Warehouse 11 and implications for pricing in Wburg

Thanks free. I looked at that stuff.

Apt23, it would probably take a while before you started growing a third arm, especially from two or more floors up. Putting this in perspective, a child is probably at greater risk of hitting a used,contaminated syringe in a park in new york city, or picking up a used condom than getting emphesema living in this building.

What's a bit distorting about all the news stories is that they are all from observations that may or may not mean much from people who are no trained in any way to evaluate this stuff. It's not clear if it is from an oil field underneath. The people that really know, the city inspectors, contractors, engineers, haven't issued a statement but apparently the prospectus covers this stuff.

If you get too worried about this in this area of Wmburg, it starts to beg the question of how much of wmburg you view as potentially contaminated.

I'm a bit puzzled the developers/agents haven't got a good simple fact sheet on this.

yes Jim this situation is the Platonic cave..don't believe the shadows find your own reality.

if we leave aside toxicity and wetting issues for a moment,

- what would you say a 697sf one bed would rent for in this place?

- given that monthlies are about 350$ (there is tax abatement), what does that imply about yield at 550sf....much higher than what the bears complain about in manhattan

harryap,
this was my exact choice as well. i don't think there is a better choice just the choice that suits you best. presently live @ 104th and columbus and spent over a year looking in Harlem and Williamsburg. I chose bburg after determining it was best for me and the missus. We chose 70 berry but i believe W11 is definitely worth checking into. Good luck.
On a side note i will disagree with the assumption that it is faster to midtown from harlem than bburg. This is partially a function of how close each place is to the subway. Granted if both places are equidistant to a subway stop yes harlem is quicker but if you find a place close to the bedford L stop the difference is negligible.

and..any thoughts on noise from the driggs ave route being audible in these units? (bus noise can carry a long way, but it is important that this area is flat so not accelerating up a hill)

and...can someone please check the sf of say unit 2j...they say it is 697 but i get a little less than 600

i get 638s.f(23ftX27'9") Jim. The missing 60 ft is probably your % of common area space(hallways,lobby,roof deck ect.)

ok..thanks...

"The missing 60 ft is probably your % of common area space"

how is this kind of stuff even legal? Im actually trying to buy a place right now and I cant negotiate based on sqft because numbers are so f'd up

http://www.brownstoner.com/brownstoner/archives/2010/01/foreclosures_mi.php#comments

mut...didnt quite get the point of the link..

what's your view of wmburg now?..what;s yoru view of w11

jim,

The link pertains to W'Burg 1st 3 qtrs of 2009 which may have an indication on how the 1st 3 qtrs of 2010 will be in W'Burg (food for thought). My views of W'Burg have not changed, W'Burg property values will continue too decline in this depressed economy. w11 I feel will eventually be rental after a couple of minor price reductions. Those hazardous chemicals covered by a membrane underneath w11 will be a deterrent for some potential tenants. However, I do think the bldg is nice looking on the inside & out. Does that shed any light on my views?

mut...they are underpricing other buildings right now, and say they intend to sell, so unless it flops bad looks like they are not going rental..if the lender was bought out at a discount , i guess they could do low on the prices and still do well (but i dont know who owns what there now)

jim,

Time will tell :o).

Just a thought: given the toxicity of the site, it's most efficient use would be as a rental (probably not to families with small kids), where people only stay for a few years, since usually it takes quite a bit of time for the toxicity to affect someone. They could highlight this in the marketing materials.

as in "hey, we're only doing one year leases; stay longer and you'll probably die from the fumes."

Yeah, but if I was renting I would look at the new 142 unit rental opening in spring at 34 Berry a few blocks west. It seems like noise is a concern for you and it's definitely quieter than Driggs/Roebling.

And you could very well be right that people don't really care or do their due diligence if they're renters on a toxic site:

http://curbed.com/archives/2008/06/20/more_black_gold_in_williamsburg_40_berry_street_oil_field.php

jim,

"where people only stay for a few years,"

This is not everyones reality. If this bldg WOULD have a high turnover rate, due to the toxicity of the site, what's the longterm value of this building? I assume it will be a lot lower than todays asking price. This is a bldg I would not live in.

columbiacounty,

What a marketing slogan.

Uh, well, I was kidding (and, for the record, I made it up when I wrote on another thread about the doorman changing diapers for newborns). I think even in the boomtimes, a "live cheap, it's toxic, and no problems so long as you stay less than two years," would be a hard sell.

jim,

I agree. I will be watching to see how this situation comes along :o).

they might begin to sell at these advertised prices, i am sure they are leaving room for additional negotiations

thank you moxieland - its tough to make compromises - iffy manhattan neighborhood or trendy brooklyn. Nice to hear other's experiences. I will check out 70 berry.

Walked by this place, real garbage.

