To sell or not to sell?

Hi Brownstoners, We bought a 4 family townhouse in bed-stuy, on Jefferson avenue and tompkins., about 5 years ago. We paid 625k for it. We renovated all but one apt, and have a pretty decent rent role (except for one sec 8 tenant). All the apts but one are two bedrooms. We could really use the cash right now/  Any thoughts on whether it makes sense at all to put it on the market? Are we totally foolish to not try and wait a few years. What do we need to consider? Thanks so much, Cat

greencat

in Real Estate - Sales 13 years and 8 months ago

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brownstoneshalfoff | 13 years and 8 months ago

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“Your rent role is likely 16x to 20x what you can get for the house” me @ 2:22 Whoops!  1/20x to 1/16x. ***Bid half…blah blah blah***

brownstoneshalfoff | 13 years and 8 months ago

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Citi, BAC and some other biggie were just downgraded by Moody’s today.  Greece will eventually default.  Nothing’s been fixed ’cause it won’t be fixed voluntarily through orderly bankruptcy.  The markets will force it.  You’ll see. All the major banks are centered here, right across the river.  Brownstone Brooklyn can run but it can’t hide.  In housing, you don’t get 200% returns over only a decade and not pay the piper.  Never happened, never will.  Offload your hot potato to someone else. ***Bid half off peak comps***

brownstoneshalfoff | 13 years and 8 months ago

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“Are we totally foolish to not try and wait a few years.” The opposite.  The Washington bailouts and legalized balance sheet fraud of 2009 only bought time, not riddance of an all out collapse.  That event is coming by mathematical certainty as with all Ponzi schemes which this housing mess is. GET OUT NOW!!!  TAKE PROFITS (if you can’t, minimize loss)!!! Your rent role is likely 16x to 20x what you can get for the house.  The historic mean/average is 10x.  You’re looking at a 37% collapse. You’ve been warned. ***Bid half off peak comps***

callalily | 13 years and 8 months ago

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Isn’t that area getting quite expensive now, with spillover from Clinton Hill and new businesses opening? I’m farther East, so more familiar with Stuy Heights. Has your place gone up 40 percent in value? Would you be able to afford to buy another place to live after opening a business and moving? Keep in mind that Bed Stuy is “hot” right now, with lots of articles about new amenities (NYT, WSJ), so if you wait five more years, prices could climb significantly (despite broader economic concerns). You could rent it out and have the income from that. Also, are you sure this business is a wise investment, and have you explored other options for financing, such as angels, partners, other businesses, grants, and social media fundraising tools?

daveinbedstuy | 13 years and 8 months ago

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You can always try, no harm in that.  there’s very little inventory out there

rh | 13 years and 8 months ago

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Just a thought….Can you go condo and sell a couple of units and keep the rest for your next egg?

greencat | 13 years and 8 months ago

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Thanks everyone. This is helpful, I was sort of expecting, “you are crazy to sell now”, so this feedback is helpful. Yes, the house is 19 x 45 and has a nice little walled garden.  If we could pull the $ from the house, or elsewhere that would be ideal, but it I’ve inquired (even in the house we live in) and for a 4 family it is a bit more difficult (but yes, is still a residential loan as both of our houses are 4 families). The rates are simply not that much lower than what we have – although I should probably look at this option again. We need to get the $ so that we can move elsewhere and start a business. As much as we’d like to stay, with two children, and a teacher and nfo/non-profit consultant salaries, we’re thinking that it might not be a bad idea to consider other options. Our houses here are our nest eggs (especially for me that I have no retirement) so I’d rather not sell, but this may be our best/only option.

housebywe | 13 years and 8 months ago

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If you need the cash it makes sense.  What are the dimensions?  If it is near 20′ wide, 45-50′ deep and you’ve renovated 75% of the property you can do very well right now at that location.  Desirable blocks in Bed Stuy are very much in demand at the moment and buyers are looking for rental income.

Bklnite | 13 years and 8 months ago

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I guess the new brownstoner limits comment lenght (and just throws away the excess?) “….Someone with a downpayment, good credit & sufficient income to qualify should be able to get a loan.” You could also run the numbers & talk to a lender or mortgage broker to see if a cash-out refi is possible and makes sense (rates are very low). If you need cash and want to sell, put it on the market.  No telling where the market will be in the future, and it’s not like values are going to doulbe if you just wait a few years.

ejalbk | 13 years and 8 months ago

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Have a couple of brokers come out and give you appraisals of what they feel they can sell it for. I’d discount that figure by 10 or 15% as brokers are notorious for overvaluing to get you to list it with them. If the resulting figure makes you want to sell, go for it. Nobody has a crystal ball so anyone that tells you the market will do x in three years, is simply guessing. The problem with a 4 family is the financing (and associated costs) that sort of falls in between the cracks with banks. It’s not a single family, but it’s also not a 1M+ commercial loan either.