Off-Market Platinum Member Closing Yesterday: 446A Classon Avenue

Yesterday, Platinum Members closed on an off-market 2-Family house on the Clinton Hill / Bed-Stuy border across the street from where similar homes have gone over $2M.  With renovated 15'-16' wide 2-Families as far as Bed-Stuy selling for over $2.2M cash, getting one of these under $2M is actually a good look in this market.  Owner's triplex over garden rental?  Yes, please!

Don't forget the backyard...

 

We toured another house pre-market just like this in Clinton Hill this week that's sure to fetch this price or higher.

Pro's:  curb appeal, stylish & turnkey renovation, triplex over garden rental, interior staircase makes the most of the 15' width, great off-market buy, no bidding war or big commissions to big brokers

Con's:  narrow, gone already, not available on the open market, not everyone's ready for Classon

Ideally:  another quintessential 2-Family on the Clinton Hill side for a relative value

Introducing Our New Website: HomeCanvasr.com

It's been 4 years now since we've been trying to crack the nut that is the inefficient real estate market in Brooklyn.  And now we're introducing a new approach to real estate buying and selling that is unlike anything currently available in brownstone Brooklyn.  Our new website HomeCanvasr.com launches today and is an all-purpose real estate platform that allows buyers to claim their search criteria and match up directly with listing agents and homeowners for properties on or off the open market.  The site allows homeowners to claim their property and automatically see how many buyers are looking for homes in their neighborhood and price range.  It allows listing brokers to post properties they have exclusives on, properties they have leads on, or properties that may never hit the open market place - allowing them to tap into real time buyers as well.

So far this year we've consulted on 15 deals that are sold or in contract, and more than half of those were pre-market or off-market listings.  That means these deals never hit StreetEasy, NYTimes, Zillow, Trulia, or any other traditional real estate website.  Many of these deals had no brokers involved at all, and the buyer and seller could pass the savings of six-figure commissions on to themselves.  Some sellers were just "sell-curious", with a price in mind, but didn't want to commit to a listing.  On one amazing house in Prospect Heights, we met with one buyer, brought them to that one house, and there was a fully executed contract just a few weeks later.  Why does Corcoran have to make $150K+ by jamming themselves in the middle of that transaction?  The house is in contract around $3M and could've easily sold for more, but not necessarily net the seller that much more money.  There's nothing wrong with Corcoran; they're a huge component of the retail market place.  But it is not an "one size fits all" situation.

Another deal we consulted on in Prospect Heights for $3.25M was never going to hit the market for reasons personal to the seller.  But Platinum Members had their chance at it, and eventually we consulted the buyers who closed on that property for ~$250K less than the on-market property next door.

Another deal we consulted on in Clinton Hill that's closing tomorrow is owned by a Corcoran broker who could've had 200 people at his house at the click of a button, but his wife didn't want 200 strangers in their house just to fetch market price.  We brought in two Platinum Member buyers, each of whom bid nice prices on the property, and one got that house while another one got a different pre-market opportunity in Clinton Hill.  People are constantly intercepting deals before they even hit the marketplace.  Curbed is currently touting a listing available on HomeCanvasr.com that we've been scoping for months that is just now finishing its renovation, but has offers that may ensure it never even hits the open market.  Talk about beating the open house!

We needed to find a way to channel this activity to a platform that's scale-able and crowdsource-able, that allows participation from buyers, sellers, and brokers on their own.  The decision to buy or sell a house doesn't happen overnight, but if you find the right buyer or seller, it certainly can be expedited.  Many houses are "available" for months before they actually hit the open market.  HomeCanvasr.com allows for that.  Heck, even our own house is for sale on the HomeCanvasr.  We know it's worth a lot more than we paid for it, and we know every broker in town who could sell it, but we don't wanna commit to a listing at this point.  However, if a buyer wants to come along and pay our price, we're game!  Just like it was for us, HomeCanvasr.com should become the first stop for all sellers looking to tap into real-time buyer data and pricing for their home, with or without a broker's commission.