This thing needs to go rental asap. I think the sponsor will base there decisions about selling depending on how the first two months of sales are.

why do you think it is garbage

and how can you determine that from "walking by"
it actually looks quite nice when I walk by

did anyone go to the open house?

its is not till Thursday at 5pm

ny post article on trucks on north 11th:

http://www.nypost.com/p/news/local/brooklyn/item_ELgM0sanMNCXHkfj25CxPP

In a lighter note, the main blogger at curbed who posted all that oil spill stuff died last year under somewhat mysterious circumstances, apparently a heroin overdose. Williamsburg re is ...interesting.

another blog writes:

On the one hand, North 11th Street has always been a truck route, so its a bit disingenuous of people to buy a condo on a mapped truck route and then complain when trucks use that truck route. On the other hand, North 11th Street has never been a good truck route, and as the neighborhood becomes more residential, is even less so. The big problem is not so much the presence of (new) residential buildings, but rather that North 11th is a crosstown street - all the stop signs and avenue crossings will create backups and increase chances for accidents.

It may be a fun exercise to see what people feel is a fair price for w11 given all we've discussed. Even though I'll likely pass for now, there is still a price for everything. Assuming WB has bottomed and taking a second floor unit and using 70 Berry as a current comp we start at $600 psf real deal transaction price, but lets call it $625 psf as listed.

Minus $25 psf for deposit risk of being a cutting edge pioneer and buying into a new construction in this environment and the risk of this going rental if less that 15% contracts are signed.

Minus $25 psf for less desirable crosstown street location and noise from traffic

Minus $25 psf due to developer's legal fight with Capital One and potential lingering impact on quality of remnant construction/repair work and prolonged closing date

Minus $50 psf for potential longer term structural issues (damage from exposure, shody construction like faulty water membrane) and the real risk that costs are passed to tenants through maintenance increases and special assessments. Cheaper replacement appliances and fixtures after looting don't really fit in this category, but not really worth breaking out so I'll lump it in here.

Minus $100 psf (for me more like $200) for being directly on top of bio-salve treated contaminated oil site, though separated by a membrane as a precaution

= $400 psf

Where do you value w11?

freewilly,

Cute real cute, Thnx. LOL.

aptsandlofts is a huge problem. If you have not had to deal with them don't. If you think the owners are crooks you have not seen anything yet. I can show you a number of email from aptsandlofts that have flat out lies in them. Including who owns the building.

In addition to the points listed by freewilly, WH11 is located at a Special Flood Hazard Area according to floodsmart.gov.

Anyone go to the open house? Was it crowded?

Did anyone ask the tough questions? What was aptsandlofts response?

I just got back from the open house, I would love to hear from more people that went. Whole thing was nice, although you have to take these things with a grain of salt. It was pretty packed, I was there for a while and came back to a still packed building. I expected this since no one could get in for the last couple weeks and buzz had spread. I ended up putting in asking price for a unit I was very happy with. I thought the layout, finishes, setup was very nice, especially for the price. All the units in my line have offers out except the 5th and 6th floor, so I felt a bit rushed to get my offer in (knowing I would then have about a week to really knit pick and leave if I wanted). It looked to me at 7:45 they had about 15 accepted offers (they were doing it on the spot). I also nabbed a parking spot since I was one of the first 10 accepted offers in a 2br.

Quick bit of history on me, I have been looking for months to try and get a 2 bed 2 bath place in Brooklyn or Manhattan. I didn't like anything I was seeing in upper Manhattan, so I focused on Forte Green, Park Slope, Prospect Hieghts and a little in Williamsburg. I was all set to go after the Forte in Forte Green, but I got in just a little too late. I'm a big fan of new developments and they also seemed to be offering the best deals. I know a lot of people are worried about the building and say to check out 70 Berry, it's not that much more, but I have no idea what you mean, the 2 beds there are around 200,000 more. The building looks great, but...200,000 bones is pretty rough. I know the sq foot might not be as big of a jump, but I still think W-11 is priced pretty competitively.

Things I am and am not worried about: The oil...not worried. They provide a certificate, they put the membrane down, they dug deep and took samples, I juuuust don't think this is as big a deal as people are saying. Occupancy, little worried. I could be one of the first people to buy here and I hope the trend continues forth from tonight and the place fills up and I am grilling up some steaks on the rooftop this summer with my neighbors, but I am realistic that this may be an issue. There are a couple things I need to explore in the offering plan, I will let you know when I get my lawyer to read it over as well as myself. Overall, the building looks great, needs some work done, but overall very happy. The bathrooms are so fantastic and my wife and I love the windows, huge closets, massive counter space in the kitchen and the appliances.

Lets keep the discussion going, I would love to hear from people that have offers out, I'm a big fan of strength in numbers. Please comment on the area, other prospects and the building itself if you visited it or have any experience with it, would greatly appreciate it. Thanks all.

Although it was pretty packed, many of the visitors where there to see the place and to chill like at The Edge over the summer. Did WH11 serve drinks?

Dane,

Thanks for your synopsis.

