We've been telling you for months not to fear the brownstones trading in & around Park Slope at prices that condos sell for everyday in Manhattan. Now some are pressing the panic button about above-ask prices in Crown Heights, 4 of which we've covered this month. However, let's keep things in perspective here. Townhouses in Crown Heights still trade like condos just a few blocks west. And prices in Crown Heights still haven't surpassed some of the sales logged back in the go-go, pre-crash mid-aught's of 2006. That fall of 2006, someone picked up this 16' x 45' 7-Family at 905 Sterling Place for $1.2M. With lots of rental units just 3 blocks from the 3 train at Nostrand, we see the potential that buyer saw. But then came the crash in 2008, finances worldwide were disrupted, and this property faced various liens from the bank for $996K in 2010 and 2011. Now the property's headed to foreclosure auction this Thursday:
People gravitate towards distressed properties with the perception that there's a deal to be had. The hardest part with foreclosure auctions, though, is all the uncertainty. Who's living there? How much are they paying? What condition is it in? Why should I step into the shoes of an owner with a failed venture? With a limited or non-existent window to check out the property prior to the auction, it's hard to quantify the property's value and its potential headaches. There are a few due diligence techniques available to the savvy, but typically there's truly an element shooting in the dark when bidding sight-unseen at a foreclosure auction. If you want to walk by & scope out the exterior, maybe the address is still spray-painted on the stoop, so it shouldn't be hard to find...
We've got our eye on a different play going to auction this week, but this one's also interesting for sure.
Pro's: extra-deep lot and plenty of buildable sqft, does distress mean a deal?
Con's: narrow, huge questions marks including tenancy & condition, gotta have the funds at the auction
Ideally: tread carefully with auctions. Price for the worst and hope for the best.
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