Basically, in an effort to launch a campaign to create a true multiple listing service (MLS) in Brooklyn over the past few years, we found out many reasons why that's not happening anytime soon and whose interests that doesn't align with.  Along the way, many people also voiced to us that a comprehensive listing service isn't even what they want.  People enjoy our "curated" approach on BK to the Fullest to analyzing and comparing listings.  And at the same time, everyone wants that secret 'ish, as Brick Underground was so quick to quote us on.

Certainly in the beginning, the main thrust of HomeCanvasr.com will be the pre-market and off-market "secret listings".  Buyers specifically want listings that aren't on the open market because of their real or perceived discount off of market price.  Buyers who wouldn't pay $3.2M for a huge corner 8-Family building in Bed-Stuy (because it was on the market), bid $4M sight-unseen on a huge corner 8-Family building in Bed-Stuy (currently featured on HomeCanvasr.com) because it's NOT on the open market.  Yeah, that's right, people wanted to pay $800K MORE because it's NOT on the market.  Different strokes for different folks.

And, in turn, many sellers want to sell their house on their terms without paying a broker tens of thousands or hundreds of thousands to bring the same batch of buyers that are already looking for the same set of houses.

A few alarming facts remain about the Brooklyn real estate market (a $19 Billion sales industry last year), and the NYC real estate market at large (a $38 Billion dollar sales industry last year)....

- no matter how much money you have, no one person, brokerage firm, or website can tell you everything that's available for sale.  Think about the implications of that.  People with $4M cash in the bank run around like scavenger tenants looking for a studio apartment.  To save her life, Barbara Corcoran couldn't tell you how many brownstones are for sale in Park Slope. (Granted, she also sold the firm years ago...)  As we pointed out 4 years ago, that's as if Kayak and other travel sites didn't sell airfares out of JFK or La Guardia.


- no matter how much money you have, little if any brokers will take you to a listing they don't know they can get paid on.  That's why even the richest buyers complain to us that even the best brokers just send them their company's listings and rarely do anything for the buyers that the buyers couldn't do themselves.  Brokers know about tons of off-market listings that they aren't guaranteed to make a hefty fee on, therefore they rarely if ever take clients there.  That means your own broker may know about the perfect house for you, but won't take you there because they're not guaranteed 6%.  That's why people come to us for consulting services because we take buyers to every possible listing (and consistently make less doing $3M deals than what brokers would make on a rental in that same building).  We figured there has to be a way to scale this activity, because our bandwidth is only so wide.

HomeCanvasr.com is in its early stages, and we expect multiple iterations of functionality and expansion.  But for now we already have dozens of listings not available anywhere else on any website, from sellers and brokers you would have to eat, sleep, drink real estate to even have a chance of hearing about.  And even then you may still miss these listings.


For buyers:  it is absolutely free to sign up with your search criteria on HomeCanvasr.com, and we are currently charging a subscription fee to get full access to the secret listings that haven't yet or will never hit the open market for various reasons

For sellers:  it is absolutely free to sign up and claim your house, upload pictures, and automatically see how many qualified buyers are searching for homes just like yours

For brokers:  it is absolutely free to post listings and only verified buyers can see the secret ones

As we've been saying for years, someone bigger than us, smarter than us, more connected and more experienced than us should've cracked the code on this long ago.  Yet Brooklyn real estate's inefficient market still needs to be dragged kicking and screaming into the 21st Century, for many nuanced reasons not apparent to everyone from novice would-be buyers to even top brokers who have sold $500M+ in real estate in the past few years.

The proposed ways of monetizing the HomeCanvasr.com site have gotten pushback from even the highest up heads of the biggest real estate sites.  That's until we tell them we have an off-market listing in the neighborhood they've been looking for, and they practically sign away their first-born child to hear us tell them one address.  In this market, the right address can be worth $200,000 (or much more!) of upside.  That's why people paid us $2,000 for private consulting to even hear about these leads and listings.  Is HomeCanvasr.com's $200 membership fee and $50/month really too much to ask for an increased chance at finding and landing the home of your dreams?