Dane

I agree with you. I made an offer for one of the apartment. I believe that the prices are decent. I loved the bathroom and the big windows. I am concerned about the condo fees. I am sure that they will go up at least 10% to 20 %. I know that the may be a huge supply of condos for sale in W brug in teh coming two years. I believe ,however, that being one of the first to pick an apartment is a huge plus with the incentives offered. Dane, do you know what is the rules regarding condo fees if there are only a small percentage of apartments sold? I don't want to be a casualty similar to the people who bought in new buildngs in Miami. Are you planning to move in the coming months? I just don't see myself continuing renting at twice the price of mortgage for ever.

Dane, globetrotter, two things: I'd suggest you guys who placed offers get together ASAP and pitch in to get a building inspector to check out the building infrastructure before you sign along the dotted lines (esp for this building). If they won't let you, that's a red flag. Two, have your lawyers pay particular attention to the budget, etc. in the offering plan for the building and get a feel for out how long before common charges are passed to you if the building is not filled.

Otherwise, congrats!

Good advices freewilly

dane

I also made an offer and am picking up the contract tomorrow. Let me know if you would like to meet to discuss getting a building inspector.Thanks.

Hi Dane,

My guy is Tom Walsh, he was really helpful when I wanted an inspection on a WB unit that I ultimately did not close on, trust him 100%. He can also do a "Neighborhood Environmental Report" although I don't really know what that entails. His inspection of the unit I was interested in was $375 (not as cheep as Sergey) and I don't know what a full building report would cost. I am seriously considering W11 and would chip in on a full building report if I proceed.

All Aspects Home Inspections Inc.
Certified Real Estate Inspector
Licensed New York State Home Inspector
Environmental Data Resources Certified Home Inspector
President of Metropolitan Association of Home Inspectors (MAHI)
516.731.7213

http://www.allaspectsinspections.com/

Love his site. I will make a couple calls soon and see what would work best for our situation. Glad to hear that there seems to be interest in the building. Stay in touch.

Politikat

Thanks for the reference. I just call a lawyer that was referred to me. He warned about Wburg new buildings.He stated that if only a few potential buyers will sign a contract, we may end up with big expenses and no services for a while...expected. Dane, Politikat ,Harryap, how comfortable are you at this point about buying in this building?. When l left yesterday, one of the agents told me that there were 25 offering plans taken and 15 others potential buyers working on getting their paperwork.For me, this is an ideal apartment,three aspects make me hesitate ( worst case scenario): 1) Building is not good quality and does not pass the inspection test;2) Low occupancy with no services and high maintenance to cover costs( nightmares in coming months and years; 3) Condo inventory on the rise....cheaper price in coming months. I will contact "all aspects" .I am
interested to use their services .

Just a word about low occupancy = high maintenance - take a look at the offering plan to be sure, but usually the sponsor pays maintenance on all unsold units, so you're not paying any more just because many other units are unoccupied. Obviously you'd prefer a full building, but it's not like you're covering for others if you're in early.

Globetrotter,

You've hit the 3 main concerns. We are getting the best deal being the first buyers, so I'm sure that comes with some risk. Low occupancy and higher CC: I believe bjw2103 is right and that they should pay, otherwise we would be paying 8,000 a month or something like that and I can't imagine that can happen. This is something we should make absolutely sure of though through our lawyers. Building Quality: I'm not too worried about this, I'm sure their will be issues, I don't think there is a building out there that doesn't have something wrong with it. We will have to see what an inspector says. Inventory: I don't know what is upcoming, it seems that a lot of projects got frozen though. Anyone have more info on upcoming condos? I think most people are worried that their apts will drop from the 700,000 plus range they paid to the prices that these apts are selling for at W-11. My biggest fear is that the place doesn't sell well. It seems like it had a great first day, but who knows if that will continue.

I couldn't find anything about the sponsor covering CC's on unoccupied apts. I'm reading through the whole thing now, but I skimmed ahead to see if I could see anything. Let me know if you find it. Also, since some of the apts are unfinished (including mine) how good will the inspector be on my own apt? I can see him being useful for the entire building, but I want to see what kind of assurances I get if I put down the 10% and then find issues later on.

Dane, take a look in this thread - I put together a tally of the inventory in the area. Sorry about the back-and-forth banter with mutombo (a rather creepy and completely untrustworthy poster if I ever saw one, unfortunately) that follows, but otherwise should be a useful thread. Good luck to you guys - hope everything turns out well.

Link: http://streeteasy.com/nyc/talk/discussion/17699-2700-units-going-live-in-williamsburg-in-2010

jim?? did u go to the open house?

An email we received said they have their CO already. I suggest those with offers accepted make sure they spell out in their contracts when they want to close (we put in our contract that we want to close only when 50% of apartments were under contract) and a deadline for closing (we gave them a year to get 50% sold). Also have your lawyer put in a mortgage contingency (ie if you are unable to get financing you won't lose your deposit)

"We are getting the best deal being the first buyers, so I'm sure that comes with some risk. "
i'm not sure that this is true in the current time. I don't think you can find a new development today that the new contract signers are paying more than previous ones. in fact it seems to be the opposite, new buyer are getting better deals for obvious reasons. however there is more risk to being early as u outlined. probably the one major advantage you have in being so early is your selection of units.

