Friday, November 23, 2012

Off-Market Deal In Contract: 613 Washington Avenue

Last month, Platinum Members got the early heads-up on a great off-market estate-type deal on Washington Avenue, just down the hill from our last mixed-use play.  On the east side of Washington Avenue, the boundary of Crown Heights and Prospect Heights by some accounts, this tiny 2-story tire shop with an apartment above was up for grabs with a price to beat of $510K.  Now Halstead has listed the place at 613 Washington Avenue for $600K with "Contract Signed" on their listing.  Well, what's the point of that?   Local broker Mia Bailey, who brought us the deal last month and is direct to the owner and his attorney, tells us she doesn't really think Halstead even has the listing.  Hmm...

Since Mia told us the place is so janky inside, and the rental income isn't much to speak of, we figured someone might pay the $510K anyways, even just as a tear-down, simply for the privilege of being on this budding Washington Avenue.  Which then got us thinking, what about the adjacent vacant lot on the corner?  One need look no further than developments across the street that have sold for upwards of $600/sqft, and ones yet being built, to see the potential for development here.

Now proven developers and their wanna-be's love to drive around town in their SUV's and tell us which corners they'd love to develop.  However, 9 times out of 10, those corners aren't for sale and aren't interested in selling.  So it's just this pipe dream, and we can't figure out why these folks continue to indulge in it.  They show up to a showing for a great off-market renovation project, point at a different house minding its business across the street and say, "Now THAT'S the building I want!"  Which we've always said is like going on a blind date and saying, "You know what?  The waitress is cuter.  I'll have her instead."

Well the waitress may not be on the market, playboy.  Yet in this particular case, as luck would have it, the lot adjacent to 613 Washington Avenue IS interested in selling too.  So we spoke to the owner who said he wants $800K for his vacant lot, which is pretty absurd in our (and everyone else's) opinion - especially since his only near-term plans for it are to rent it out as parking, which won't yield more than a few hundred per month per space.  However, if one owner's price is a bit high and another's is a bit low, there may be a happy compromise in the middle closer to the price per buildable square foot that makes sense for someone with the vision and funds to make it happen.  Anybody can tell you, "That's $150+ pbsf, too high," but it takes a real G to get in there and work the deal properly.  If you've been scoping out waitresses for months, and you finally find one that's down, what else are you waiting for?

Pro's:  location, value, adjacent vacant lot interested in selling, so many things you can do when you pick up even a janky 2-story for the price of a 1BR condo over here

Con's:  in contract already?, odd-sized lot, takes funds and vision to maximize potential

Ideally:  what's the point of listing something in contract for $90K higher than the latest accepted offer?  Get in there and find out.

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