Duplex Clinton Hill Condo at Bed-Stuy prices: 355A Grand Avenue

If you want an upper duplex Clinton Hill condo at Bed-Stuy prices, with private roof access and parking, look no further than 355A Grand Avenue.  On Platinum Member radar for a few months, this new construction condo is 1,200/sqft of 2BR/1.5 bath goodness on a quaint block in lots of people's next-favorite neighborhood behind Fort Greene.  We sublet one of these garden duplexes in 2008 during the crash and fell in love with the neighborhood.  It's not everyday that you can cop two floors of a place a block away from Mr. Brownstoner himself for less than $850K.  With an open house and an asking price of $815K, we think this is a great look for dozens of buyers out there, especially those eager to dodge the Corcoran bidding wars.  The interior isn't exceptionally shiny & new, but it doesn't have the problems of 100 year old houses, and affordable cosmetic upgrades are fun to do.
 

People paying this price or higher in even newer condos on only one floor still spent time and money updating their 2008 new construction.  So of course early 1990's construction could use some touch up.  But the place is totally pleasant and live-able as-is too.  And who else is giving you central air, a gated parking spot, laundry in the unit, and common charges under $325K/month?  We were in a pre-market house across the street yesterday that's worth $2M+ even if it's only 15' wide, and neighbors are fetching over $3M when they play it right.  So this is a great pricepoint to jump into this block at. 


With an open house this Sunday from 1pm - 2:30pm, it's easy to see for yourself.


Pro's:  pricepoint, duplex layout, newish construction, gated parking space, laundry in unit, roof access, totally live-able, pretty prime Clinton Hill at Bed-Stuy price per square foot prices

Con's:  not the most amazing curb appeal, could use upgrades to optimize, you probably missed the land round of these in the $700K's

Ideally:  a great deal for buyer and seller can't be far away

Corcoran Listing Sells for Half-Off Its Neighbor's Price: 5 Arlington Place

"Don't send me Corcoran listings," is the rallying cry of those intent on peeling back behind the retail real estate market and finding opportunities that trade at less market-efficient prices.  Especially in a neighborhood like Bed-Stuy, whose market functions more like the Wild West at times than the big brokers are used to.  But scoffing at a listing just because it's Corcoran isn't automatically a shrewd strategy either.  Every deal is case-by-case, and who has the listing doesn't always determine what premium it trades at.  Case in point, 5 Arlington Place selling for $1.05M last month to a buyer from lower Manhattan, half the price that huge investment group paid for the narrow, record-breaking 22 Arlington Place right across the street for $2.25M.

How come a 20' wide house with a Corcoran listing for all to see sells for less than half what its 16' wide neighbors sold for?  (Not to mention the $1.7M+ activity on next door neighbor 7 Arlington Place and 1 Arlington Place.)  Well, 5 Arlington Place may have much of the same details that everyone loves its neighbors for...

But the biggest thing stopping this from trading at the tippy-top townhouse prices that its neighbors are selling for was the 6-Family status of 5 Arlington Place.  Most home buyers want as much of the house to themselves as possible, and aren't up for rent stabilized tenants, even if the rents are basically market.  The comments on Brownstoner for 5 Arlington's listing pretty fairly sum up both sides of the story.  We were actually quite impressed with the condition and rent roll when we toured the house, and thought people casting it off for its Corcoran and/or 6-Family status were missing a bit of a diamond in the rough.  Of course, there a deal-breakers involved for most buyers and investors, but for the gobs of people writing us every day aching to throw some money into the real estate game, and coming up against dozens more folks with much deeper pockets, this was a sweet little piece at a way-affordable price point.  Everyone wants to "invest money in Brooklyn real estate", but few people have an actionable angle on how to do so.

