Open House in Crown Heights: 1332 Lincoln Place

Multiple reports came in yesterday of long lines outside Corcoran open houses in Brooklyn in the cold for fixer-uppers well over a million.  Eek!  So much for "the spring buying season".  This Sunday, there's an open house for this nice little play at 1332 Lincoln Place, listed under $500K.  Local broker Celeste Moses knows her stuff and has brought us incredible underground leads, such as 583 Lincoln Place.  Now she's got an open house from 1:30pm - 2:30pm on this affordable play in east Crown Heights that's around the corner from 3/4/5 trains.  This small 2-Family is probably best used as a 1, but the price makes that do-able for even the multi-family purchasers.

We get just a sneak peak inside to see nice floors and moldings...

But with an open house, it's easy to come check out the rest!  Especially in a climate with 1148 Sterling Place reportedly with cash offers, this is where you've gotta go for affordability these days.


Pro's:  a house with details and a yard for under $500K, around the corner from great transportation

Con's:  small, pretty deep in Crown Heights, how much TLC is needed?

Ideally:  a great look at a bite more people can chew

Topics: Parents Just Don't Understand

We're always trying to put Brooklyn's boom in perspective for people because, in some ways, it's a pretty shocking phenomenon making new leaps & bounds what seems like everyday.  Yet it other ways it's a total no-brainer that's chugging along proportionally to everything else that's going on.

Imagine our surprise writing that first rent check of over $750/BR for something the size of a closet in a 3BR share in the hood 10 years ago.  Just a few years later, brownstones in that hood were pushing $2M.  When each floor rents for more than the mortgage on a $500K loan, and you've got 4 of those floors... well, you do the math.  If you've ever spent time searching in the $700K condo game in the coveted areas of Brooklyn, you might have a sense of how hard it is to find even one floor for $700K.  So what's with the shock & awe when 4 floors of what's easily $700K per floor amounts to $2M or more for the entire building?

Once upon a time, not even 15 years ago, families all over the country crowded around ~$600 Trinitron televisions and considered that pretty decent technology.  Yet within a decade, people were spending $2,000+ on flatscreen TV's, and the entire fam' (down to the 12 year old niece!) had $600+ phones in their pockets.  We went from one $600 TV for the whole family to a collection of $600 phones for the whole family.  So it's no surprise that companies making those $600 phones like Apple starting making crazy money.  So much so that it was recently reported that Apple's iPhone business alone surpassed the entire revenue of Microsoft:

Apple's stock price seemed high to some when it was in the $200's before and after the crash.  It sits above $500 today (and has been much higher).  Yet, even at those levels, its p/e ratio is still an extremely modest 11-12 times earnings.  Compare that to Amazon, a "cheaper" stock than Apple by share price at some $260+, but with a p/e of over 3,000 times earnings.  If Apple stock was trading at the same p/e as Amazon, one share of Apple would cost $150,000 instead of $500.

"What does any of this have to do with Brooklyn?" you might ask.  Well, accordingly, if only a handful of years ago rentals could still be found in Bed-Stuy and Crown Heights for $500-$600/BR, and those numbers have doubled for renters... just guess what the sales prices have done?  Have they doubled?  Not quite.  But that wouldn't've been any surprise.  In that climate, how steep is the leap from a $750K purchase price to $1M, or even $1M to $1.25M, when $250K financed at prevailing rates is barely over $1,000 more a month on your loan?  Which is why it's a little odd to still wake up to e-mails everyday from folks making tens of thousands of dollars a month, boldly telling us what's too expensive in Brooklyn.  People casually hate on and refuse to pay market prices for houses that cost less than their year-end bonuses.  We're still moving 4-story brick & brownstone townhomes for under $1.5M (sometimes half that) in neighborhoods with escalating rents and plenty of gentrification room to run.  And that's all for the price of a dinky condo in Manhattan - or even just condos in "better" parts of Brooklyn.   Just some food for thought.

Closed Yesterday: 1502 Bedford Avenue

We told you about the year end push to close deals before the New Year for tax purposes, whether perceived or actual.  And that momentum has continued into 2013, with deals that were flapping in the wings for a long time finally closing if not before New Year's, then soon after.  1502 Bedford Avenue is an enormous corner 8-Family in Crown Heights on Platinum Member radar for months.  Weighing in at a monster 29' x 92', we're talking over 10,000 sqft of prime rental income potential.  Have you tried getting a decent 3BR rental over here recently?  We've heard tell of people having a hard time finding 3BR's for $3,000 near Franklin Avenue in Crown Heights.  What's a one avenue walk east to a boss?

