Buying a Vacant Browstone Designated As Unsafe Building
I recently happened upon a three story building with a beautiful brownstone facade. The only problem is it has been vacant for years, all the doors and windows have been sealed with cinder blocks, the DOB has designated it an unsafe building with multiple violations including pieces of the facade and debris coming down, and…
I recently happened upon a three story building with a beautiful brownstone facade. The only problem is it has been vacant for years, all the doors and windows have been sealed with cinder blocks, the DOB has designated it an unsafe building with multiple violations including pieces of the facade and debris coming down, and its owned by the bank.
I would love to explore the possibility of purchasing it and restoring it. But where to begin? Do I first find an agent to pursue the possibility of a purchase from the bank? The banks have owned it for over two years, and it has been passed along to numerous banks in that time. If the bank declares it uninhabitable does that mean they won’t sell it?
As for inspecting it, maybe should I get a structural engineer to do an examination of the front to see if it has any obvious structural defects which would render it unsalvageable? Once the cinder blocks have been put up and it has been designated an unsafe building, is it beyond repair? If the bank allowed it, would a structural engineer even risk going inside for an inspection?
I have lots of questions, but am uncertain who to talk to about all of this.
You might want to just consider buying the land, tearing it down and putting up a nice simple modern building. As much as i hate to say it, that might be the best route, if the price is right.
Look at this:
http://www.imdb.com/title/tt0091541/
Starting from scratch can be cheaper than an extensive renovation. It is easier to cost out as there are no surprises and you are not adapting to the existing configeration. Bank financing will be really hard, especially given the recent subprime/”liar loan” mess. The bank who owns the property might lend you the cash — they may see this as good money after bad or they may see it as their only way out. Most people won’t touch it and you’ll be able to buy it cheap. But make sure you have the renovation cash lined up. A half-finished job is worse than no job at all.
check out the hpd website I think they have a program called 203(k) or something that may be what you are looking for.
I also bought a building with a UB and multiple violations and no CofO eight years ago. Everyone including my lawyer advised me against it. My bank would not touch it. My mortgage broker found one bank that would provide a mortgage. The bank required 30% down plus another 10% in escrow until the title was cured. I was able to clean the title, it took three and a half years from the time I bought it. Because of the escalating prices of real estate in NYC I was able to see a large increase in the value of the property. Now everyone including my attorney that advised me against it thinks it was a brilliant move. Go figure. This is not for the weak of heart though.
I did this exact same thing over ten years ago in Boerum Hill. Actually, as long as the basics are sound (ie the four walls will stand up), you have the best possible situation. The gut rehab can be total – no surprises. In my place, even the joists had to be replaced. Buy directly from the bank if you can. My building cost – in those days – five figures.
There a type of loan called a 203K, which is a purchase and construction loan, where the loan amount is larger than the current value of the house. They collateralize the projected value. The rates are not pretty, but as soon as you’re done you can refinance.
It’s a ton of work, but it can really pay off, and unlike with an existing interior, you can do whatever you want because there’s nothing left in the first place. If you like the area and the building is structurally sound at the foundation and walls, I say pounce!
Y’know, I was talking to someone a while ago that bought a house I bid on – long story. They tore everything down except the front facade and rebuilt. A truckload of money BUT not as much as I thought. 6 figures several times over. If the building’s priced right (a bank’ll take a low offer methinks) and in a good location, I might investigate this if I were a little bit knowledgeable with construction/contracting etc.
I’d call a mortgage broker. They’d be able to tell you how to find out who owns the property/current note and tell you viability of a construction loan – purchase price plus cash out for reno.
Good luck!
Unless you are into masochism, stay away. Trust me.
I found it has been very interesting reading articles and forums like this. I wish there were one for Californians.
In California, when you are buying an old building, you should consult the historic building agency to find out whether you will be allowed to renovate the architecture of the building. In general, you will need to hire an Architect to do this and other property related investigation. At the same time, you may want to consult the property management department of the bank on how you can buy the property from them. In general, a licensed realtor for this type of purchase is required to represent you.
However, I do not know if your State will allow you to hire an out-of-State Architect to do the investigation for you, but I doubt it.
Good luck.