"Building Quality: I'm not too worried about this, I'm sure their will be issues, I don't think there is a building out there that doesn't have something wrong with it. "
please read this entire thread and the article link somebody posted at the begining. there are allegations that there are structural issues that arose during time of neglect mold, water damage etc. they are allegations, but this project does have some increased risk compared to other new projects. i would not take for granted that everyhting is fine, some major problems could have just been covered up. i think an engineer report is a good start but i would think a comprehensive structural engineering report on such a big bldg would be prohibitively expensive. i would also ask for documentation from the developer on what repairs were made when the project was taken over from the original developer. if i were buying, this would be my major concern as it could get expensive years down the road. as for "the membrane", i don't know about that, but obviously there is some issue if this creative solution had to be put in place, i would want to know more about lifespan, reapirs etc.

I just got off the phone with the broker and Tom, the inspector. First may I say that Lookpied seems to have some excellent advice. If we could get that down in writing I would feel much much more confident. Tom says that he has been dealing with a lot of these foreclosures and new developments in Williamsburg recently and seemed to know his stuff. I mentioned that we all wanted independent inspections and had some concerns about the building as a whole. To do a whole structural report by an engineer would be thousands of dollars and something he couldn't do. He said that if the building had a certificate of occupancy or a temp one, that it was a very good indicator that the building is in good shape. He talked about how ruthless these guys usually were. Saying all that, I understand that there is still risk and I don't take it lightly, but I feel a bit more confident.

I asked the broker about the CC and she said that the sponsor pays for all unoccupied units. It only falls on us if the building goes into forclosure or they file bankruptcy. I also asked how they units were selling and they said they have 25 accepted offers and I think 12 or 14 offers that were under asking price, so they are going through them this afternoon.

I'm going to look at the place again this afternoon to see it in the light. If anyone wants to meet up and chat, I will be there from around 1:30 to 3. Email me: akdanb@gmail.com.

Now Capital One has launched a lawsuit to wrench control of the property from Schwartz and Rosenberg on allegations the pair has looted the building’s appliances and let it fall into decay from exposure to the elements.

But stealing hasn’t been Capital One’s only issue. The suit alleges that water has been collecting in the fallow property’s basement since at least January and has caused damage, including mold.

In court documents, Jean DeLuca, a vice president and on-staff engineer at Capital One, remembers two inspections in January in which he “observed water in the basement of the building” including a pool in one area that was four inches deep.

“Almost all the areas observed were noted to have a water presence, including the stairwells,” DeLuca states. “The areas that were not observed were about 10 percent of the rooms, which were locked and inaccessible.”

“Mildew was visible in various areas throughout the cellar level,” DeLuca recalls. “As a result, there was a strong mildew odor in the cellar and on the first floor.”

DeLuca said that Schwartz provided a host of excuses for the problem at the time, including a claim that one of the building’s doors had accidentally been left open, allowing the freezing temperatures outside to cause a pipe to burst.

I read that article too. I want to know more about it and will ask today. Something like that we could have an inspector eyeball and take infrared scans to see if there was mold or water damage. Something to take seriously though.

For anyone that is interested, I will be waiting outside W-11 today at 2:30. I know one person has already emailed me to say they can meet up, I hope some more can make it too. Email me to let me know, I hope to just meet up and shoot to a coffee house or bar so I'm not standing in the cold too long :) Lets see if we can work through our concerns and come up with a plan.

any of you guys with contracts able to negotiate down on price, maybe as a group you could be successful

I had looked at W11 the first time around and declined because of a couple of reasons:

1. Sale percentage. I would still be hugely concerned about this. If you're worried about closing on a mortgage, I would NOT buy here. The building will go rental before they hit 50% in contract.

2. Assuming it does get to 50% and people are able to close - COMMON CHARGES. I have never seen a more ridiculous CC estimated budget in my entire life. 120 units and a doorman - you're looking at approx. $150/month, per unit, minimum. This is assuming $50k (about what union doormen get) plus benefits, etc. The 2br/2ba I was looking at there had CCs of about $400. WAY, WAY OFF. There is no way this would be sustainable. They will end up being at LEAST double what is in the offering plan. Have a look at their budget and let me know what you think.

3. I think the condition of the building overall is pretty poor. I see corners cut, shoddy construction practices in general everywhere in the building. Floorboard gaps, poorly installed cabinetry and tiling, etc. There were a number of long work stoppages on the property and that is ALWAYS a concern to me. Who knows who started and finished the work?

