oh don't you just wish you bought at the height of bear hysteria?

Interesting point hsw.

I should qualify what I said by saying spring 09 was a good time the buy what I bought. As hsw9001 correctly points out, buying a hyper inflated condo is perhaps still not a very good idea.

Spinny: your apt is unique enough (hope you don't mind me harping on this point), that even back in mid '99, I am reasonably sure that one could not buy it for the average/median price/sqft.

And all, even Rhino, seem to think that '99 was a good time to buy - so barring the apocalypse, you will be okay. And by apocalyse, I mean Mad Max. Add to that the fact that apts are simply not fungible. How many times has a place like yours come on the market?

Return on my rental? How's the return on your car? It's a consumption, not an investment. What we are talking about here is your purchase, which has treaded water despite its consumption value even if it goes up 3-4% every year as it has since your "bottom". What I don't understand is your gloating over being flat when all the other options sharply up.

spinnaker1, if you don't mind the asking, where did you buy (sorry if I missed this earlier)? I think the date of purchase is over-emphasized here - at the time spinnaker bought, there were still bad deals out there, of course. It's just that in a market like the one we saw pre-summer, your likelihood of finding a desperate seller was greater. Likewise, I'm sure there were bad deals even at widely-recognized "bottoms." This is obvious, but I get the impression some are completely ignoring the vicissitudes of individual buyers and transactions.

Here is a snapshot of what would happen if you bought at the height of bearishness and what it is worth now. This is at the Heritage at Trump on Riverside Blvd:

01/29/2009
Previously Listed by Corcoran at $7,495,000.
08/16/2009
Corcoran Listing sold. Last priced at $6,250,000.
09/09/2009
Listed by CORE at $5,950,000.
11/20/2009
Listing entered contract.
12/08/2009
Listing sold.
12/08/2009
Sale recorded for $5,250,000.
12/18/2009
Listing entered contract.

I would add that a lot of the "new" stuff showing up on my search parameters in the last week is actually old stuff that was priced higher last spring. Might have been overpriced to begin with but just sayin.

It appears the fabled shadow inventory may be starting to peek out of the loch. Anyone else seeing that?

I think that one's a data error, apt23. No 8/16 sale shows up on either ACRIS or SE's sales for the building. Maybe Corcoran incorrectly tagged it as sold?

Yup yup Malthus

UWS last 7 days: 48 out of 53 new listings are indeed new listings (i.e. virgins.)

spin, not trying to be contentious, but how the hell can you tell? the brokers seem to have reverted to not supplying apartment numbers with a bit of zeal. and turning ph's into numbered floors, hyphens, etc. old tricks, but i had noticed a decline in such activity and the past few days it's seemed rampant. particularly elliman.

ionada: right. misread it as sold. some kind of error. but then, if the 7.5 mm was just an ask, it was very optimistic.

You are right AR, it's not scientific. And malthus, I didn't intend to discredit what you are seeing in your search.

We can only hope UD 2.0 will lead us all out of the darkness.

No worries. Just speculating based on my unscientific samples. I asked for feedback after all...

Sure I wish I bought stocks...but why would I wish I bought Manhattan real estate? Its flat at best. I love the board bulls taking a real estate victory lap for the stock market. Its like Printer... I knew financial stocks were a buy, so I bought a coop...and now I am ummmmm flat and nervous.

The premise of this thread is so fucking stupid. There isn't a shred of evidence that prices have risen since March/April of last year..and there is still plenty of inventory.

So a "fuck no" for captain Nintendo then?

Maybe you can help me understand you victory lap for real estate when it hasn't risen. Its one of the more creative lines of bullshit I have heard. You could almost argue the opposite...that for all the strength in the stock market...why have coops done nothing off the bottom?

I don't see anyone doing a victory dance. What I do see is a lot of vociferous BS day in and day out about the sky falling.

Anybody seriously looking for market priced properties knows that there is a lack of good inventory right now. And sellers are more confident. That wasn't the case last spring.

What's the matter? Don't you think the SE crowd can handle a good story for a change?

I don't mind a good story...but its about the stock market. Shouldn't this be Steve's thread where he brags about holding on to his emerging markets equities?

