Monday, October 19, 2015

Park Slope Shell Game: 373 Bergen Street

There were doubts, but the $2M shell game is alive & well in Park Slope.  Even on the gnarliest of little houses.  373 Bergen Street came out for $1.75M and lasted 2 days on StreetEasy before the response was so tremendous the listing wasn't necessary anymore.  Off-market finders shopped it to us when the high offer had already bubbled up to $2M, which didn't seem too far-fetched for Platinum Members to still take a peek.  And there wasn't much to see...

Basically the remnants of a shoddy reno that stalled-out midstream.  So it was no wonder the Elliman listing didn't even both with interior photos.  First popped on our radar back in 2012 when they caught a stop work order and Dixon was curious about it.  This summer's asking price is a healthy boost from the $655K the deed traded at this February, but those trades are rarely as simple as they appear.  Stumpy and only 32' deep, it seemed like the worst of breed at the time in 2012, but with the way prices have been recently and so little else left to choose from, this suddenly becomes a prime shell in the Park Slope shell game for the right developer - even at the $2M.

Or at least one of the only things left at this kind of entry point.  Earlier this year a similarly uninspiring house across the street with the Fred Flinstone front (which ain't hard to change) came out at 382 Bergen Street...

Without much inside to get too excited about either...

It lasted a month on the market with a local broker asking $2.65M before going in contract in July.

And even the SRO shells of yesteryear command $2M these days, like 268 Dean Street which closed in June for $1.95M.

And Platinum Members were happy to pick up another one of these around the corner on Bergen for $2M cash and are already anticipating a sell-out over $5M.  If these gains are realized, it makes the $2M shell make sense, as astonishing as this is, even for frame buildings architects dubbed "better as a tear-down," and still reiterated interest at the $1.7M-$1.8M levels.

This week we'll take a look at another Platinum pick-up from last year at $1.85M that's got interest in closer to $3M with barely any renovation.  Now we're eyeing some of our favorite next-best shells and better-than-shells - on and off market - in Boerum Hill, Fort Greene, and Prospect Heights asking $1.75M-$2.75M.

Pro's:  north Slope location, vacant and ready for a project, pimped out condo or 1-2 Family potential, in line with shell pricing these days, a hunk if built to full

Con's:  small frame house, needs a total gut, gone already above asking price, took cash purchase and lots of renovation budget, not the best block although well-situated, dubbed a tear-down by architects

Ideally:  a lot for a shell, but a sky's-the-limit location for high-end sell-outs.  Shows where that spec market is at.

Wednesday, October 14, 2015

Tantilizing Glimpse into Crown Heights Foreclosure Gem: 1370 Dean Street

It's not everyday that you get a sneak peek at an 1880's castle in Crown Heights the weekend before its foreclosure auction.  But that's where took Platinum Members two weeks ago at 1370 Dean Street.  This single family gem is on a 26' wide lot, so the stunning curb appeal wraps all around the unattached side to a deep extension in the rear.  Except for some water penetration in a few spots, the facade itself looks as bright and fresh as the day it was born.  And when the owner told us the house needed a gut, we believed him, but we had to see it for ourselves...

There wasn't much to see inside,  but it was nice to get a look at the light from the baywindows and corner rooms with two exposures.  A lot of work to be done, but a lot of potential.

Just two years ago, the New York times chronicled details of the 125 year history of next door neighbor 1372 Dean Street.

Back when it listed with Corcoran for and sold for $1.32M.  The gut renovation and conversion to a 4-Family at 1372 Dean Street is still on-going.  But they're killing it from we could see on the 1370 side...

It took us two years to get the owner to let us into 1370 Dean, which once was asking $2M.  With a week to go before foreclosure auction, there was a deal in the works over $1.5M.  And other offers trickling in around $1.2M-$1.3M misread the situation as distressed.  But with cash offers over $2.5M off-market on similar houses a few blocks away, we saw "over-paying" today for a flagship shell like this as a no-brainer, since it stands to appreciate at the crème de la crème pricing of the area.  As long as ho-hum shells like 204 Jefferson Avenue command over $1.6M...

Then 1370 Dean Street isn't hard to grasp over $1.5M.  If what was later treated like a shell sold for $1.3M over here two years ago, why not over $1.5M for the next-best shell?  Well, no one would know better than someone who's done it before.

The dream of scoring a steal at a foreclosure property is intoxicating to so many, but finding them and executing them is hard.  And sometimes the owners aren't even in the distress that the would-be buyers perceive.  Requiring cash, limited or no access to the property, plenty of additional capital required for renovations, uncustomary time-lines, wild card tenancy... it's not for the faint of heart.  So when you're chasing that foreclosure unicorn, you gotta remember it takes dreaming big, and executing even bigger.

Pro's:  out of control curb appeal, unattached on one side, windows galore, extension, lots of buildable sqftage left, basically gutted the old and ready for the new, great block with a unique variety of architecture, project next door lays the blueprint for the possibilities, landmarked block, ready to be a King Kong 1-2 Family or condo/rental project

Con's:  a lot of money for a shell, no original details left inside, took cash, had to move quickly, completely unliveable and requires a bunch of money and time into the gut renovation, may not net a product whose whole is greater than the sum of its parts on day 1 depending on how ya play it

Ideally:  a flagship property for another century to come, available to few, and understood by even fewer