Wednesday, February 8, 2012

No Upside in Park Slope, Pt. II: 229 8th Street

From our last post on an 8-Family building in Park Slope with no upside for $2M, today we bring you a 6-Family building with even less rental income for $2M. 229 8th Street has been on & off the market since July 2011, and is back out now. Anybody biting?

We have to give these folks a little credit over at "RUinSTYLE", which their Facebook page insists is "pronounced 'Are you in Style'." They took the time to really pitch a few of the upsides of the place and detailed the rent roll. However, just over $8,600/month gross rent isn't going to win over any investors. You can gross that much for less than (and sometimes half of) a $2M purchase price in Fort Greene or Clinton Hill or Crown Heights. Commercial loans take at least 25-30% down, but this rent roll would mean at least $1M down, at which point, why not just go somewhere else? Looking at this building doesn't scream "RU in Style?", but the price certainly screams "RU kidding Me?"

Besides, the rents are already pretty much top of market. That one straggler paying $535/month must be rent controlled or rent stabilized. But even if that caught up to the rest of the other rents overnight, it wouldn't make that big of a dent. While most places brag when they have a legitimate 2nd bedroom (rather than that narrow "office" space), this listing boasts, "True 1 Bedroom – can fit a queen bed." Heck, for $1,650/month, we would certainly hope so! Will the "generous additional 2000 sqft of development rights" actually pan out? Maybe someone can come up with something nifty for this paved backyard?

Please tell us at what price this even starts to get interesting, or what angle makes this a truly a "fantastic investment". If you had this money in Park Slope, get a brownstone. If you want cashflow, get something way better somewhere else.

Pro's: well, it is in Park Slope

Con's: no cashflow, no upside, no curb appeal, not even big

Ideally: why bother?

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