I’ve just had a sobering pre-purchase house inspection and am still in shock. The house is a 4 story 3-family on a beautiful block in Stuyvesant Heights. My second offer of the asking price of $700,000 was accepted. The house will be delivered vacant. The owner has lived in the house for almost sixty years. One tenant has lived in his apartment for 40 years. There are some lovely hidden details (tin ceiling, fireplaces, pocket doors, herringbone parquet floors), however they are painted over, or had wood paneling, carpeting, dropped ceilings, etc. put up over them. I had hoped I could do a renovation of $100,000 for the two rental units and then at some point, start to work on my duplex, for another $50,000, maybe.
The inspection shows that the house basically needs everything, and that if I’m going to renovate the tenants’ units, the only sensible thing is to do the whole house. The inspector (who I think is great) feels the price for the work is minimally $300,000, and that’s not with fancy finishes. All major systems need redoing, plus a new roof, re-framing of a few beams and staircases, facade work, cement work (cracked sidewalk), fire escape work, new windows – you name it.
About the only things that can be preserved/restored are most of the floors, and some of the ceilings, the fireplaces (non-working at the
moment) and one set of badly hung, painted pocket doors. If I had the money, I might do it. But I just don’t have the extra $200,000 this project will take, not to mention 6 months to a year of paying the mortgage while I continue to rent in Manhattan.
Yet somehow, I’m wondering if there’s any way not to walk away from this house. Should I offer the owner something outrageous like 550K, or walk? I love the block!
With my budget, am I likely to find anything that’s decent that’s in better shape in Bed-Stuy/Crown Heights? Should I start looking elsewhere? At foreclosures on PropertyShark?
Any and all comments greatly appreciated!