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September 18, 2007
A Great Deal on a Condo in Clinton Hill
So I just heard about an insider condo deal from a friend of mine. The condo is in Clinton Hill on Grand Avenue and 1200 square feet and has three bedrooms plus a kitchen, den, and living room, so it could be used as four bedrooms. It's renovated, but it was a pretty basic renovation - nothing really fancy.
The problem is this. The building is half occupied by older rent stabilized people, and half younger condo owners. There is video security, which is nice, but there isn't a thermostat in each unit, so the heat is controlled by a central thermostat. The price can't be beat, and I know I can upgrade the kitchen, but I wonder what it will be like living along side older stabilized tenants. Thanks for your input.
Comments
I heard something once that was simply put but wise - whatever concerns you have before you buy a place, any potential buyers in the future will have the same concerns. If the current sellers are being forced to sell at a discount, you will too.
Sounds like your perception of the place as a bargain is based on its size. Why not buy something for a similar price that's not as large as this, in a better building?
Posted by: guest at September 18, 2007 2:13 PM
The building itself is nice enough on the outside. It's not that. I haven't been able to find many family sized units in Clinton Hill, and the ones that I've seen were on bad blocks or really, really expensive. This place is less than $500 a square foot. I'm more wondering if anyone has lived in a place like this in Brooklyn. I lived in a co-op in Manhattan that has a similar configuration, and people were generally nice, but I've lived in some Brooklyn buildings where older tenants were not nice.
Posted by: guest at September 18, 2007 2:34 PM
It depends entirely on whether the rent stabilized tenants are people with jobs or are unemployed. If they are hard working people with jobs, then you'll likely be fine. Ask some of the other owners what the neighbors are like...
Posted by: guest at September 18, 2007 3:10 PM
Older tenants not nice how? No cookie baking grandmas or were they hard partying seniors? I can see if many of them have troublemaking grandchildren living at home, that could be a problem, or maybe the tv on too loud, but not nice?
Posted by: guest at September 18, 2007 3:15 PM
Your real concerns are financial. Niceness has nothing to do with whether one is old or young, renter or owner, employed or unemployed. Ask anyone who lives in a coop building - joint ownership is its own form of insanity, especially in smaller buildings. But I digress...
Your concern is is financial, because the renters only have to pay their rent, period. And if they are rent-controlled or rent-stabilized, there is a limit to how much their rent can be raised. It doesn't matter if the building's roof caves in and the building has to replace it - that expense is borne by the owners.
So, yes, the developer (or whoever) who owns the rented units has to pay his share of the common costs for those units, even if the common charges are much higher than the rent he collects from his stabilized or controlled tenants. (It was common in coops in the coop boom of the 80's/90's and to have rents that were way below the sponsor's actual maintenance costs.)
Why does this matter? Because if the sponsor/developer (and my guess is that the rented units are held by the sponsor/developer) gets into financial trouble, (as many did in the 80's/90's), then he may just stop paying the common charges (as many did then.) Actually, I'm not familiar with how this works with condos, as most buildings with stabilized or controlled tenants in place in the past were coops (maybe yours is and you are using the word condo loosely.) But the problem would be the same, even if the mechanics differed.
In coops, the coop corporation could then (and often did) take over ownership of the apartments the sponsor was in arrears on, but all they could collect from the tenant was the stabilized or controlled rent - until the tenant either died without eligible successor, moved out, or were bought out by the coop. In the meantime, the owners of the other units must pay a greater share of the building's expenses.
Given the overdevelopment going on now, it wouldn't surprise me if developers had financial troubles in the coming years.
And, while there have been some apartments for sale as investments with rent controlled or stabilized in place, I don't think there was ever a big market for them (would you buy one?). So developers/sponsors might end up just walking away again, leaving the buyers of the sold units to pay more in building maintenance costs than they ever expected to when they bought their units.
Posted by: guest at September 18, 2007 3:43 PM
good info..thnx 3:43
Posted by: guest at September 18, 2007 6:40 PM
One issue to consider is whether you can easily get a loan for a purchase in this type of bldg. Lots of banks need a pretty high percentage of owner occupied units before they will finance in this type of a bldg. Even if you don't need the loan the people you eventually sell to probably will. So check this out seriously.
Posted by: guest at September 18, 2007 8:53 PM
we live in a similar situation. the older rc tenants are all nice, but some aren't that old, and they aren't going anywhere for a while. So we (the co-op shareholders) are left holding the financial bag, as it were. It hasn't been a huge problem...yet. Good point about having to sell at a discount, too. There are no bargains in NYC real estate...you can't flip in a situation like this...but the upside for you, and for us, is that we were able to afford more space, and with 2 kids, we need the space right now more than anything else.
Posted by: guest at September 19, 2007 12:07 AM
Ummmm...maybe I am naive as I am a renter, but why would you buy a place where you can't control the thermostat? That has to be one of the worst things about renting, yet you would also give up this right when owning? I know we all have to make compromises, but this sounds like a real bummer...especially with a older population, who will (in theory, anyway) have much different heat requirements than you. Is this something that's going to give you buyer's remorse? As well as seller's remorse when you try to sell?
Posted by: bhguy at September 19, 2007 4:34 PM
Common thermostat is standard in brownstones converted to coops/condos. Only the few that went through gut renovations before conversion from rental buildings(and only some of those) had separate heating units installed.
While being able to control your heat is nice, you often lose (1) valuable floor/closet space for the heater and hot water heater, and (2) usually all the old detail in the gut renovation (100 year old oak window and doorway trim, ceiling medallions, etc.) So the apartments aren't as nice.
Living in these buildings involves compromise - and compromising on the amount of heat is the least of it.
Posted by: guest at September 20, 2007 7:18 PM
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