Bottom line - I agree with what most people have said in this thread. If you can mitigate the risk, might be a good deal. But for a first time buyer (as I was) who is renting (as I was) you need to know that:

A) YOU CAN ACTUALLY CLOSE IN A TIMELY FASHION
B) You are not buying a condo that has ANY CHANCE AT ALL of failing, going rental, etc. This is going to be your first major investment and despite the price, it is NOT WORTH THE RISK. You are putting your entire financial future on the line with this ONE investment. Make sure it's a good one.

W11 offers a potential buyer neither of these safeties. First time buyers - look at any of the other properties in the area. Remember that $100k on the purchase price is only $10k for a down payment (maybe even less!) and a small bump in your monthly P&I. Make a safe investment.

LookPied's advice is great - the mortgage contingency is a must, and a very doable concession. The won't-close-til-50%-sold probably won't fly, but I would definitely go for it to see the response. The difference with LookPied's building is that it's 20 units or so (correct if I'm wrong, LP), which makes that threshold much easier to swallow for the sponsor. With 120 units, unless they get most of these offers signed (have to admit the initial response, if accurate here, is impressive)), I don't see them eager to agree to that. In terms of inspectors and engineers, you should have 2-3 years to get a report done and still be able to hold the developers liable, but it can be prohibitively expensive, and the results may not be comprehensive enough to really address all your concerns. Do your due diligence here before taking any steps. I'd be more concerned about the building (leaks, plumbing, heating especially) than individual units, which you can cover pretty well on your walk-through.

Just to clarify some math in my earlier post re: CC's at W11:

24-hour doorman = 3 Full-Time Employees

Here's a cost breakdown (some of this info is from this report: http://www.bls.gov/news.release/ecec.nr0.htm)

$50,000/year salary
~$8/hr burden for all benefits (50 weeks * 40 hours * $8/hr = $16,000 per employee, per year)

($50,000 + $16,000) * 3 employees = $198,000 per year

$198,000 per year / 120 units / 12 months = $137.50 per month, per unit.

And that is JUST for your doorman. That building has a ton of common areas to heat and light, plus maintenance staff, plus water, plus everything else.

The math is way off.

i agree wburgbuyer, i find it interesting that new condos w/ similar ammenities can have such different cc's. unlike a co-op there are no underlying financial issues, so its pretty much an issue of what ammenities/services need to be paid for and how many people to divide it up between, correct?

I agree with wburgbuyer. the ccs are too low to be real. I woudl assume an extra 20% to 30 %. I am a first time home buyer and afraid that this could turn into a nightmare....

Because of the greater number of units, may be able to split costs better, which can sometimes lead to lower monthlies. However, agreed this seems way too low, and it's quite likely the budget in the offering plan is far too aggressive. Take a look especially at what's budgeted for the management company, electricity, heating, and any staff on hand (doormen, superintendent, cleaning, accountants, lawyers, etc). If they seem too low, there's your first clue.

bjw,

Correct, my building has 23 apartments.

If the sponsor cannot accept a clause stipulating a 50% sold level I'd be very nervous about closing under that (aside from the financing aspect). To me 50% signifies stability and future marketability.

Whatever you do get a mortgage contingency.Also work out something where you don't have to put down 10%.That is not a rule. I had one the first time in this building and was able to get out of my contract because of the closing date. I still had to get the AG involved to finally get my deposit back. When I looked at the building 2 years ago they gave me the same story about all of the sales they were making. Then a year and a half later when I got my deposit back it turns out only 10 or 11 apartments were ever sold. Make them show you a list of apartments sold. It is required in the offering plan to make it effective. And by the way as soon as they sell all of the apartments they can they will file for bankruptcy again to avoid the common charges.

LookPied, now that I think about it, wouldn't a mortgage contingency effectively do the same thing? Banks now require a building to be 50% sold in order to lend, so perhaps it's not needed? The only instance I can think of where this wouldn't be the case is if you're paying all cash, but I doubt many buyers are doing that here.

nyc2009, why would they file for bankruptcy after selling all of the apartments? Isn't the building free and clear once the sponsor has no stake in the ownership of the building?

Nevermind, missed the key all of the apartments "they can." Sorry!

As far as I know the original sponsor of the building is still involved. They are acting like they are trying to save the project. This after the looted all of the appliances.

bjw, our broker said FHA is now financing at 35%. But I guess the financing contingency probably will work out the same.

I'm sure that the CC will go up a bit when everything is in place, that seems to be the norm. As for the doormen, looks like we are hiring some non-union folk at 14 dollars an hour. 24 hours a day, 7 days a week at 14 is 126,640. 1 full time super is 41,638 for a total of 168,278. I know some people might not like the idea of having non union doormen, but I really just want someone to sign for packages and make sure no one is making off with my couch via the front door. They list all the details for the rest of the CC, but I have no idea if it's what things actually cost, so I have no way of judging it.

wburgbuyer, I totally get where you are coming from and I think your worries are valid. Lets all try to figure out solutions, I think this place is worthwhile, no use in yelling at people in caps :) Lets see what we can do to assure our confidence in the purchase and if we don't like what we hear, don't sign.

