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May 18, 2009

Co-op of the Day: 100 Remsen Street, #8K

This one-bedroom at 100 Remsen Street in Brooklyn Heights has just changed broker directions. After buying the 750-square-foot apartment in May of 2007 for $430,000, the current owner put the place on the market in April for $525,000 for a month before yanking the listing; two weeks later, it popped back up with Corcoran asking $499,000. This place isn't for someone whose obsessed with things like plaster crown moldings and six-panel doors, but it's a fairly-sized unit in good shape with nice windows. What do you think this ends up going for?
100 Remsen Street, #8K [Corcoran] GMAP P*Shark

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This is a perfect place for a creative professional.

Posted by: tybur6 at May 18, 2009 12:45 PM

perfect for a creative professional with an extra $1200/month to pay the very high maintenance! Take 10% off and it moves at $440K

Posted by: Squattersrights at May 18, 2009 12:49 PM

How much would the maintenance typically run if it didn't include all utilities?

Posted by: InsertSnappyNameHere at May 18, 2009 12:52 PM

Maintenance is insane. It should be around $750/month at most, and even that'd be pretty crazy. There's no way, if you take utils out, that they would add up to $~500/month. I have a bigger place with multiple computers running full-time and don't spend anywhere NEAR that much on electricity/gas/etc.

This person bought at the absolute peak of the bubble. They should be happy if they manage to get the $430k they spent.

Posted by: cwbuecheler at May 18, 2009 12:55 PM

You'd better be pretty damn creative to afford $3,600 a month. And to have a $100k (plus) in your pocket means you've been extremely creative for a while... or your daddy is.

This coop make it clear why the creative professional are flocking to Brooklyn. Oh, and the co-op board doesn't just dig your oboe playing, they want you to join the house band!

Posted by: tybur6 at May 18, 2009 12:58 PM

actually, now that I consider it further, they would be lucky to get $400K--there is no way it should presently get May 2007 prices

Posted by: Squattersrights at May 18, 2009 12:59 PM

Think the place looks pleasant. Good sized rooms (lol at the converted closet 'home office tho'). It's on a beautiful block.
High maintenance probably because of high RE taxes - very common and very big problem with a lot of BH co-op buildings.
Deductibility % of maintenance is not given in the listing, so can't assume anything about underlying building mortgage.
No idea of fair value on this one, but I know that two bedroom apts in BH seem to be selling - I saw several in late Feb and almost all in contract now.

Posted by: etson at May 18, 2009 1:09 PM

Nice layout, great light, but the maintenance, as others have said, is a dealbreaker.

Posted by: SnarkSlope at May 18, 2009 1:10 PM

I think they were trying to rent out this unit, or a similar unit on this floor. Saw it and found the building pretty charmless and wouldn't want to be paying more than $2800 all in, wherever that puts the price after almost $1200/month maintenance.

Posted by: CG_ups at May 18, 2009 1:11 PM

Really nice sized One-Bedroom apt.
Maintenance is Sky High but maybe it's to cover the:
"Enjoy the stunning views of Manhattan Skyline and East River from its' Western exposure."

Posted by: bayridgegirl at May 18, 2009 1:15 PM

CG_ups -- that puts the price at about $325,000 (including a 20% downpayment and the maintenance)

Posted by: tybur6 at May 18, 2009 1:15 PM

Or a 35% discount off $499,000

Posted by: tybur6 at May 18, 2009 1:16 PM

You can rent a nice 750 sq ft one bedroom in my old building in manhattan (54 & Lex) for $2,000-2,500.

Posted by: daveinbedstuy at May 18, 2009 1:17 PM

Odd that the pictures don't actually show the stunning views. Only thing I see is what appears to be a cistern across the way. Woo hoo.

I'm getting tired of saying it, but I think it's way overpriced. But that's assuming the price should reflect what a willing buyer would give a willing seller. Realistically, this is just going to sit on the market for a while and then disappear, right? Where's the fun in that?

Posted by: toadie at May 18, 2009 1:21 PM

tyburg6--are you including the mortgage tax deduction in your $325,000 figure?

Posted by: Squattersrights at May 18, 2009 1:22 PM

While the apartment is ok, this building and the one next to it are two of the least charming buildings in the neighbourhood. It's a shame they were ever built. I wouldn't want to come home to it every day.

Posted by: Biff Champion at May 18, 2009 1:22 PM

Nice. And price seems not crazy .. . except that maintenance.

Posted by: Nomi at May 18, 2009 1:23 PM

Including mortgage-tax deductions in monthly-cost figurings is a bad idea. You don't pay your mortgage tax monthly. Deductions should be considered a bonus, not factored into what you can afford by the month.

Posted by: cwbuecheler at May 18, 2009 1:29 PM

The maintenance is way too high, I would want to seriously look at the building's financials before forking over $500,000 for this place. I've been looking at 1BRs in the 600-750 square foot range in Brooklyn Heights, Park Slope, Clinton Hill areas and can attest that the average maintenance seems to be around 700-800. I remember checking out a 1BR in this building a few years ago and the maintenance wasnt nearly that high. Something must have happened.

