House of the Day: 189 6th Avenue
For the millionth time, why do sellers use brokers with crappy websites! This four-story brownstone at 189 6th Avenue in Park Slope is an interesting listing though. At first glance, the asking price of $1,395,000 seems absurdly low for the neighborhood. Look a little further and the explanation makes itself known in the form of…
For the millionth time, why do sellers use brokers with crappy websites! This four-story brownstone at 189 6th Avenue in Park Slope is an interesting listing though. At first glance, the asking price of $1,395,000 seems absurdly low for the neighborhood. Look a little further and the explanation makes itself known in the form of the capital letters: SRO. The listing says it will be delivered vacant, but that’s barely half the battle when it comes to converting an SRO. The real battle is getting HPD to sign off on a Certificate of Non Harrassment, which can take the better part of a year. Meanwhile, your carrying costs are burning a hole in your pocket. SROs are also much harder to finance. Still, a cash buyer could probably end up doing well with this.
189 6th Avenue [Century21] GMAP P*Shark
There is NO C of O on file for this property. Nor are there any violations listed. Propertyshark has it listed as 4-family, C3…taxes next year will rise to $8,500. No mention of SRO
This is a very specific use type. The City regards SRO’s as an endangered species. It is very reluctant to change the C of O of these buildings. They will try and use any excuse to delay it. Meanwhile the former tenants can come out of the woodwork and claim they were harassed into leaving, this usually means a little more dough in their pockets. If you did wish to keep the building as an SRO, I’m sure the city would give you all kinds of incentives and tax breaks to upgrade. but the house could not revert back to apartments or single family for a long long time. This will probably be bought by the large family-owned realty companies that specialize in these kinds of hassles and who have family members well versed in the “art” of converting and certifying. I have actually heard that these families have their people in civil service jobs in the various agencies to smooth things out for them. I would not be surprised. It’s New York, you gotta have a gimmick…This is not a project for a newbie.
How is a four family an SRO, as in single room occupancy? The floor plan shows floor through apartments. Most SRO’s of this size would have had 2, maybe even three, rooms for let on each floor. Was the house a real SRO before, and the C of O was never changed? Wouldn’t that make a difference in whether or not a buyer would have a hard time getting a new C of O. It’s certainly easier to renovate 4 floor throughs, even configuring down to a duplex plus rentals, over a real SRO with about 8-12 kitchenettes, extra closets, and usually a lot more water and wear and tear damage.
So at $2,000, the net yield is 5.8% and at $2,200 it is 6.5%….these are VERY attractive yields. You would be lucky if your IRA yields 6.4% ad infinitum…and remember that yield increases as rents do over the years.
Obviously wiser heads than I have passed on this place, but I’m not sure I’m seeing the huge downside. If you could get it for $1.3 million (say 50% down), then gut reno it for, say, 300k, plus your carrying costs for a year and legal fees, you’d have a 3600 sf Park Slope brownstone in a slightly less than prime location for a (conservative) outlay of 1.75 million. Not bad?
Is there any reason a competent expediter can’t get the C of O changed to single-family or even 2-family in a few months, esp. if delivered vacant?
Again, it’s not been sold so there’s clearly some kind of catch. I just don’t know what it is.
Dave, this is the north slope. Walk to the N and you are 1 express stop from Canal st. These would be very decent sized 1 bedrooms or small 2 bedrooms. You could easily rent them even now for $2200.
Clean them up a bit and you could easily get $2000 or more.
This has been on the market for over a year. The price started over $2M andwas laughable.
$1.3M seems pretty fair for that location……assuming that the building is in fact vacant. The guys at century 21 really are the lowest of the low…..
As I thought, ownhs…so lets do the math…I’m sure these places would rent out for $1,500 each with very little work…$72,000 per year…that’s a 5.6% gross yield.
Cash purchase…no mortgage
Taxes: $7,500
Ins: $4,000 (maybe less but not much)
Water: $800
Heat: $3,000
Total: $15,300….Net yield is then 4%…but would go to 5.0% if rents were $1,800.
What do you people think the rents should be????