See anyone who is coming today at 2:30 outside W-11, I'm the tall generic younger white guy in the blue coat.

The broker also suggested there are mortgage brokers who can finance at less than 50%. So I can see where they might get pushy to close under the 50% level.

Also, someone asked about lawyers, if anyone is looking I wanted to recommend my uncle in law. Guy is good, here is his info:

http://www.pdtlilaw.com/

The broker that says you can finance at less than 50% is a mortgage company that is associated with the project. The President of the company used to be a broker for aptsandlofts. They will tell you anything.

bjw
the rather large bldg going up next door to WH 11 is, I believe, the same developer as WH 11.
was it on your terrific list?

Yes the building going up next door is the same developer. They announced that building 2 years ago. They put down the foundation and stopped.

Interesting read at http://www.brooklyn11211.com/archive/2007/03/a_creek_runs_th.html. Look at map #3.

Dane,

Your comments honestly seem to have a bit of ignorance to them and I'm not saying this to put you down, but I think you need to SERIOUSLY consider your investment here. I'm not a broker, just a guy in his late 20's that did a ton of research and went through a first time buying process.

The price there is attractive but think about who you're doing business with. People who defaulted on their loan. People who let the place fall into disrepair. People who are trying to cover up issues with standing water and mold. People who took out the top-end appliances and replaced them with cheaper ones.

These are all ridiculously large red flags and when you are making the biggest investment of your life, you need to consider them all carefully.

I think there are much, much safer bets out there.

Also, I don't think this building will EVER go FHA so be prepared for that. The number of FHA approvals in 11211 has gone from 1 to about 15 and FHA tends to spread their risk. This building would present a huge risk for them and I just don't see it happening. FYI, they are not even in pending approval for FHA.

If you'd like to chat more, let me know and I'll give you my email.

JMGJAG, I think you mean 510 Driggs, right? Those are planned as rentals (50 units), though there was a rumor that they were going to turn it into a parking garage. That doesn't seem to be the case with the work they've done their recently. If anyone can confirm they're sales, I'll gladly add them to the list - thanks JMG!

NYC2009 is referring to Ross Weinstein.

Ross can't be trusted as he is directly in business with the broker trying to save a failed project.

I don't believe Ross to be a bad guy if you're dealing with him on a loan that isn't for one of the aptsandlofts buildings, but when it's one of their projects, a serious conflict of interest arises.

You WILL NOT be able to close on a new construction condo loan that is NON FHA without the building being at least 50% IN CONTRACT.

wburgbuyer- you are correct about Ross Weinstein

david maundrell (apts and lofts) is partners with ross weinstein in union square mortgage

Yes he is. I will bet he did not have his red Ferrari parked in front of the building last night.

They also do not have a Property Report that they are required to give to everyone before they sign a contract. It is required on any new construction over 100 apartments. That puts them in violation of the ILSA. The Interstate Land Sales Act. The same thing that is killing new buildings in Manhattan now. When I asked the law firm representing W11 for a copy of their property report when I became aware of it they threatened me and sent a letter to my attorney to not bring it up again.

Dane and other potential buyers, i think wburgbuyer is giving you very good advice here. there just seem to be so many risks to this place, even beyond that seen in other new developments. these risks need to be accurately quantified, and that is near impossible for a first time or novice buyer.
can you consult with a friend/relative/colleague/very experienced attorney who has a good real estate background and give them all this info and see what they think.

Thanks, kiz10014. There's a reason major banks have hundreds of people in risk management - there are many, many different areas of risk that a bank is exposed to. Dane, you're a first time buyer. You don't own other properties. You likely don't own a car. You are risking EVERYTHING on this building. EVERYTHING. 100% of your risk. Your entire financial future and, if you're anything like me, most of the cash you've worked so very hard to save up in your life.

It's just not a smart decision. I think there's about a 50/50 shot of this building totally imploding. I would NOT bet the house on Red.

Of the bad scenarios, the BEST CASE is that you spend thousands of dollars, many months and countless hours of your time getting your deposit out of escrow. Once it goes in there, it's real, real hard to get it back out.

I HIGHLY recommend that you do some serious browsing in the neighborhood. Look at buildings that have yet to be finished. Most of them are smaller projects and I can very nearly guarantee that you close on a 20-40 unit building months before you'll have the chance to at W11. Look at something like 80 Met which, while it may be more expensive, has units closing as we speak and will offer you the ability to time your move and your closing.

Let's even assume that you're able to get a bank to clear your loan with no presale requirement. Then you and a few others are going to sit in a mostly empty building that may or may not have a doorman at that point, all while watching the clock tick down on the CC reserve because the building can likely be turned over to the association at 10% or some ridiculously low number.

Life is all about risk/reward. Without risk, there is no reward. Your "reward" in this instance, however, isn't some kind of huge monetary gain (at least not for a few years) and it's not going to be winning the lottery. Your reward is having a safe, secure place to live that will serve as an investment overtime.