So while this looks like an awesome apartment, they should be knocking down the price to offset the high maintenance. And please gimme a break with all this "no crown moldings" "not a charming building" crap. Some of us care more about getting acceptable living space with closets and light and a workable kitchen than about crown molding and charming exteriors.

I spend a lot more time in my apartment than I do on the street staring at the building.

Posted by: clintonhillbuyer at May 18, 2009 1:30 PM

How is such a maintenance justified by a buyer?

Unless you're paying quite a bit less for the apartment than straight market value, why would someone ever sign up to throw away $1,000+ a month to maintenance?

I'd rather pay slightly more for an apartment with a lower maintenance. Wouldn't everyone?

Posted by: alsawo at May 18, 2009 1:31 PM

$499K LOL! Good luck with that! If he/she gets $400K for this place I'd be surprised. Can't blame the seller for trying though.

Posted by: qis4quincy at May 18, 2009 1:38 PM

one-bedrooms with high maintenances like this are not selling at any price. He should sublet.

Posted by: sam at May 18, 2009 1:41 PM

Different people are looking for different things, clintonhillbuyer. Personally, I wouldn't want to live in the fugliest building in Brooklyn Heights. If you love the interior and the price, then buy it. But just because you don't care about what it looks like on the outside doesn't mean that other people want to live in a truly barf-y looking building (the lobby and elevator are pretty barf-y as well, feels like a dam hospital elevator).

Posted by: CG_ups at May 18, 2009 1:44 PM

One wonder why the buyer is selling only one year after purchasing.

Posted by: SnarkSlope at May 18, 2009 1:50 PM

CWB - I can't agree more... it's inevitable that someone pipes up with the ol' mortgage payment tax deductions. It's soooooo overblown.

The mortgage deduction comes out of your gross income -- that means it reduces your tax liability on your income. This doesn't necessarily yield a whole lot. It might and you're lucky. Or it doesn't do much.

And what if it works out for you in year 1 and 2, but then something changes in year 3?

Posted by: tybur6 at May 18, 2009 2:12 PM

sure, agreed-you cant assume every year you'd get this benefit---epecially in the later years when paying down the principal but most years early in the mortgage you are essentially paying down only interest so you'll get a nice rebate. Needs to be taken into account.

Posted by: Squattersrights at May 18, 2009 2:18 PM

You need to keep that mtg deduction in mind, it's what paid for my kicthen reno.

Posted by: DeLepp at May 18, 2009 2:24 PM

I don't know why so many people base their current value of an apt on what the owner paid. What if he got a great deal? What if he got a lousy deal? What if he dumped $75K in reno's? I think the original price is a non-factor when determining current price.
That said, that crazy maintenance will make this tough to sell.

Posted by: broadwayron at May 18, 2009 2:35 PM

I've been in the K line in 100 Remsen. Good use of space; don't think it's quite 750 sf, though...more like 700 or a bit under. It's a very well maintained building, but yes, the maint. is too high for this ask. No, not a lot of charm, but if you like original casement windows, these actually work and keep out most of the drafts...

Posted by: Bolder at May 18, 2009 2:43 PM

The tax deduction is "overblown"? That's like saying math is overrated. Whether or not it comes out of your total tax liabilty, it's still money you don't get if you're renting, and it's easy to calculate how much it will benefit you. Why would you not factor it into the cost of owning?

Posted by: squaredrive at May 18, 2009 2:51 PM

Keeping the mortgage deduction in mind is absolutely valuable. Applying it to your monthly cost is not.

That was the point I was trying to make. You don't GET that deduction monthly, so you shouldn't apply it monthly. Let's say you save $4800 in mortgage deduction per year (totally arbitrary number). That does NOT mean you're saving $400/month.

Basically, the mortgage deduction should not factor in when determining if you can afford a house or not. If you can't make the monthly payment, it doesn't matter how much you're getting back at the end of the year.

Posted by: cwbuecheler at May 18, 2009 2:56 PM

"If you can't make the monthly payment, it doesn't matter how much you're getting back at the end of the year."

Definitely agree on that point!

Posted by: squaredrive at May 18, 2009 3:08 PM

Isn't this the building with the ground lease? I think I saw apartments here in 2002 or so and the ground lease was due to expire.

Posted by: bessie2 at May 18, 2009 3:21 PM

bessie2:

I'm sure thats part of the problem here...I looked at a place in here maybe 2 or 3 years ago and the maint was much, much more reasonable. I'm surprised people on this blog dont recognize ground lease issues very often...maybe it isnt as much of a problem in BKLYN as opposed to Manhattan. My parents owned a co-op on the Upper East Side for 25 years and sold just before the ground lease on the building expired and maintenence seriously went up well over 150% in many cases. People who didnt get out have lost upwards of 30-40% of the value in their apartments. Its a big issue that people should watch out for!!!