I think some of you like to pretend that calling Manhattan overvalued and predicting it will continue to fall is the same as calling the economy broken or predicting the stock market will continue to fall.

"Sure I wish I bought stocks...but why would I wish I bought Manhattan real estate? Its flat at best. I love the board bulls taking a real estate victory lap for the stock market. Its like Printer... I knew financial stocks were a buy, so I bought a coop...and now I am ummmmm flat and nervous"

lol. well done, Rhino.

"I think some of you like to pretend that calling Manhattan overvalued and predicting it will continue to fall is the same as calling the economy broken or predicting the stock market will continue to fall."

Bingo. Its also the fundamental mistake underlying many/most of the bull strawman arguments. "ha, the world didn't end, so...." Wait, noone actually said that right. No, never..

" lot of vociferous BS day in and day out about the sky falling."

whoops.

"Wait, noone actually said that right. No, never.."

Exactly. Just like you were "burned at the stake." No hysteria whatsoever. Whoops.

Can we stop for a moment and reflect on how stupid it is to take a victory lap for a market that continued to drop? I mean its so fucking stupid.

Rhino
Pretty sure it's obvious to most.

When I first saw the thread all I heard was..."I got a geh..geh.geh..geh....good brain."

About the only thing I can predict with any degree of accuracy is the death of a thread once somewhereelse and Rhino start high five-ing each other's ignorance.

Rhino, not sure why you're so offended. I would hardly call it a victory lap, even if I don't think the tone of the thread title is in great taste (and you could say that about a lot of threads/posts on this site). Of course RE is not up in this market. I haven't read every last word here, but don't think anyone is claiming that equities were not a better investment. Dare I say it though, but I don't think spinnaker was buying a pure investment - he was buying a home to live in. If he were renting it out, that's a different story. I'm guessing the hedge funder in you might disagree though.

spinnaker, usually the former is just high-fiving himself, so consider this an upgrade.

Maybe you should high five Printer on all the bank stock he didn't buy...

What I think is funny about this thread is that the stock market rose, the economy continued to lose jobs, and Manhattan real estate plateaued at -25% or -30%.... So what offends me is the wholesale lack of logic in the premise. Also, it sort of says 'Manhattan real estate bears were wrong because the S&P is up'...

"Check it out. Dustin Hoffman, Rainman, look retarded, act retarded, not retarded. Count toothpicks to your cards. Autistic. Sure. Not retarded. You know Tom Hanks, Forrest Gump. Slow, yes. Retarded, maybe. Braces on his legs. But he charmed the pants off Nixon and he won a ping-pong competition? That ain’t retarded. You went full retard, man. Never go full retard.”

I don't regret missing the apartment that I was bidding on, and am not sure that we have reached "the lows" for this market. There are still over 7,000 listings available and as Urbandigs pointed out, more than 11,000 listings have been removed from the market in the past 6 months. I'm already seeing them being re-posted. If the inventory does climb to high levels, how much of that pent-up demand from last year has yet to be satisfied?

truthskr, I will now picture you as an American actor portraying an Australian actor portraying a stereotype of an African-American. Good stuff.

"Also, it sort of says 'Manhattan real estate bears were wrong because the S&P is up'..."

I don't think it says that at all. That's a bit sensitive. There's no bullishness here, just highlighting that for a few months there was unusual opportunity that was largely unrecognized by a certain contingent. Nothing wrong with that.

Again, the opportunity was in stocks, not in real estate. That is what makes this thread so laughable.

"Last spring and summer, a time of rising record unemployment, deepening recession and tight credit, when the bears were all clambering for a seat on the bandwagon, something strange was happening - people were buying Manhattan apartments in record numbers"

See this...this is about real estate. This is a victory lap over what....volume? Ha.

Not just volume, but volume at significantly lower prices on average. Why are you thumbing your nose at that?

BJW
Ok Rhino beat me to it.
And I'll repeat..."Never go full retard."

truthskr, who you callin' retarded?

Its great that Spinnaker bought...but prices aren't up...and there appears to me to continue to be plenty of selection. Doesn't the congratulations come when he sells it at a profit. The self indulgent rant...I mean its sad.