We couldn't get anyone to pay over $900K for 5 Arlington, and we would've done the deal ourselves if we could've, but a savvy buyer took it down for its reduced asking price.  When your smaller renovated & unrenovated neighbors sell for as much as twice more than your cost basis, you don't even have to get down to nitty-gritty on price per square foot & other metrics.  These are some killer bones for about a million with paying (although stabilized) tenants with way-decent apartments.  The basement is relatively clean with updated mechanicals, pretty new boiler, 2 water heaters for modular functionality, solid arched-brick construction...

These are the little things that add to the turnkey-ability of an investment.  Then the original details inside make for renovating "the fun stuff" like cosmetics, kitchens, and baths.  If you think making the most of an investment like this hinges on drastic measures like all of your tenants leaving or not, then you're mischaracterizing the game, and you're not going to like the majority of deals that ever come available.  Few owners have the time, finances, expertise, and/or interest in foregoing the rents on 6-8 or more apartments over an indefinite amount of time, just to offer up a building on a platter for you.  The same way you don't want your investment mired in rent stabilization indefinitely, they don't want their investment mired in vacancy indefinitely.  You don't want to kick out tenants, guess what?  They don't either.  It's a two-way street.  Much of these apartments, by the way, (did we mention?) are way-decent as-is...

When people who swear they can see a diamond in the rough end up looking a gift horse in the mouth, for only a fraction above what even the shrewdest low-ball investors offered all-cash sight-unseen, they're missing something.  The buyer of this place has a great piece for a long time to come.  A genie in a bottle at a great pricepoint on a great block with the upside that not "years down the line", but already evidenced by 5 sales on the same block much higher than this in the past week to 9 months.


Pro's:  curb appeal, sick original details, rental income & townhome potential, pricepoint half what the neighbor sold for, lots of upgrades and live-able apartments

Con's:  gone already, needs work, fully occupied with rent stabilized units, not set up as the townhomes that everyone loves

Ideally:  owner occupy a unit or two at less than half what your neighbors paid, or play it purely investment

Another 2-Bagger on the Bed-Stuy Border: 441 Classon Avenue

Welcome to Brooklyn, where narrow 15'-wide 2-Families can close for a million last June then close over $2M this June.  Let's aspirationally call this Clinton Hill.  Afterall, Corcoran sure does.  After closing last year for $999K, this house at 441 Classon Avenue needed a ton of work and immediately came to market asking $1.495M-$1.395M.  Why not?  If someone's willing to give you half a million more than you paid that week without you putting a penny into it, go for it!  Heck, it costs nothing to ask.  House wasn't much of a looker then though...

It was available on and off-market for some time, for the right price, through various brokers - but by the time the reno's done and Corcoran shows up, that's "the coast is clear" signal for the retail buyers to pack in.  Just like we saw at 17 Chester Court.  Except, 441 Classon Avenue was back out with an asking price of $2.15M.  While that elusive "million dollar live-able fixer upper in Clinton Hill" still rolls off everyone's tongues, in reality this is a 15' wide house closer to the Bed-Stuy end of things asking over $2M, y'all, and commanding it!  People who have never bought a piece of real estate in their lives swear they're going to run laps around experienced developers whose full-time job is sourcing properties cheap all-cash, renovating them with & without permits, and bringing them to the pre-market or retail market.  If you can do it better than them, then you do it.  But until then, they'll just sit back at home in Great Neck and gladly sell it to you for twice what they paid for it.  The house closed this month for over $2M to buyers from around the corner on Greene Avenue.  Sure cleans up nicer in pics than it used to...

The renovation was dubbed way-generic by people we spoke to.  But they hit the high notes with some floors, sliding door to a generic backyard with bright red mulch, higher-than-usual finishes in the kitchen for this breed of developer.  Pretty much the usual, with a slightly more snazzy twist.  File this price under the same "shock & awe" category as 196 Hancock & 22 Arlington Place both going over $2M in Bed-Stuy proper.  Ostensibly, to be closer to Clinton Hill, there'll be a trade off.  In this case it was width and quality of the reno.   An even better, wider, Clinton Hill/Bed-Stuy tweener at 84 Lexington Avenue was already long gone by the time 441 Classon got the Corcoran treatment.  We heard about this 441 contract price when it happened, which was some food for thought for Platinum Members who were in the midst of taking down another narrow 2-Family on this same block with a better renovation that wasn't going to hit the market, even though it easily could have.  Gotta love wading in the the dark pools of this market!  The Platinum Members' contract price is significantly lower, and the owner figures he doesn't need to give the rest of the upside over to Corcoran for no reason.  In a high-demand, low-inventory market like this, these houses pretty much sell themselves.  But if you still need a big broker to hold your hand, keep in mind that holding doesn't come cheap.



