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November 23, 2009

House of the Day: 166 Washington Park

The brownstone at 166 Washington Park in Fort Greene has been on the market for at least a year and a half by our count. In that time it's been featured a couple of times as an Open House Pick but never as a House of the Day. Given that it recently underwent its a price cut, bringing the asking price down to $2,199,000, the listing seemed worth revisiting. It's clearly a lovely house in a great location (overlooking Fort Greene Park). Other than the price, the only snag we can see is the configuration (~~two~~ three floor-through rentals over an owner's duplex); nothing inherently wrong with that, but it's not what most family buyers are looking for.
166 Washington Park [Brooklyn Properties] GMAP P*Shark

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This is a lovely row of brownstones. It is good to see that many owners have started to remove the the steel gates from in front of the front doors and security bars from the parlor floor windows.
The first thing one used to see on these blocks was the heavy burglar-proofing.

Posted by: Minard Lafever at November 23, 2009 1:26 PM

Looks like its actually three floor through rentals over a duplex. Definitely not what most family buyers want and not priced attractively enough for a purely investment buy. Nice looking details though and obviously a nice location by the park. Wonder what it will take to get into range for a buyer. 1.75?

Posted by: wasder at November 23, 2009 1:28 PM

one could view this as an option.
figure out the cost of owning the duplex (in a lovely building on a lovely block facing a lovely park) after rentroll pays some of your mortgage.
if you are optimistic about your future earning power and believe prices have stabilized after a nice fall and you can memorialize it in the price you negotiate here, then you can grow into bigger space over time.

some future reno costs but a quad over a rental facing ft greene park at 1.75 might look very attractive in 3-5 years/

Posted by: antidope at November 23, 2009 1:41 PM

is this the place with the kitchens in the living rooms? Where's the floor plan?

Posted by: mopar at November 23, 2009 1:55 PM

I saw the house about a year ago. I'd have to dig back my notes, but from memory I believe I estimated the value renovated at $1.8-1.9M, and that there was at least $200,000 worth of work. That was to keep it as a 4-family. To restore it as a showstopping 1 family would be much more, and although it doesn't show on the picture, there are a couple issues: 1- the house immediately to the left is the last of the row of italianate brownstones, after that, there are brick mixed-use buildings to Myrtle; 2- the house is sandwiched between 2 houses in worse shape than this one, including a rental building that has lost its stoop. Is there anything sadder looking than a once-grand brownstone without its stoop? It looked completely humiliated.
It suffers from the same affliction as that truly beautiful house on Washington ave. that was on the Clinton Hill tour: too close to Myrtle. One block south and it would be a cinch.

Posted by: Maly at November 23, 2009 1:58 PM

To play off antidope above, we're talking about $10,000 a month for the mortgage payment. So, this is a really tough sell for a 4-unit property. Don't know how you'd make that work... without taking on considerable annual deficits for a long time.

Posted by: tybur6 at November 23, 2009 2:12 PM

agreed maly. i thought it was closer to willoughby/dekalb. reno costs wouldn't scare me too much if i got the right price.

separately, how much rental income would top 3 floors produce?

Posted by: antidope at November 23, 2009 2:12 PM

Why does Brooklyn Properties still not post floorplans? They have the same damn web site setup they did 8 years ago.

I think needs to be closer to $1.6m for it to make financial sense as a duplex + landlord duties or to be renovated as an awesome 1 family.

Posted by: Brokedeveloper at November 23, 2009 2:17 PM

Have to think the floor throughs would rent for 1700-2000 per so that would generate about 5000-6000 worth of rental income a month.

Posted by: wasder at November 23, 2009 2:18 PM

"[Next door is a] building that has lost its stoop. Is there anything sadder looking than a once-grand brownstone without its stoop? It looked completely humiliated."

Posted by: Maly at November 23, 2009 1:58 PM

Very well put, Maly.
Funny anthropomorphic take on the once-popular sad practice of de-stooping.

Posted by: Pigeon at November 23, 2009 2:29 PM

Wasder -- so that means we're pretty far off from $2 million to make any sense whatsoever? Unless you enjoy "subsidizing" your renters. (Though it's not really subsidizing your renters -- it's just paying waaaay too much for your unit!)

Posted by: tybur6 at November 23, 2009 2:30 PM

"I think needs to be closer to $1.6m for it to make financial sense as a duplex + landlord duties or to be renovated as an awesome 1 family."

That's what I was thinking as a ceiling, BD. I'd say $1.4 - $1.6 range depending on rent roll and work that needs to be done.

