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July 17, 2008

House of the Day: 228 Washington Avenue

228-Washington-Avenue-0708.jpg
This corner brownstone at 228 Washington Avenue in Clinton Hill just hit the market with the eye-catching price of $1,260,000. Compared to the prices we've become accustomed to seeing in the past couple of years, this seemed incredibly low at first glance. Then we realized that it's chopped up into five units and will need a serious reno to convert it to a one- or two-family residence and the price made a lot more sense. We still think this is a pretty interesting deal, more likely as a condo play than a family residence. The two-car garage at the rear only sweetens the pot.
228 Washington Avenue [Massey Knakal] GMAP P*Shark




Posted by Brownstoner at 1:25 PM | Comments (31)
Categories: Clinton Hill, HOTD

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Comments

Love the photo of the gas meters...

Posted by: denton at July 17, 2008 1:50 PM

I say a bargain and priced too low(unless there is some major structural issue).. Plenty of customers looking for duplex plus rentals which this has already.....plus garage.
Rent roll looks good. Taxes are high though.

Posted by: Petebklyn at July 17, 2008 1:50 PM

Bidding war declared.

Posted by: DOW8000SP800 at July 17, 2008 2:02 PM

As an investment property...makes NO sense.

As an end user property...makes PERFECT sense (after you get the vacancies).

Posted by: greenscam at July 17, 2008 2:08 PM

Knock down those garages and make a nice old-red brick walled garden with espallier peach trees.

Posted by: dittoburg at July 17, 2008 2:11 PM

It's stoopless, aint it?

Posted by: DOW8000SP800 at July 17, 2008 2:15 PM

That's a ridiculously good deal on a number of levels.

Posted by: wasder at July 17, 2008 2:23 PM

'Knock down those garages and make a nice old-red brick walled garden with espallier peach trees'

Are you kidding me. A guarenteed parking spot in Brooklyn is Gold!

Knock down one garage or create a terrace on top of them.

Posted by: bayridgegirl at July 17, 2008 2:23 PM

Duplex is rent stabilized at $1700. . .a month.
That is a big deal breaker. . .if they can deliver that apartment empty it's another story.

Posted by: ontheparkway at July 17, 2008 2:23 PM

oh, foolish me. I read the rent roll as just for the 4 studios and not the duplex.
So THAT is the catch (rent stab/occupied duplex) and reason for the price. Oh well.

Posted by: Petebklyn at July 17, 2008 2:28 PM

Add another half a million dollars for litigation and buyout costs to get the tenant out of the "owners" duplex.
If you're lucky, it will take two years.

Posted by: sam at July 17, 2008 2:28 PM

maybe its just me, but i still think this is expensive considering the financial "issues" of late. If the rent stablization is also true, it's not even close.

Maybe an end user can cancel the lease and claim it will be a primary residence. Still, that will be somewhere between exceedingly annoying and impossible. Anyone know how old the tenants are?

Posted by: slick at July 17, 2008 2:29 PM

I also wrote my "ridiculously good deal" comment before noting the rent stabilized duplex. Delivered vacant this is a great deal but I don't pretend to know the ins and outs of getting tenants out. Great neighborhood and a fantastic corner lot though make this an intriguing property.

Posted by: wasder at July 17, 2008 2:33 PM

I don't find it a problem to park in this area.

Posted by: dittoburg at July 17, 2008 2:37 PM

Ditto, ditto. I keep a car in Clinton Hill and its super easy for street parking.

Posted by: wasder at July 17, 2008 2:40 PM

It actually has a CO for 7 units. Also buyers need to be aware that anything classified 2B like this one will be subject to an assessed value at 45% of market value (not 6% for 1-2 units) and the taxes will continue to rise until they are 12% of the assessed value...12% of 45% of $1.26 MM will eventually be $68,000. The economics don't work then and harder to sell down the road as those taxes rise astronomically.

Posted by: daveinbedstuy at July 17, 2008 2:47 PM

$1.2m initially sounded VERY cheap to me too, but rent stabilized at $1700 is a total deal breaker. It is hard enough to get non-stabilized tenants out if they don't want to move.

Posted by: Lisa FG at July 17, 2008 2:51 PM

daveinbedstuy -

Maximum permissible increase in assesment is 8 percent a year or 30 percent in 5 years, right? If so it would take 40 years before the assessment could go up enough for the tax to be 68k.