Pro's:  totally renovated quintessential 2-Family, backyard, actual listing, "Clinton Hill at Bed-Stuy prices!", didn't go over asking price

Con's:  gone already, 15' wide, renovation isn't for everyone, price is twice what it was last year, not everyone's favorite block, retail pricing

Ideally:  another retail sale for the area that everyone will take time to understand and digest.  Certainly a reassuring comp for those in contract for less on an off-market deal across the street.

Projects: Rental Reno, Pt. II

Following the success of one rental renovation of the kitchen and bath in a Platinum Member purchase, we've done a few more, and the team's really gotten it down pat.  Our main man Steve and his guys know that when you put it down in the kitchen, ya gotta do the cookin' by the book.  They transformed this...

Into this...

Getting a sleek, clean look quickly and affordably is not hard to do with the right folks on the job.  New floor tile, new cabinets, new appliances, tile backsplash, wood countertops... this place has it all.  Ever seen the fridge with the butta-fly doors?

Five burner stove with double ovens.  Custom built shelving in the dumbwaiter after bringing up new electric.  Even concocted an idea for an extra 10" space between the cabinets and the wall.  A slim spice rack was proposed, but the winning idea was a wine rack...

The before and afters are pretty telling....

Bathroom was pretty hurting...

So we had to freshen that up...

A quick paint job, then refinishing the original parquet floors...

Install some new floor where the parquet was damaged, some new light fixtures...

All in all, another original rude boi renovation.  The end result is still some of Brooklyn's most affordable by-the-bedroom rentals.  Being one block from the 2/5 trains and near Prospect Park still beats anything you see along the L line.  The open house was cancelled when the first prospective tenants walked in and said, "We'll take it."  Can't wait to sink our teeth into the next renovation...

Closings of Note: Condo Watch Continues

To understand why fixer-upper townhomes keep soaring, it's important to check what the condos are doing too.  Gotta keep it all in perspective.  Today we're looking at recent condo sales in Brooklyn and what they have to say.  174 Washington Park in prime Fort Greene may be "close to the BQE" if all you know about Brooklyn is how to Google Map it.  But one man's "off the beaten path" is another man's "across the street from Fort Greene Park".  Cue this condo conversion in a brownstone that managed to sell out in a flash with a clean, generic renovation and a Corcoran listing.  One of the floor thru's, apt #2, listed for $799K, some $950/sqft, and closed for full asking price to buyers from the East Village.  A nice price point for a legit 2BR in prime Brooklyn, to be sure.  Still makes 300 Clinton Avenue look like a deal, if you ask us.  Apt 3 in 174 Washington Park went over $800K and over $1,000/sqft.  Or, when you're ready to run with the big boys, check out the 3BR duplex in apt #1, listing for $1.449M and closing for $1.7M.  Yes, while an entire townhouse around the corner was flailing its way to selling at foreclosure auction for $1.7M cash at 306 Clermont Avenue, half of a brownstone was trading for that same price as a condo well over asking price.  We couldn't believe when Platinum Members balked at an even nicer duplex around the corner asking $1.2M-$1.3M pre-market, with a bigger backyard.

Speaking of full asking price in Fort Greene, 268 Cumberland, #2A, was a nifty 2BR in a small, tasteful new construction condo just off the park.  Closed for $849K this month, AKA over $950/sqft no matter how you calculate the square footage.  The buyer?  From Manhattan, where else?  Near Grammercy Park.