They were asking a not-too-lofty $2.5M, which probably threw many people off who didn't get the memo on the past 2-3 years of next-level gentrification in Brooklyn.  Only problem was, the broker barely marketing the thing properly wasn't bringing a good offer.  Probably because he was impossible to track down and he wasn't marketing the building properly.  When we finally got him on the horn, he threw us off the trail a bit saying that the owners weren't listing anymore.  We can't verify if that's what the owner actually told that broker, but we got in touch with a commercial broker who has her finger on the pulse of these and many other underground deals in this territory, including Clinton Hill and Crown Heights.  Daisy Okas at the firm Besen & Associates was direct to this owner and could've made the deal happen for us.  Only, we didn't compare notes on it soon enough.  Daisy has brought Platinum Members many leads on pre-market and off-market opportunities.  She brought us the development site deal pre-market at 840 Fulton Street, long before Massey Knakal got their hands on an exclusive.

As we've seen, some of the best deals happen off-market.  Some will never hit the open market, but can still be accessed.  Others can be intercepted before they reach the open market.  And some fall off people's radar, as 1502 Bedford did, but can still be accessed if you know where to look.

Pro's:  curb appeal, size, corner property, 3BR rentals, great location as Crown Heights goes

Con's:  gone already, half-baked listing, "well-over $2M"

Ideally:  gotta be tenacious when you chase these leads, and having contacts on the inside always helps

Closings of Note: Year End Push Continues

Sure, 2012 might be long gone, but the closings are still pouring in.  We've told ya for the longest that comps are a lagging indicator.  Some homes take as long as a year to close, for various reasons.  And the sales aren't usually recorded publicly until some weeks after that.  So if you're hitching yourself to those numbers negotiated months & months ago, you're gonna be behind the curve.  Crown Heights takes the cake again this week with killer closings that are some of the best values in town.  This corner house with sick interior details at 120 Brooklyn Avenue is no exception.  A straight-up mansion for the price of a Park Slope condo?  On Platinum Member radar for months, this house joins many other mansions we've been screaming about in this neighb' for well over a year now.  Grainy pics aside, this thing is a winner.  Just peek inside:

The house is a monster 42' x 40' on a lot with a little extra space for greenery.  "Who would pay $1.2M for this?" you might ask.  Why, none other than somebody who's already moving their 17' wide 3 story brick house in Prospect Heights for closer to $2M.  If that doesn't show ya where the market's heading, we don't know what does.  $1.2M may sound high for Crown Heights to the untrained ear now, but this buyer copped the best house on the block forever.  While people are losing their minds over what passes for $1.1M - $1.3M these days in Bed-Stuy, a unique piece like this is another Crown Heights crown jewel.  This is Crown Heights' pre-renovated answer to what passes for $2.2M in borderline Bed-Stuy.   Just like another under-marketed gem in Crown Heights at 871 St. Marks Avenue, this sale is another shot across the bow that it's okay to drop $1.2M on a mansion in what some still think of as the hood.  It's a pretty good bet that the next round of houses that want $1.2M won't be nearly this sweet.  Can you imagine what Corcoran could've gotten for this house if they gave it a proper listing and the 261 Hancock treatment?  Stick with BK to the Fullest and we'll get you into another underground turnkey beauty on this block that's still well south of $1M.

For a killer rental income investment in this same stretch, look no further than 60 New York Avenue, a ginormous 30' x 70' limestone 8-Family that just sold in an estate sale for the great price of $925K.  Platinum Members are scoping an 8-Family estate sale this size in prime Park Slope at an equally choice price.

For this same kind of money, maybe you'd prefer a condo in Fort Greene.  Get ready for the new pricepoints at the Toren.  Unit #3606 just sold for $1.18M.

One broker tried to tell us that, adjusted for inflation, NYC real estate prices are stagnant over the past 120 years.  Hmm.  Well, if you needed anymore of a glimpse into what prices have done in our lifetimes since the lulls of the post-crash dip in 2008-2010, check 49 Douglass Street, which we covered back in 2010 when it sold for $1.5M with less than $400K down.  This 25' wide Boerum Hill 4-Family just sold last month for $2.925M.  Not a bad return on your investment in just a few years.

