House of the Day: 778 Carroll Street
The price on this Park Slope limestone was recently trimmed from $1.9 million to $1.7 million. On the surface, this sounds pretty cheap for a Carroll Street location less than two blocks from the park. So what’s the catch? The house is being delivered totally gutted. For some people, this might appeal as an exciting…
The price on this Park Slope limestone was recently trimmed from $1.9 million to $1.7 million. On the surface, this sounds pretty cheap for a Carroll Street location less than two blocks from the park. So what’s the catch? The house is being delivered totally gutted. For some people, this might appeal as an exciting opportunity to create their own space without having to do the messiest part of the job themselves. The sellers have already sunk a lot of dough into architectural plans which are being offered as part of the deal. We suspect it may be tough to salvage much value out of the plans though. Wouldn’t most buyers want to put their own imprint on the design? The question really is, What’s this place worth when it’s finished? $2.2 million? 2.5 million? Whatever the number, the question is, Can you do the reno for the difference?
778 Carroll Street [Corcoran] GMAP P*Shark
Most people who flip are pros and have their own workers on the payroll or a trusted contractor. So there’s no way a pro would pay $500k to fix this place up. That said, there aren’t as many pros as there are end-users. And professional developers know that they ought to get a bargain if a house is really only right for them. But what’s a bargain? If this thing were fixed up spectacularly I’d guess it would sell for $2.2m-$2.4m. But if priced at $1.7m then you’d have to fix up for $300k and then pay a broker to do the resale and pay any carrying costs you might have during the reno. Not enough money in it for a developer. Priced for an end-user who is willing to deal with the headaches and not looking for a profit but will get a gorgeous house of their own design. I’m not the broker of this house. And I do think it’s not going to sell for $1.7m considering what is going on with it. My advice to the sellers is to suck it up and finish the work and sell it then. Otherwise you are going to be waiting at this price for it to move.
“Wide or a narrow, a master flipper must know how to use the buyer’s strength against him. A braggart must make the bean curd…”
Ha. Ha. Ha… 5:55. Why are YOU giving up all your secrets?
The realtor knows the real price and his commission is adjusted accordingly. This happens all the time to finance construction if the appraisal is high.
Normal construction loans can be much more expensive than whatever rate they’re paying on the property’s mortgage.
A deal was made between the buyer and seller that took taxes into account.
why would someone give back couple hundred thou at closing…rather than cheaper sale price?
Makes deal more expensive – realtor fee, RE trans tax, etc.
Because the party’s over and it doesn’t matter anymore. . .
I too am a flipper. I am a Tai Chi master and I have memorized “The Art of War.”
Wide or a narrow, a master flipper must know how to use the buyer’s strength against him. A braggart must make the bean curd. A rich man only knows money. Miele is no longer high end.
(Why are all these tycoons giving up their secrets)
if you want to reno for yourself – you will have to spend much more than $500k – if you want a crap job with some bad construction, it is gonna be $500k…
this isnt a renovation, its a gut job.
Flipper #1 here again:
Of course you can do a cheap renovation with cheap labor. But in a slowing sales market, to sell a narrow house for big bucks, it’s gotta be spectacular.
Even if you use cheap labor, you’d be an idiot not to use a top end designer and very high end finishes.
Remember folks, this building is currently zoned as a 6 family apartment building. Even working at high speed, you’d be lucky to get the new two family C of O and have the place sold in a year and half.
The carrying costs on something like this (2.75% mortgage recording tax, high monthly mortgage payments, vacant building insurance, property taxes, etc.) start eating away at your profit from day one.
Also, the sellers are NOT selling this property at a loss. When they bought the place, they probably got at least a couple hundred thousand back at closing to use towards the construction. The 1.9 million “most recent sales price” on Property Shark does not reflect the TRUE price that was paid.
Thank you, MangWall @ 4:53! I was beginning to think I was the one who was nuts, hearing the numbers thrown around on this blog.