Posted by: CarrollGardened at November 23, 2009 2:48 PM

tybur--agreed. this would have to come pretty far down from 2 million to make much sense economically for a buyer like myself who wanted a multifam house with owner's duplex. my rental income knocks out 3/4 of my mortgage each month, leaving me with a monthly nut smaller than the one I had when I had a 650 sqf 2 bedroom co-op. This house would not work like that unless you didn't mind paying 4G a month to live in the owner's duplex.

Posted by: wasder at November 23, 2009 2:50 PM

this could fetch more.
at 5000 rr, the monthly payment is about $3000 for a duplex with full basement and backyard in prime (well almost) ft greene. with a free option going forward. well, actually the cost of the option would be your dead 20% dp.

also, rents will go up and your mortgage is fixed so your monthly costs will decline over time.

Posted by: antidope at November 23, 2009 2:54 PM

wouldn't the paper loss (depreciation) on the rental portion
(more than 50%) of house value bring your monthly much lower?
Granted not what most family buyers may be after but forget that most is not all and how many for sales out there have this much rental income with a large duplex (this bldg is 22x45')

Posted by: Petebklyn at November 23, 2009 3:04 PM

Antidope -- how is the mortgage payment on $2 million around $8000?

Also, you have to pay for ALL maintenance and utilities, etc. That's INCLUDED in the rent roll. The net rental income is going to be LESS than the checks you receive... and there's income tax too. No?

(Though I don't want to get into taxes... there always seems to be very creative tax schemes presented on here where a $1 million co-op only costs $500 a month after tax deductions.)

Posted by: tybur6 at November 23, 2009 3:07 PM

"Have to think the floor throughs would rent for 1700-2000 per so that would generate about 5000-6000 worth of rental income a month."
this bldg is 22 x 45' - pretty large floorthroughs.. isn't $2500 each more like it. The pics seem to show pretty good condition

Posted by: Petebklyn at November 23, 2009 3:39 PM

I hope not Pete... but that's just personal, not the market.

Posted by: tybur6 at November 23, 2009 3:42 PM

pete--as you probably know no matter if the house a slightly larger footprint per floor than the average brownstone, these houses don't split up very well into anything but one bedroom floor throughs. If they could make 2 bedrooms out of the rentals then yes you might be able to get 2500 per floor. Otherwise I think you are still in the 1700-2000 range.

Posted by: wasder at November 23, 2009 3:49 PM

2 million bucks to live in a duplex one block from the projects.

Fireplaces don't work, taxes are high, and you still need to deal with the problems of three sets of tenants.

You probably won't be able to move into the whole thing if the state legislature expands rent control, and your taxes are going to go up for 10+years.

Rather expensive to "own" a home.

Posted by: thwackamole1 at November 23, 2009 4:02 PM

There is a 3bedroom for rent on Cumberland (closer to the train) for $2,400, and a floor through 1br down the block closer to deKalb for $1,900. I think you could get $2,500 for the lower floor, and then a bit less as you go up, with a renovation. The rentals weren't fancy enough to command this sort of prices. Anyway, even as a cockeyed optimist, assuming you get $7,000 a month in rental income, the extra taxes, utilities and maintenance will easily add to $2,000/month. So you put down 25% down, spend an extra $200,000 to fix up the rentals and your duplex, and you get to pay $5,000 for the privilege, even though you could rent the same for $3,000 and still have $800,000 in your pocket? That's not even accounting for the inevitable empty apartment, emergency repairs and the much-needed therapy to deal with anger management issues stemming from being a landlord.
It really doesn't make sense, in a declining real estate market, even for an optimist.

Posted by: Maly at November 23, 2009 4:11 PM

taxes are about $400 month, utilities--guess $500, insurance guess $250, repairs.supplies $600? ---I say $1750 per month.
And you think you could rent a nice size duplex with yard across from park for $3000 a month...are prizes so cheap in Ft Greene?
I think showing loss on rental portion is going to give someone with decent income quite a write-off. Brings taxable income down quite a bit and I wouldn't be surprised cash flow end of year down to $2000 per month or less for nice duplex. Yes, worked involved, but over time could be excellent investment.

Posted by: Petebklyn at November 23, 2009 4:46 PM

"if the state legislature expands rent control"???

Do you know something that others don't? Expansion of rent stabilization or rent control (at least in context of adding new buildings to the rolls) does not seem very likely, but if you have heard differntly feel free to share.

Posted by: Boerumresident at November 23, 2009 5:24 PM

Not loving the interior photos at all -- the finishes look crummy, like a flip job. But I do take issue with some of the financial calculations quoted above. Frankly, this house isn't going to be bought by someone who's putting down only 20%. It'll be either a cash-rich buyer or someone with a good amount of RE equity who is trading up (actually the same thing).