Look at what you're risking and see if you can get the same reward elsewhere.

PS. Just want to reiterate again, I'm not a broker, a mortgage officer a developer or anything related. I'm a guy who was lucky enough to do well and at 26 have the opportunity to buy. I didn't trust anyone except my own attorney and he was not the best source of information I could find. I learned everything I could on my own and this is an opinion that I believe is very well-formed based on my personal experience and that of others I know.

wburg buyer

Thank you for all your constructive comments.You brought up important issues. Tell me what would you consider a good investment for a one bedroom in high 300s low 400s range in w burg or other hoods. I want to buy in coming months. I really liked the w 11 apartment and will do my homework in coming days.

wburg buyer, I do see your points, but it really does sound like you are a broker for somebody else, why are you so against this building?

sara8 - I bought in this building in march 2008 and had nothing but trouble from then until the day I got my deposit back 15 months later when I got the AG involved. If anyone wants to buy in this building go ahead. Everyone will be writing about you a year from now when it turns out to be a disaster for the 2nd time.
It does not matter to me anymore because I bought in Manhattan.

sara8,wbb and i and others have very very clearly and repeatedly enumerated why we would be against a novice buyer, buying in this bldg.
its not anyyhing personal
if you were a savvy re investor and could reasonably quantify the risks and benefits, and accept losing all for the the potential payoff, i would not at all be against it

To be honest (and Sara, this might go right to your point), I don't know what other buildings you should look at. I closed back in September on my home and haven't kept up as much since then with the new properties, etc.

Here, however, is what I would consider to be a "good investment":

- Something in the $500-600/sqft range, ideally on the lower end of that
- A builder who is not in default on ANY of their projects and, ideally, has PROVEN success in the NYC market with past properties
- A seller that is willing to engage in reasonable negotations on the purchase price, closing cost concession and any other amenities (parking being the most important)
- A property that you yourself find attractive - build quality, layout, windows with good light, location, amenities, etc.
- A building with low common charges and without ridiculous things like a heated pool which will tripe your CCs over a five year span
- A 15 year (minimum) 421A tax abatement

At the end of the day, only you the buyer can make the decision that is right for you. The best way to feel confident in your decision is to compare the property you are interested in to similar ones in the area. Look closely at the finishes and the build quality (floorboard gaps, door frames, molding, all the little issues that are easy to overlook but when done well are a sign of superior construction).

If you are solely interested in W11 on price then I think you should consider whether or not to buy at all. Those prices are attractive, to be sure, but the property as a whole is unsustainable. You'll spend more over time if I had to guess.

StreetEasy is a great tool for researching properties. My wife was able to find every new construction condo in the nabe using it and we went in prepared for what we were looking at and prepared to buy. Uninformed buyers are lame ducks when walking in to a building with these brokers. Know exactly what comparable units are closing for and what else is available on the market. There are a lot of available units but in your size/price range, the selection is going to be more limited. Understand this and be willing to adjust your pricing accordingly.

To close it out, be WELL INFORMED, be PREPARED, be READY TO WALK and be even more READY TO NEGOTIATE. Do all of this and you will make a good decision. Good luck!

I have to add one other thing:

Few, if any, first time buyers understand just how expensive closing costs are. I think that in this market, your key negotiation should not necessarily be purchase price (though this is important for future comparables and sale), but the seller’s willing to cover some or all of your closing costs.

For my mortgage, which was over a half-million dollars, my closing costs topped $50,000. I had negotiated a concession to pay for what I thought would be most of that but in the end, just didn’t cover it all. This is CASH OUT OF YOUR POCKET. Forget 10% vs. 20% down, here’s 10% that you’re going to spend, in cash, and never see again. That’s it. Bye bye.

I’d rather have my mortgage upped by that amount, keep the cash in my pocket and pay down some of the principle immediately or over the short term.

In this market, I think 4% of the purchase price is reasonable. That would be $20k on a half million dollar unit. It won’t get you all the way there, most likely, but it will keep twenty thousand dollars in your pocket. If I had to pick between a $20k price reduction and $20k in cash, I’d take the latter.

wburgbuyer, great post. Any buyer needs to recognize that no matter what, no one is truly looking out for you other than yourself, and with so much money at stake, you should put in the legwork to make sure you understand all the ins and outs here. If you're not willing to do that, you should question why it is you want to own.

wburg, your closing costs were 10%? That's almost unheard of. In my experience, they're usually around 5-6%.

My mortgage was over $.5mm, I didn't say how much over. I also made the decision to pay a little over a point to bring my rate down below 5% which I thought to be good value overall. In fact, I still feel a bit lucky on that issue and think we "pulled one" on the bank. They were offering .25% for a point and .75% for a point plus. It made sense for the long haul. Absent the points, my closing costs would have been around $40k.

Advice is only for those ready to hear it. But can you imagine the days when people didn't have StreetEasy to alert them to reg flags before buying into a building? Well, I take that back. A lot probably still don't...