Also, I believe DOF estimates market value for this tax class based on rental income, in which case it doesn't matter if it sold for $ 1.26 MM. Taxes would depend on the rental income and the cap rate by DOF.

Posted by: Bklnite at July 17, 2008 3:22 PM

How much does a replacement cornice cost?

Posted by: dittoburg at July 17, 2008 4:14 PM

No interior pictures, except the basement? Bad, bad sign.

Posted by: 11233 at July 17, 2008 4:55 PM

wow! a few of those leases go until November 2010! But there isn't any lease info on the Duplex...that seems like it would be vacant but where do the owner's live (the basement?) I've read that if you are just turning the place into a 1 family then maybe getting tenants out isn't that hard to do...but the place seems more like a business venture for a landlord then a home for potential income...and if you could get out the tenants and do a decent renovation for about 200K it could be worth it in the long run....

Posted by: BSandCHBorderBaby at July 17, 2008 4:57 PM

Is it legal to convert the garage to housing OR build housing on top of the garage (in Brooklyn)?

Posted by: jab287 at July 17, 2008 5:14 PM

jab287, A great use of those garages is a nice roof deck for the owner

Posted by: denton at July 17, 2008 5:29 PM

Wow I was totally fooled and even left the broker a message before the above posts about rent stabilized tenants. Oh well if those tenants occupy the duplex then this is not worth even $900000 IMHO...too much hassle believe me.

Posted by: pierre de taille at July 17, 2008 5:33 PM

denton & jab287 what use is a garage or roof deck if you can't live in your own house? Remember RS tenants basically own the place...only you are responsible for maintaining it...sucks big time but that is NYC. Oh and about converting to 1 family, it will still not be easy...remember the NYT article about West village house.....sorry folks but I would look elsewhere..

Posted by: pierre de taille at July 17, 2008 5:40 PM

Converting garages and building on all depends on FAR and Zoning. In most cases especially in residential, you can't build to your lot line. And you need a certain amount of rear yard, or rear setback. It's very complicated. You'd have to do a zoning analysis.

Even if you're turning it into a 1-family, you have to honor the leases. When lease is up, you start eviction. It's a very time consuming process. The house better be worth the headache.

Posted by: bayridgegirl at July 17, 2008 5:42 PM

Sorry, I'm a bit new to this so I didn't quite get all the nuances of the above posts. I'm hoping to hear your collective wisdom on this:

1. Can't landlords move into the duplex unit if they will indeed reside there as their primary residence?

2. How did y'all get details about how much the rent was for each of the units? All I got was a total monthly gross of $5416

3. Was there a consensus on how much the property tax would increase over time?

Thanks for your feedback.

Posted by: renternotowner at July 17, 2008 6:34 PM

Hey Rent!

Go to website for the Washington place, scroll down and go to the Documents:Setup (pdf) file. That gives you the down low on the property!

Posted by: BSandCHBorderBaby at July 17, 2008 7:18 PM

This is ridiculous, the idea that a firm like MK would be hawking this property without coming out and saying on the top line "owner's duplex occupied by rent-regulated tenant" is sleazy.
The money that would be needed to bring this exploited and mistreated little building up to First World standards, and the money (and also wear and tear on one's arteries) that would be required to remove tenants without leases, is one of those weird throw-back to the Soviet system that survives only in NYC.
This is a good investment for someone like Tony Soprano, who could make a "convincing argument" to the tenants to leave forthwith or sleep with the fishes. Alas that is what the NYC rent laws encourage.
Shameful, but what can one do? I steer clear and live my good life away from housing court and rent control court and the Brooklyn version of the Kremlin and the Cosa Nostra. I learned that sometime after my curriculum at St.Paul's and Yale.
Cheers!

Posted by: Gary Cooper at July 17, 2008 11:04 PM

But can't a rent stabilized lease be not renewed if you need the space for your family? Yes, it might be hard to believe that one is planning on turing an entire apartment building into a one-family house, but taking over a duplex is another matter. Sounds possible to me.

Posted by: babs at July 18, 2008 11:55 AM

However, because the CofO is for 7 units it would be considered a commercial property for financing purposes, which means at least 25% down and a higher interest rate.

Posted by: babs at July 18, 2008 11:56 AM

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