closing over $2.3M last year.

And 16' width didn't stop even Bed-Stuy's 22 Arlington Place from fetching over $2.2M last year either.  Granted, these are both 4-stories, but we're just saying.  431 Prospect Place is asking almost $1,000/ft, but on a whole-dollar level, we certainly can't blame them.  Nice original detail throughout:

A recent renovation may not be everyone's taste, but certainly gets the job done and lets buyers hit the ground running...

The 127' lot and modest deck off the parlor don't hurt either...

The gripes are built-in, but the pluses are there.  Especially since people paid almost this much for total shells in a need of a gut around the corner even 2 years ago.  If you want more than a duplex condo and you wanna be west of Franklin and you don't need Corcoran to blind you with staging and retouching and tuck you in at night with 6% commission, this is a good end user play at the right price.  With an open house tomorrow, it's even easier to see for yourself.   Platinum Members toured one even juicier than this in Clinton Hill for $2.2M and a 4-Family in Clinton Hill for $2.35M both off market this month.  #notonstreeteasy can't stop, won't stop!

Pro's:  cute curb appeal, totally turnkey & mortgageable, nice Prospect Heights side end-user play, condo alternative with rental income for many buyers, extra deep lot, original details, west of Franklin

Con's:  next to a large apartment building, not the most recent or hip renovation, 17' wide, won't stun you with staging, 1990's renovation at 2015 pricing, feels a tad high on price perhaps

Ideally:  if you won't go to Crown Heights proper for $1.8M and you don't want a condo in more prime Prospect Heights for $1.8M+, and you can afford over $2M, you should give this a shot

Thursday, September 10, 2015

Stylish Reno in South Slope Flies Off the Shelf: 468 11th Street

Listed for $2.95M at the beginning of the summer, South Slope's 468 11th Street had a few well-attended open houses and multiple offers right away.  This stylish little 17' wide 3-story 2-Family had lots of orginals details and cute updates that made it totally digestible for the retail market...

Little touches like the working fireplace, the small extension with two exposures, the skylights, the bountiful penny tile, the zoned heat and A/C, and inventive use of spaces made it a special house.  Goes to show that style trumps hefty budget any day.

One of our faves was the buddha crown molding...

Ikea, penny tile, original details and a little style go along way for this clean and sleek look that gives that warm fuzzy feeling of lived in even better than staging.  We saw your boy MNBC's Chris Hayes at one of the open houses, and he later told us at the tiki bar that he was outbid on this house.

When a dude with his own national TV show is getting outbid on tiny 2-Fam's in South Slope, you know this market isn't for the weak of heart (or wallet).  Many thought the asking price of $2.95M was asking to be underbid in the $2.6M-$2.7M range, but a contract was out in a few weeks and just a month later it closed in July for $3.2M.  That's right.  What the big 4-stories on more coveted blocks used to close for not long ago, the modest but stylish renos that get it right are now commanding.  No wonder offers over ask came in for a similar (down to the extension) pre-styled 2-Family at 155 Nelson Street in Carroll Gardens.  We were in a wider 2-Family off-market in Clinton Hill styled almost this nice on the duplex asking "only" $2.2M on the same block where Platinum Members copped an off-market deal last year for even higher.  468 11th Street sold for just over $1.3M in 2011, but when you make a product that people gotta have they'll pay up for it.  As in, over $1,200/sqft for a townhouse.  We'd much rather have a 5-story like 242 Gates Avenue for $3M, but that one's long gone.  The developers of 468 11th Street knocked it out of the park without over doing it at all and ya gotta tip your hat.  And don't expect to find a steal lurking - even when for sale by owner - when the TV folks are getting boxed out of the paint in South Slope.

Pro's:  great unique renovation, no big broker's commission needed, style for days, nice backyard, extension, basically and owner's triplex with a studio on the garden, AC, working fireplace, width isn't a deal breaker with interior staircase when the hallway isn't eating things up

Con's:  flew way over asking price and many people's budget, kinda budgety reno feel at times, not brand spanking new, already starting to show a little wear 

Ideally:  ultimately, ya can't hate on this one, not one bit.  Proof's in the pudding