And don't think for a second that 49 Douglass Street pushing $3M is some BoCoCa pricing outlier.  Skip on over to 380 Degraw Street, which Brownstoner asked, "What do you think of it for $3,475,000?"  The answer?  While commenters hemmed and hawed from the sidelines, it sold for asking price last month.  Like Jay-Z says, "We can talk, but money talk, so talk mo' bucks."  Don't look now, but even the 20' x 38' 232 Baltic Street over here just sold for $2.8M as an estate sale too.

If you want a WAY better deal, hop on over to Bed-Stuy.  Just like Crown Heights, this "emerging neighborhood" has trains and brownstones like the most coveted neighborhoods, but some lagging commercial for some people's taste.  Also, for some, there's the "aura of danger" as one out-gentrified man wrote about Fort Greene for the NY Times in 2009, that - once it leaves - the neighborhood's "many charms can no longer be hidden".  258 Jefferson Avenue sat at $1.1M for a while, back & forth'd, then it closed last month for $999K, just under the number where the "mansion tax" kicks in.  This is a good look at the quintessential 4-Family.  There are a few buys just as good as this still dangling in the wind now for those with the funds, the vision, and the guts to take 'em down.

Crown Heights has another townhouse deal at condo prices?  Say it ain't so.  1114 Prospect Place - even as a 16' wide 3-story that's pretty far east - is another deal for the area.  Even sailing a bit above its asking price, this is a good look.  An extra-deep yard with a renovation, it closed at the end of November 2012 for $714K.  Platinum Members are picking up a 4-story in an even better Crown Heights location for this same price.  If that search for a turnkey house under $700K west of Bedford has proven a little tough for ya, this should be more evidence of why. 

And, finally, from "the sky is falling" report, this 3-story 2-Family by the highway in Bay Ridge at 805 73rd Street closed in an estate sale last month for $740K.  Part of the reason why a 2-Family in prime brownstone Brooklyn is - and will only become increasingly - hard(er) to find.  Don't say we didn't warn ya!

Closings of Note: Year End Push

 
We take a week off and a bunch of noteworthy sales are already pouring in.  So much to catch up on.  The NY Times wasn't kidding when they reported last month that there was "a mad dash to avoid a bigger tax bite" that motivated sellers to get deals done before the new year.  It was refreshing to see the feet-dragging that makes real estate closings take months suddenly get a jolt to the system.  Some brokers told us they thought the rush was silly because they didn't think taxes would actually go up, but perception is reality if it's motivating people.  Even if the motivation is based on just an expectation, not a sure thing.

102 Pierrepont Street is one of the best looks in Brooklyn Heights in a while.  5 turnkey stories in a location this prime at a way-reasonable price per square foot.  They listed for $3.8M, dropped to $3.5M, and sold for $3M cash.  A great move on a townhouse in a neighborhood where a converted cathedral apartment just down the street in Cobble Hill also just sold for almost $2M.  58 Strong Place, #1A listed for $1.995M and closed for $1.85M:

That's right, $2M for a Cobble Hill condo and $3M for a Brooklyn Heights townhouse.  They're not apples to apples, but it's a little perspective on relative pricepoints.  Although, for an even better buy on the same street, you've gotta dig even deeper...


 

56 Pierrepont Street, a huge 25' x 66' multi-family piece that's over 8,000 sqft, sold off-market for $3.17M last month.

And let's remember that people are buying townhomes in Brooklyn Heights for $5M+ and putting a ton more money into them.  Not to be outdone, the single-family home at 16 Garden Place also just sold for $5.7M.  And it's not the first house in this price range by a long shot.  Take 281 Henry Street, for instance.  It just shows, if you've got the funds, don't be too shy about that $2M-$3M fixer-upper in Brooklyn Heights.  Even the 50' x 100' vacant parking lot at 295 Hicks Street just sold for $4.325M, an absurd price per buildable square foot by all accounts.  Still, don't think this is peak.  As long as you're still hard-pressed to find shells for these prices in the West Village or the Upper West Side, Brooklyn Heights is still (gulp!) a relative bargain.

After hearing the pricepoints in Brooklyn Heights, perhaps a narrow 3-story renovated brick home in south Slope - less than 3 miles away - doesn't sound too pricey anymore.  275 13th Street listed for $1.68M and closed for $1.6M last month.