Posted by: grand army at November 23, 2009 5:36 PM

Grand Army, you are probably right that this house has a better chance as a grand 1 or 2-family project for someone wealthy than as a scrappy investor's working dream. However, someone with $2.7M (cost of finished project) has many better opportunities than living 50 yards from Myrtle and one of the largest housing projects in the area.

Posted by: Maly at November 23, 2009 6:24 PM

You guys have no idea what you're talking about...this is a great block filled with great houses and great people. I used to live on Washington Park. You all sound crazy talking about the projects, welcome to Brooklyn! This is one of the best locations in Brooklyn. Some of these houses on these 2 blocks of Washington Park have sold for over 3 million. A house is worth what someone will pay for it. Stop hating frownstoners and stay in the burbs if you're scared of diversity...people money spend live everywhere...even a block from projects:).

Posted by: cillmylandlord_again at November 23, 2009 6:31 PM

This is a beautiful block and Fort Greene Park is great. It is a fine place to stroll on a nice day but it is, sorry, a pretty lousy location for a two-million dollar house. There is a real "haves and have-nots" feeling here, due to the enormous low-income housing projects on the north side of the Park. The area has improved a lot but still has a ways to go in order to appeal to a family with the financial wherewithall to buy a two-million dollar brownstone.

Posted by: Minard Lafever at November 23, 2009 7:36 PM

Yay, pay $6000 a month after the rent to live in an apartment with 3 other families who hopefully wont lose their job and stiff you for the 6 months of free living it would take you to kick them out. Only in New York.

Posted by: williamsburgguy at November 23, 2009 8:37 PM

One house sold for $3,000,000, and it was truly amazing, gorgeously renovated with all the details. It also happened to be on the better block, between Willoughby and DeKalb, and it was the top of the market. You see? I am pretty well informed after all.
The HOTD has the unfortunate distinction of being the penultimate beauty before Myrtle, and has suffered a rather rough Home Depot slap job; not exactly the land of original pier mirrors and achingly-beautiful fireplaces. Not to mention it is not the summer of 2007 anymore. I wouldn't be surprised if Spike Lee's old house (next door of 181) gets north of $2,000,000, concrete garden and Scarface bathtub notwithstanding, but this one? No.

Posted by: Maly at November 23, 2009 8:42 PM

Yeah...you're completely in the know, lol.

Posted by: cillmylandlord_again at November 23, 2009 9:08 PM

What irritates me about the firm that is brokering this home-Brooklyn Properties is....that nobody is ever connected to a listing as as listing contact or lister.
WHY?
If I am an agent that brings in an exclusive listing shouldn't I be the agent that everybody calls to view my property???
It is such a free for all when someone wants to view a listing listed with BROOKLYN PROPETIES.
I just don't get it?
Elliman, corcoran Brown harris HAlstead all have a contact associated with a listing.
I was looking to buy last year a condo with this company and you could never get an email or return call the same day from them.
Seller BEWARE!

Posted by: tjj at November 23, 2009 9:11 PM

OK then. I hope you don't mind if I rip your mantra for my sign-off
*people money spend live everywhere*

Posted by: Maly at November 23, 2009 9:19 PM

Without seeing the house and the corresponding need for renovations, its hard to say how much this is worth as brokers pictures tend to do a very good job of lipsticking the pig. That said, its very clear that the market in Fort Greene will easily support something close to ask for a house on a park block at this size. Yes, its too close to Myrtle, and yes, the economic business case does not support the valuation. But does it they ever? Can someone please show me a house in a top tier neighborhood in north brooklyn where the inputed cash flows actually justify the implied cap rate? I highly doubt it because that is not how brownstones are priced. As someone commented above, the price is set (and justified) by market demand. Someone will find this to be a steal at 1.8. Anyone that thinks its going as low as 1.4 is completely delusional and needs to look no further than the posting from Tuesday's sales where a substantially smaller house (3200SF vs 5000SF) in similar or worse condition on St. James between Gates and Fulton (significantly less attractive location) sold for 1.55. And to settle the speculation, a newly renovated upper duplex in a smaller brownstone (total SF 1200) goes for ~3300 in the better parts of Clinton Hill, and tenant pays utilities, not the landlord. With a better reno, this block commands 1800-2000 per month (utilities NOT included) per floor without too much effort.

Posted by: iwannabrownstone at November 24, 2009 9:07 PM

« Co-op of the Day: 160 Henry Street, #1B StreetLevel: Lucali Spinoff is Named Giuseppina's »

November 23, 2009

House of the Day: 166 Washington Park

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