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March 18, 2009
Buying Advice
This may be naive but I am looking at a brownstone shell in Clinton hill. Asking price is 650K needs extensive renovations. I think its a huge deal, others say its not possible. Anyone have some basic figures? I am 28 years old, renter. This would be a dream come true and I think the iron is hot to strike on a good buy with these economic situations. I have always had great real estate foresight with no capitol, and now I have some. if we could muster the buying price, what does a full house renovation look like>?
Comments
Hi,
It really depends what you want to do and who you use. I am doing an extensive renovation (gutting, extending the house on 3 sides) in Bay Ridge. We are spending about $450K. Renovating is a lot of work..especially if you would gut the place. Its also all about finding a contractor who has good connections and good workers.
Posted by: nybk01 at March 18, 2009 10:47 AM
Give us some details like the width and depth of the building. # of floors. # of apartments currently, # of apartment you'd like to have after reno. Info like that is needed to give you an idea.
A full gut renovation could be anywhere from $100,000 to $2 million depending on the size of the building and scope of work.
Posted by: christopher at March 18, 2009 10:49 AM
Did you say a shell? 650k sounds way, way over-priced in CH. Like C said, you could easily be paying upside of a million to re-do a shell.
Posted by: denton at March 18, 2009 11:06 AM
regardless of the price/condition, is this the house you want to live in? If so, and you can afford it, then definitely buy it. If not, I'd pass. As others have said, renovation costs can vary from modest (but always more than you figured) to way, way out there. If you feel like taking on the project, just make sure you have the cash to make it liveable (at least liveable for you), then relax and take your time fixing it up....
Posted by: slopenick at March 18, 2009 11:12 AM
Thanks for all the advice. Yeah i thought 650 was a lot too. The realtor said "Everyone wants it..." They are clearly paid to say that. I am going to see it friday and wil repost some of the info. As I can see form the street its a four story brownstone. It looks like a haunted house so I can only imagine what the inside is. I don't think it is feasible as a one family with our current finances but we are talking to close friends about co-oping it between two couples and sharing the basement and backyard, So I guess two duplexes would be carved out. This is all speculation. I have had my eye on this place since I moved into the neighborhood two years ago and knew it would go on the market soon. I think the sign went up three days ago.
Posted by: jvanderb at March 18, 2009 11:16 AM
christopher, how could a full gut renovation of a rowhouse ever be anywhere near $100K? A modest kitchen would run you $20K. A soup to nuts gut reno (new electric, plumbing, heating, demo/construction, roof, kitchens, baths, floors, windows, facade) would likely run you multiples of the $100k, even with a small house.
Also, has the OP actually found a shell in Clinton Hill for $650K? If so (and if it is not actually in Bed-Stuy or Wallabout, it could be a deal, but the carrying costs and costs of renovation would be significant if you want to do a reasonable and quality job..
Posted by: 1842 at March 18, 2009 11:21 AM
Yeah it is very much in Clinton Hill which is why I want it so much. I saw shells for upward to 999 in the same area.
Posted by: jvanderb at March 18, 2009 11:28 AM
You can get a (perhaps poorly) renovated four story brownstone for about 700k on Putnam between Irving and Classon - there are three for sale, one listed with Corcoran. I think those numbers are crazy (I bought my 3 story for less than half in 2001).
Sounds like you are in dreaming stage - which is great. But unless you are really rich, the numbers don't make much sense to me.
Posted by: Putnamdenizen at March 18, 2009 11:43 AM
"we are talking to close friends" Don't forget to add in lawyers fees when you talk to your "Close Friends" about half way through the job.
Posted by: modsquad at March 18, 2009 11:54 AM
1842,
I tossed out the $100,000 number because the OP was not specific. If he had said it was a 15 foot wide, 25 foot deep 2 story with an English basement that was, and would be, a 1 family, then you could renovate on the cheap for $100,000.
(and those types of buildings exist in almost all neighborhoods - I looked at a 12 foot wide Carroll Gardens building, a 15 foot wide Brooklyn Heights building, etc)
A 25 foot wide, 60 foot deep, 5 story that would be gutted and restored to it's original condition, detail and all, as a 1 family would be in the $2,000,000 range.
$100,000 was a low end with no knowledge if the specs of the property.
Posted by: christopher at March 18, 2009 11:59 AM
You say that you have always had great realestate foresight. But you are 28 years old. The only memory you have of the market is when is has been increasing. I am not advocating a dooms-day view, but just keep that in mind.
Posted by: Frudo at March 18, 2009 12:03 PM
No offense Frudo, but thats a pointless statement really. I think my "memory" of areas changing and prices is as valid as anyone who is buying and renovating in Brooklyn, I'm just looking for some advice not general critique.
Posted by: jvanderb at March 18, 2009 12:10 PM
jvanderb,
In one of your follow up posts you said:
"we are talking to close friends about co-oping it between two couples..."
I would caution you to sort all that out well before hand, contracts and the like. Who is paying for the renovation? Who has final plan approval? Are you doing it all and then selling them a unit? Definitely consult a lawyer if you decide to move ahead. Filing the papers for condo or co-op could be in the $10,000 range. You could also try "tenants in common" if that is still a viable designation.
Think long and hard about this and be clear with the other couple what the renovation costs will be and who covers what, etc. Doing a joint project from scratch with this kind of cash involved can get real ugly real fast, regardless of RE knowledge or the closeness of the relationship.
Can you post a link to the listing so we can see pics?