I think overall space at this price is a great deal. But, the folks that are involved in this project are all interconnected and have a large stake in getting this to work. It is both a pro and con. They all have lost an enormous amount according to the offering plan, which I have.

To be in this building one need to be rather risk tolerant and have time to wait out the building’s completion. It still needs some work and I think they will get it done.

However, one thing that particularly bothered my about the plan was that the sponsor would not entertain any punch list items. The terms in the offering plan are “as is” which suggests if there are issues you will need to have a third party involved to make repairs. The sponsor has legally protected himself from maintaining the property.

I think this is a better “investment” than it is a “home purchase.” I did have an offer accepted and would rather rent my space than to live here.

This is who you are giving your money to Isaac "Yitzchok" Schwartz.
http://www.villagevoice.com/2008-05-13/news/home-alone-mdash-with-medicaid-fraudsters/

How do you feel about that?

Hey all, just got back from checking out the building in the daytime and meeting with some of you. Building looked good in the light, overall was happy with what I saw. It was great talking with you guys as well, I think everyone involved in the building is very excited by the prices and space and much much less excited about oil, mold, renters and shady contractors and brokers.

LAIL: Very cool find! Am I reading that wrong, or does the map say our building is a ball of oil repellent?

nyc2009: You should have opened with the fact you were a previous buyer! Give us some details, give us names of anyone you dealt with and what went wrong, that would be a huge help. Anyone else know anything about property reports? Was this with your first buy in May that you got yelled at by the W-11 attorneys? Who specifically sent you the letter? Again, I'm a huge fan of details so that if I come across them I have some back story.

wburgbuyer: You know my whole life! Who is this reaaally? Mom??

Couple things that I got answered:
1) CC of unoccupied apts will be paid by the owner. However, if he goes into foreclosure or bankruptcy, it falls on the homeowners. There are some laws and things in the contract that help us though. I will check into those details.
2) Checked out the roof....waaaaay better than I thought it was going to be. It's massive and has amazing views of the city, Mccarren Park, Williamsburg Bridge, etc. Not sure how the roof will be sectioned off though.
3) Went to the basement, some of the storage units, the gym and the "yoga room" and 1 of the basement levels of a first floor apt. Everything looked fine, but unfinished. I didn't smell or see mold. I was snooping around, but couldn't see any damage. That said, I think it is still a big concern and we should have someone look at it.

I want to list the main concerns people have and see if we can work through them as a group. If we can, huzzah, if not we can move on. I'm a fan of not making this a fight or emotional. This is a big decision that needs to be handled, not yelled about.

1) "The Evil Plan" - Developers drop prices, sell 30-50% of the units and put up the rest for rent. Or they go into foreclosure/bankruptcy.

2) Oil - The membrane and the report given to us in our offering plan that states Kris Almskog from P.W. Grosser Consulting did tests on Spill #06-09092 and thinks everything is good now.

3) The Article - http://www.rew-online.com/news/story.aspx?id=752 . Summary: The owners are bad, stole appliances, mildew in the cellar, water damage, yelled at a lady.

I will post again with some ideas, lets all contribute and see if we still like this place or not. I will also say that I think a lot of questions will be answered when my lawyer gets the contract on Monday.

Overall, I'm sure the people that built this building did not do so thinking how good they would feel giving homes to people in Williamsburg. I'm sure they are jerks that wanted to jump on the real estate bandwagon with everyone else. I'm sure this description fits most builders.

1- This is a hard one. We take risk being the first buyers and getting deals and our pick of the litter. This is what I am most worried about. The broker told me today they had 40 accepted offers, who knows if this is true and I'm not sure there is a way to prove or disprove it. Let me know what you think on that though. The building seemed to have some buzz on it today with people looking at apts and buyers like myself coming in for a second look. I think the best solution here is to have something in our contracts that protect us in some way. This will be a conversation to have with my lawyer.

2- I have my top man asking his top people to look into this as per our conversation this afternoon. We are seeing if we can look into the actual case filed with NYSDEC. It may have been a random company hired by the owners, but I take some solace in the fact the NYCDEP and NYSDEC had to review and approve it. Not case closed though. That oil map posted earlier looks promising too. On topic, how can we look into the membrane?

3- I'm going to get back in contact with my inspection guy and see what he thinks about this specifically. I want to know if something like this happened, "The suit alleges that water has been collecting in the fallow property’s basement since at least January and has caused damage, including mold." Would there be any signs of it now? How would we know if it is true or if it has been cleaned and is safe now? I will see what he says and get back to you.

Any more concerns? I'm going to see if we can answer all of our questions and I will plan to move forward until the last minute, then I will make my decision if I want to go forward.

fredd - I feel that Brad P and George Clooney have nothing on Schwartz and Rosenberg. They're professionals and I don't doubt their ability to pull off this caper with misdirection. What form that will ultimately take is part of the suspense of watching how Oceans, I mean Warehouse 11 will unfold.