Thursday, May 22, 2014

"I Got 5 On It": 459 Lexington Avenue

We were excited to reach out to a local broker in Crown Heights for leads on any properties they might have in Brooklyn.  When they pitched us a 2-Family in Bed-Stuy for $1.1M, it was potentially interesting.  We felt a little played when we looked up the house and saw it listed on Zillow for $999K, down this month from the initial asking price of $1.3M.  But, it's not the broker's fault.  Brokers are at the whim of their sellers.  And if the seller wants $1.1M, they can hold out for that price.  We told them if they have $999K already, they should take it.  So they showed us the house.  Take a look at 459 Lexington Avenue, 'cause "I got 5 on it".   It's a renovated 3-story 2-Family in Bed-Stuy...

All new mechanicals, kitchens, and baths.  You get a 3BR/2.5 bath duplex on the bottom with an okay yard, and a 2BR floor through on top.

 Washer/dryer hook-ups in the bottom duplex, and a unit already installed on the top floor...

Finished basement is clean and use-able space too...

As a condo alternative, it's makes sense.  You get a yard, 2 floors, and a rental.  They took advantage of the space with rental-friendly layout and very usable basement.  There's some walk-in closets, a few other touches.  As generic gut renovations go, 459 Lexington is not quite as stylish as north Fort Greene's 179 Park Avenue, another 3-story 2-Family which listed for $999K and sold for $910K this month.  They didn't even put a dishwasher in either kitchen of 459 Lexington Avenue.  We put dishwashers in $1,600/month rentals!


Even in this market, you need some real bells & whistles to command $1.1M or higher for a 3-story deep in Bed-Stuy.  As we covered this month, end users are coming deep into Bed-Stuy and paying over $900K for small renovated flips and other properties.  Including 730 Hancock for $999K, 486 Halsey for $975K, 937 Greene Avenue for $920K, 768 Hancock for $980K, 652 Halsey for $1.07M, 419 Halsey for $935K, and 434A Jefferson Avenue for $999K.  A buyer from Chelsea bought 380 Herkimer for $950K and a buyer from the East Village bought bought 946 Greene Avenue for $1.1M.  But that was a 4-story.  684 Greene sold for $1.2M, another 4-story. 

A 3-story on a block that's not super quaint and isn't super close to the train, we're not seeing $1.1M quite yet.  But soon you'll be seeing this house listed with a seasoned big broker aiming to fetch that price or higher.  The big brokers' pitch is they'll get you 10% more and charge you 6% to do it, and often they're not wrong.  (The buyer's brokers at the big firms, by the way, also tell clients to bid 10% over ask if they want the house, so it's kind of an insular, self-fulfilling prophecy.)  We bet the owner the house doesn't go over $1.1M.  They raised the stakes and a fist bump serves as the handshake.  So, "I got 5 on it", and we're interested to see how it turns out.  As always, the market will tell the story.

Pro's:  totally renovated 2-Family condo alternative, backyard, washer/dryer for each unit, finished basement, do-able pricepoint for dozens of buyers, chopped into rental-able bedrooms

Con's:  run of the mill reno, would've been so simple to install a dishwasher, wants more than asking price, some bedrooms are kind of small, not the most prime location

Ideally:  perhaps a big broker can bless the house with a big sale price

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