Posted by: clintonhillbuyer at May 18, 2009 3:57 PM

Went with my friend to one-bedroom open houses on the UWS yesterday. We saw some comparable one-bedrooms for about this. No way anything in brooklyn should be priced in line with the UWS. You can do much better rentwise - which is smart if you are looking at one-bedrooms (most people who can afford this are at a point in their life that they will need to upgrade within a few years, in which case buying is not the bext idea)

Oh yes, as to mortgage deduction - unless you are living paycheck to paycheck (in which case you shouldnt be spending this much in this market), you most certainly should count the deduction in your overall monthly payment. Anyone spending this much should have at least a year (preferably two-years) worth of mortgage and maintenace socked away after purchase - in which case you are looking at your annual payments, amortized over a year. Mortgage deduction included. Smart financial planning looks at the entire year for all payments and credits ((insurance, repairs etc etc) even if those payments or credits are realized at the end of the year.

Posted by: saminthehood at May 18, 2009 4:02 PM

cwbuelcher,

the mortgage deduction can most definitely impact monthly payments. You just have to calculate it into your federal allowances on your W-4 so that you get a certain amount more per month and break even on your taxes at the end of the year. No big rebate, but more money month-to-month.

Posted by: collin85 at May 18, 2009 4:42 PM

I don't know many home owners personally, anywhere, that have two years worth of mortgage payments sitting in the bank. Most of the people I know shoot for ~4 months of living expenses in savings and a lot of them aren't always able to make that.

Maybe that's how you do it if you're rich ... but most people aren't rich.

And it's all well and good to say "well, don't buy then" but that's kind of a mixed message when places like this are often billed as entry-level or starter apartments.

Posted by: cwbuecheler at May 18, 2009 4:43 PM

collin85 -

I still think you're better off going the safe route and buying something that you can afford on a monthly basis even assuming you weren't able to deduct a penny of it.

Posted by: cwbuecheler at May 18, 2009 4:47 PM

cwcuelcher - that's definitely true...one shouldn't depend on the mortgage deduction to factor into affordability, but I was just pointing out that the deduction can have substantial month-to-month benefits.

But all in all...yes, I'd be willing to bet that those who counted too much on mortgage deductions to meet payments are the very ones who are in trouble now.

Posted by: collin85 at May 18, 2009 5:02 PM

I totally agree with CWB's approach - far better to play it safe and be rewarded in the end. The fancier the numbers game, the more likely it will be screwed up.

Posted by: sixyearsandcounting at May 18, 2009 5:14 PM

Yes Bessie2, it is the building with the ground lease. A risky purchase...

Posted by: punko at May 18, 2009 9:58 PM

Colin85 is right on. You just adjust your withholding so you have more money in your pocket. The mort. deduction is absolutely a "known known". Now, it does go down as you start paying off the principal, of course, but for the first 5 years or more it's a considerable amount. For us, with a 525k mortgage, it was about $700 a month last year.

CWB is also correct. It took a lot of self control, but we ignored the deduction in figuring what we could afford--but I can tell you after draining our savings to make a bigger dp, we sure looked forward to that IRS envelope this year.

Posted by: Bolder at May 18, 2009 11:19 PM

With all due respect guys, someone buying a $500,000 place is facing a $2800-$3000 monthly payment - a full-year of monthly payments is only $35,000 in savings. Frankly, someone who doesnt have at least that shouldnt be buying a half-million dollar property - THAT is why we are in the mess we are in. It shocks me to no end seeing so many people I know - smart, educated professionals - who practically live paycheck to paycheck, and spend over 50% of their net on their home. I just find it insane that someone puts 95% of their savings on a down payment. The bubble years made it doable, but in a normal market, thats just stupid financial planning (or non-planning).

Posted by: saminthehood at May 19, 2009 12:05 AM

BUYER BEWARE! My family had made an offer on this apartment several weeks ago when I stumbled across this discussion chain, so I raised a red flag and looked into the land lease situation. It turns out that what the building actually has is a "lease hold," which gives the owners of the apartments in the building even fewer rights/less control than would a land lease. We discussed this with a longtime tenant in the building and were strongly cautioned to steer clear. Given the availability of other units at this price in this neighborhood, it just doesn't seem worth the risk at all. You'd pretty much have to buy hoping that a next potential buyer wouldn't figure all this out before it was too late.

Posted by: benewagain at June 9, 2009 2:35 AM

First, wow I think 52/54/62 is the ugliest building in Bk Heights but it's all a matter of opinion isn't it? I mean a building that looks smacked together and barely standing up, how can that compare with 100 Remsen which has trees & other grounds but for some reason you all seem to want to hate on this building. I have friends who live there and been in it many times, it's very well kept with a doorman and live-in super.

Second, you have to wonder what a long term tenant would gain by talking you out of a bid. Benewagain it's a legal duty to disclose the land lease details so seriously, why are you trying to imply the sellers are super shady? Messing with another person's bank account is so very Madoff of you. You are clearly a first time buyer.

Does anyone seem to realize there are millions of reasons to sell ie. hello it's a recession, maybe someone wants to have a baby and a 1 bdrm isn't going to cut it, or maybe someone in their family is ill and they have to move home to be a caretaker?

Posted by: yeahyeah at August 13, 2009 7:26 PM

« Clermont Greene Gets Its C of O House of the Day: 207 Fenimore Street »

May 18, 2009

Co-op of the Day: 100 Remsen Street, #8K

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