Even though it's happened a few times in a few neighborhoods, joker developers tried to tell us you couldn't get $1M for a sick floor-through apartment with original details on an amazing block in Prospect Heights.  Ha, so how come an generic one in "meh" building sells for almost $900K on the same block?  222 Park Place, #3B closes under asking price of $995K, for $872K, still almost $950/sqft.

Or maybe you like your generic new buildings with decent condos inside a little closer to Barclays like 391 Dean Street #2C.  With a balcony, this 2BR/2 bath closed for $952K last month, or well over $1,000/sqft.  The buyers?  From the Upper West Side, y'all!!

Or hop across Flatbush over to Newswalk in Prospect Heights, where 535 Dean Street, #907, complete with private deck, closes for $1.32M to buyers from Jersey City.  Brace yourself for high common charges, but a full-service building to be sure.  $1,000/sqft for some of Brooklyn's best condos?  Yup, again & again!  Still better than Billyburg in our book.

Speaking of better than Billyburg, a buyer from Williamsburg stepped over to the dark side!  For condo value on the Crown Heights side of Prospect Heights, the generic 1BR can be had under $500K, but it's still gonna cost you over $800/sqft.  493 Park Place, #4R listed for $399K and closed for $449K.

Speaking of value in Crown Heights, 590 Sterling Place, #201 won't wow you, but it is a 3BR/2 bath for under $800K.  Closed for $798K, or less than $700K/sqft.

Right on Classon, between Prospect Heights and Crown Heights, more value was to be had at 524 St. Johns Place, #2A.  This corner 2BR/1 bath is a mere 750 sqft, but $866/sqft still has it closing at a mere $655K.  Not as nice a building, but a good value compared to the rising prices around the corner at 475 Sterling Place.

Heck, back in the Slope, you gotta pay more than this for a 1BR!  882 Union Street, #4D sold for $695K, basically $1,000/sqft.

Or, treck out to South Slope where the condos still go for over a million when they wanna.  Buyers from midtown Manhattan took down 349 16th Street, #5.  This stunning little duplex listed for $1.05M and sold for $1.24M.  That's more than we paid for a 3-Family in Crown Heights!  "3 private terraces!", very low common charges, and almost $1,500/sqft.

Clinton Hill Co-op in Contract: 300 Clinton Avenue, #3

As the NYTimes tweeted, "Not enough multimillion-dollar condos in NYC to meet demand."  In a building on the Upper East Side, "11 of the 14 apartments were in contract at prices starting at $10 million."  That's our city, y'all.  So million dollar condos popping up all over Brooklyn should be no surprise.  A broker in Williamsburg told us yesterday that decent condo product over there starts at $1,200/sqft, and can command $1,500/sqft.  Even as numbers reach new heights, brownstone Brooklyn still trades at a steep discount to that.  The $1,000/sqft x 1,000 sqft = 1 million dollar condo equation has become pretty standard.  Some apartment deals on beautiful blocks are still being done below $900K.  Platinum Members put a nifty little apartment in contract this week at 300 Clinton Avenue, #3.

When you mix the original details of an 1889 house with upgraded kitchens and baths, you get something the Williamsburg heads could only dream of...

Did somebody say huge private deck with skyline views?

 

If you want brownstone charm and condo chic, this is it.  At some ~$900/sqft, this is value all day long.  And the unique co-op ownership structure in this building means more equity for each owner than meets the eye at first glance.  Okay, so the detail's not as sick as neighbor 338 Clinton Avenue, but those are pricier and long-gone.  Duck the bidding war at 130 St. Marks Place, and ride with BK to the Fullest.  Tomorrow we'll take a look at the condo game throughout Brooklyn in Closings of Note.


Pro's:  totally sweet floor-thru apartment in a gorgeous old building, relative value, huge private deck, more equity than initially meets the eye

Con's:  gone already, some prefer condos to co-ops, maintenance is no joke, not quite a full-fledged 2BR

Ideally:  forget the unicorn hunt for the million dollar fixer-upper townhouse in Clinton Hill, this is one of the best buys in the area under $900K.