But you know we think the best deals of all are in Crown Heights!  The huge 4-Family at 489 Park Place breezed to its asking price of $1.3M.  They could condo convert it as-is tomorrow for at least $450K/floor, but we're sure they're more content to do some stylish upgrades and bring in as much as $3,000/month per apartment or more.  Crown Heights continues to have some of the best buys in the past few weeks.  We'll take a look at plenty more closings tomorrow...

Brooklyn 10-Cap: 245 Martense Street

While people are stumbling over unrenovated condos in brownstones in Carroll Gardens in the $900K's, Platinum Members are picking up an entire 8-Family 10-cap on the outskirts of Lefferts Garden, towards East Flatbush, for way less than that.  Just off of a vibrant corridor of Nostrand Avenue, around the corner from the 2 & 5 trains at Church Avenue, not far from Prospect Park, this enormous, well-maintained 25' x 90' brick building has room for way-decent 2BR rentals with original floors and details that are still way affordable at half the current median rent in Brooklyn. 

Much like the limestone monster at 1329 Pacific Street in Crown Heights, 245 Martense Street has unattached sides with plenty of windows for light for legit bedrooms & living room space.

An amazing place as-is, with great potential too.  With rentals at a value pricepoint that are a great alternative to rising prices in prime Crown Heights.  All in a pocket of Brooklyn the New York Times called "an oasis of brownstones and Rastafarian Gear".


Pro's:   size, legit 2BR rentals, around the corner from 2/5 trains, straight-up 10-cap

Con's:  in an area some would consider the outskirts, gone already

Ideally:  a top notch move in Brooklyn

Record-Breaking Brownstone: 333 MacDonough Street

Breaking up is hard to do, but breaking records in Bed-Stuy is easy.  333 MacDonough Street is a 4-story 3-Family on a great block in Bed-Stuy that listed for $1.295M and just sold for a record-breaking $1.34M.  "Lovingly restored" sounds about right...

The listing broker is spot on when she says, "But even at record-breaking prices, the residential property is still a bargain."  When a 3-Family this nice with an owner's duplex, a yard, and two top-notch rentals sells for this kind of price,  the headline may read "record-breaking", but we're still talking about a home that delivers solid income that costs barely $200K over the FHA 3-Family loan limit.

What does $1.34M get you in Park Slope anyways these days?  The broker says this same house would go for 4 times as much in Park Slope, which is a stretch.  Even Jenna's didn't get 4 times this much, but her point is taken.  It's funny that just a year ago people were trigger shy about spending this same price on a 4-story fixer-upper in Park Slope at 27 Park Place, also clearly listed with Corcoran.  Now that pricing's hitting Bed-Stuy for a killer restoration, but should we be surprised?

Let's keep pricing in perspective here.  If someone handed you - free & clear - a 2BR co-op in the West Village that cost $1.34M, the taxes & maintenance fees may be higher than your current rent and cramp your lifestyle.  However, if someone gave you 333 MacDonough Street, you'd get a sweet duplex AND be counting a healthy salary's worth of cash every month in rental income. 

50 people at the first open house on MacDonough?  Yowza!  That means 49 folks still looking for this home's cousin.  When that kind of activity came on cold days in January almost a year ago, the writing was on the wall in Park Slope.  We warned you months ago when the $1.5M's poked across Classon Avenue.  Long before a comp like this even hit the airwaves, long before it even listed, we were bullish on this block at 332 MacDonough and another winner on the same street.

They always ask us, "Is Bed-Stuy a bubble?"  Categorically no!  Granted, in the pre-cash days of 2006 & 2007, flippers were picking up houses in Bed-Stuy merely because they could sell them for more, and many got caught with their pants down.  But things are different today.  Despite the Euro debt crisis that spooked some folks last fall, and the fiscal cliff spooking folks now, rents and sales prices are still relatively soaring throughout brownstone Brooklyn.  The have's really have, interest rates are low, and the rents have arrived.  $2,000/month each for the rentals in this house?  You couldn't charge that in 2006.  Nowadays you sure can, and there's simply nowhere else for this kind of money to go.

Pro's:  curb appeal, great renovation job, owner's duplex & yard, great rentals

Con's:  gone already

Ideally:  don't sleep on Bed-Stuy