Posted by: christopher at March 18, 2009 12:30 PM
This kind of rehab takes one to two years. You will have to live elsewhere while the work is done. So if you have a spare half million to million and want a modern house, I'd say go for it. Use an architect, obviously.
Posted by: mopar at March 18, 2009 12:32 PM
The listing is with Cen21 but its not on the website yet. I am going to meet with them on Friday so I will see if I can get some pics up. yeah the co-op idea is not fleshed out, its just a thought. Everything is in the "Hey that place finally went for sale..." stage and I am just lkicking around possibilities. All these numbers are very helpfull.
Posted by: jvanderb at March 18, 2009 12:44 PM
think I know which bldg you're referencing. I walk / drive by that block often. It's been boarded up like that since I remember 1st seeing it in 2001. It's an eyesore for the block. Squeeze 'em hard. No way it's worth 650k. for non-developer buyers, can't see anyone offering more than 500k. Good luck.
Posted by: more4less at March 18, 2009 12:57 PM
You can renovate a kitchen for less than 20 Uk. Of course you can. We put in an Ikea kitchen where there used to be a bathroom for maybe 3,000. Still have some backsplash tiling to do, but otherwise it works well for us ! You sound like you cannot afford high end renos - neither could we. We also work full time, have 2 kids and have no time to reno ourselves . We used locals and craftsmanship may not have been always great, but well worth the $ saved....
Posted by: crownheights2007 at March 18, 2009 2:47 PM
You can renovate a kitchen for less than 20 k. Of course you can. We put in an Ikea kitchen where there used to be a bathroom for maybe 3,000. Still have some backsplash tiling to do, but otherwise it works well for us ! You sound like you cannot afford high end renos - neither could we. We also work full time, have 2 kids and have no time to reno ourselves . We used locals and craftsmanship may not have been always great, but well worth the $ saved....
Posted by: crownheights2007 at March 18, 2009 2:47 PM
I'm in the middle of a renovation of a 2-family three story brownstone in Bed Stuy. How much your renovation costs is up to you and your neighborhood.
My partner and I are quite handy and our neighborhood is relatively relaxed, so our renovation is going to come in at around 200K and that includes everything, new elec, new plumbing, lots of structural work, every single surface new, 2 new boilers, etc etc.
It does not include fancy surfaces or kitchen/bath excessiveness, or things like permits and architects, which fussier neighborhoods seem to require. This price would be close to impossible if we didn't find a smart, flexible GC who is good at working with us as if we were subcontractors (as we are doing a good amount of the work ourselves).
We are living here and chipping away at this project over many years, hiring contractors as we can afford it. This strategy is dusty and gross, and not for everybody, and if we were working with another couple, we would have killed them by now.
I think it's important to understand that there are a lot of ways to skin the cat, and also that it's a surprisingly stressful project, and plan accordingly.
I would buy something now if I could get a mortgage. I think it's a good time to buy.
I would never work with friends on a gut that is supposed to be our homes. There are too many surprises, everybody gets more tense than they think they would because it's about Losing Control and about Home at the same time. The situation presents too many opportunities to loose a friend.
I would personally sit down and think about what you can offer: do you have labor and time or money? Do you have specific skills? Don't do what I did, really think about how your life is going to unfold while this project happens.
And I would buy a gut job only if most of the gutting has already kind of been done--don't buy something that's got layers and layers of drywall all over it and dropped ceilings and such. You want something where you can see the actual bones of the house. Otherwise you are not going to make a smart decision.
And I would personally not, in this market, pay more than $500K for something in that condition in Clinton Hill--$400 or less in Bed Stuy. Realtors are such liars. Get a good deal, you'll need your money.
Posted by: vanburenproud at March 18, 2009 3:13 PM
The other thing to consider is the mortgage itself. Most banks won't give you a loan if they think the house is a wreck for that kind of money or they may only release a part of the money with more released on successfully getting a C of O. You may want to start discussing this with a lender to make sure you can get the money you need.
Posted by: bunkerlabs at March 18, 2009 5:16 PM
It is possible to buy a shell with a partner and reno it. I'm planning on doing it myself and have gotten fairly far into the process, but prepare yourself for a steep learning curve and a huge time suck the size of another full time job.
So you can do it as "tenants in common." There are lots of house in FG/CH owned under this arrangement. Basically it's like a two party coop, with all of you on the mortgage. It's definitely wise to work it out the details with a lawyer. Our lawyer, Zerline Goodman, who has handled many TIC agreements offer to hammer out our contract as part of the closing costs when we found a place. She's great. If you want to move forward, I definitely recommend calling her.
Also, if the house is a shell, you may have to get a FHA loan to finance the purchase and reno. If the place isn't habitable, you can't get regular financing. The borowing limit on a two family is 800k and they only require somethig like 4% down, but that would only leave you 150k for your reno. Depending on the size, this isn't much. A general rule of thumb is 100k per floor for a gut reno. All the quotes I've gotten for my own project fell fairly close to that. Of course you can do it cheaper, but if you want to split the utilities and have separate heating, elec, and hot water for each unit (which will make converting into condos easier down the road for reselling) then it will be hard to come in too much under that number. Also, there is a lot of oversight required for FHA loans, and the work needs to be done in a specific time frame, making it harder to do it on the cheap or to drag it out. But it is possible if you are willing to put in the time and effort. There's tons of information and knowledgeable people on this forum who can help guide you through all of it. Good luck!
Posted by: lucybb at March 19, 2009 4:40 PM
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