Friday, June 8, 2012

"Straight Cash, Homie": 331 8th Street

Unicorn Hunters, take heed.  How did this beautiful single-family fixer-upper in Park Slope, on a lovely block between 5th & 6th Avenues fall from $1.795M ("PRICED BELOW APPRAISED VALUE") in early March, to $1.67M 3 weeks later, to closing for $1.55M last month?  You heard that right, a Corcoran listing at 331 8th Street going for $245K under (not over) asking price?

The answer?  "Straight cash, homie."

Which was Randy Moss' explanation for how he paid a $10K fine the NFL slapped on him for mock-mooning the Packers fans in Lambeau Field in 2005.

Moss claimed to not use checks, and some buyers simply don't use financing.  Cash gets the job done.  Jay-Z said, "If money talks, the whole world 'bout to hear me out."  Nice gig, if you can get it.  Cash is quicker and more decisive than banks and appraisers, which are the #1 reason that contracts fall through.  Which is exactly what happened on great buys that should've closed last year, that Platinum Members got a 2nd stab at when the properties were momentarily back on the market.  Great properties at great prices like 270 Sterling Place, 71 Irving Place, and 1142 Dean Street.  Few have the time to nag absentee brokers who were barely there the first time around, but BK to the Fullest doesn't stop 'til the deal is dead, because contracts do fall through.  Which, incidentally, is exactly why brokers rarely reveal their actual contract price when a building is in contract (for all of you Nosey Nancy's who simply must know what every last comp is before you put in a bid) because they don't want to diminish their leverage by revealing what price the seller will accept, in the event that they're ever back out on the market.  Which is why even last week's NYTimes typo article couldn't deliver a firm contract price on the flagship property in their cover story:

"The building is in contract for an amount higher than the asking price.  Mr. Gennaway would not reveal the sales price before the deal closed."

Those who don't understand this process claim to be "shooting in the dark", even though there is an absurd amount of public information in this industry already.

But back to the matter at hand... cash got it done on this fixer-upper with tons of original details and updated mechanicals.  Besides, who wants to update the mechanicals anyways?  That's the boring part.  The fun part is the rest of the interior.  And this 18.5' x 45' is a healthy-enough floorplate to put the finishing touches on.

Get that roof deck going and you're really cookin' with gas.  (While no pun intended, note, "the fuel system has been converted to gas, and the oil tank has been removed")

Many will see this sale and this beautiful exterior and think, "How'd I miss that great buy just a touch above $1.5M?  I would've put $300K down on that!" without realizing that only cash made it happen at that low of a price, there's no rental income to be had as-is, and that the place may undergo another $500K in renovation yet.

Pro's:  curb appeal, location, original details, updated mechanicals, keep as a single family or convert to a 2-Family for more income

Con's:  gone already, takes a HEFTY bunch of cash upfront, still work to be done, most won't understand the nuances on the sale, no rental income as-is

Ideally:  if you don't have this kind of cash, at least realize the power of financing and apply it accordingly

1 comment:

  1. Even better than cash...accepting the 10 year construction project across the street and a lifetime smell of the new YMCA pool permeating your house when said construction project is finally finished. I would say that both merited the substantial discount. Plus, 8th between 5th and 6th on the other side of the street ain't pretty. Perhaps a bargain, perhaps not.