BJW
The opening lines of the thread, not you luv.

i like where this thread is going... FULL RETARD :)

Dear Streeteasy readers, I bought an apartment in May. Aren't I awesome? PS: Look at that S&P!

PPS: You could never find my apartment in the market today...because I bought it.

{pointing gun at Rhino} "Say it with more FEELING."

(I can quote tropic thunder all day.)

"Admittedly not all of the proponents of further downward pressure for Manhattan prices are blind to reality"

Whats the reality, that you bought an apartment, and its worth about the same six months later? And this is to be....applauded?

http://www.youtube.com/watch?v=FrqbcB5SekY

RETARD the musical... lets stay on Tropic Thunder.... fergie is hot.

Tugg Speedman: “There were times while I was buying in May where I felt...”
[pause]
Tugg Speedman: “...retarded. Like, really retarded.”
Kirk Lazarus: “Damn!”
Tugg Speedman: “In a weird way I had to sort of just free myself up to believe that is was ok to be stupid or dumb.”
Kirk Lazarus: “To be a moron.”
Tugg Speedman: “Yeah!”
Kirk Lazarus: “To be moronical.”
Tugg Speedman: “Exactly, to be a moron.”
Kirk Lazarus: “An imbecile.”
Tugg Speedman: “Yeah!”
Kirk Lazarus: “Like the dumbest mother f$*%&r that ever lived.”
Tugg Speedman: [pause] “When I was buying.”

Sorry, this backlash stuff smacks of a Little Leaguer's dad throwing a tantrum because another kid won an MVP award, even though that kid "only made one good play all season." There are better things to be offended about. This is harmless.

w67th, Fergie?!?

Has a good play been made?

Rhino Also, it sort of says 'Manhattan real estate bears were wrong because the S&P is up'...

Rhino, I get this every time I have a discussion in public about my thoughts on RE. You get the "record bonus" retort, the "volume" retort. That has literally nothing to do with my argument for the bottom not being in. I am talking credit and CRE failure, possible developer failure, unemployment, excess inventory --- all the things that created extreme RE recession in other cities that NY has not yet felt the effects of. Jeesh. It is more than possible. Yet people think I'm crazy because the stock market is up.

I look at a building like 200 Chambers - every apt was bought at around $1700+ a square foot at peak of market in 2007 when you only needed 10% down. There has only been one sale there in 2009 (at -12%). It is conceivable that a big chunk of the building is underwater. Yet because there are no firesales there, no one there feels it. It only takes a few people who have to sell at seriously depressed prices to establish a low value for everyone in the building. So the fact that things are alright now (while no one has to sell) does not mean that people there are not vulnerable. Just like in other cities, when it starts, there is a cascade of prices in the building. Then multiply that by more and more buildings and you have and mini version of Miami.

Truth: Never go full retard is one of the most prescient comments on acting and life that has ever been uttered in movies. One of the best lines ever. thanks for the memory.

Does it even matter to you? It's Little League. That's the point.

bjw... yes, fergie in certain angles...

FULLLLLLZZZZZ RETARD.... Now I gotta buy that movie in itunes..

Apt23...What you just wrote gets to something I mentioned here somewhere a day or so ago. Because re is not a liquid market, and because it is not exactly fungible products, it takes a while for the state of the market to sink in,and it certainly something that can be caught in a snapshot. I think plenty of people who haven't seen sales in their building at new prices don't realize what is going on.

Moving on..apt23, I totally get your fundamentals argument that the bottom isn't in. But what's your view on how long this plateau or whatever can last due to govt interventions, lemming mentality people who finally see an opportunity to buy, or whatever. AR talks about 2012 sometimes.

I wouldn't touch any condo in nyc for 1000psf or more, but for 700psf in manhattan or 550psf in Wmburg, it may not be sensible yet but it isn't utter insanity on the level as seen at the peak. w11 in wmburg is selling at 550psf, and i guess it would have rent - cc (350) of say 1800,maybe more...

it is not a snapshot market, i meant to say

Jim: I have no idea how long it will take. I think if more big developers default on big condo buildings in manhattan it will take at least a year (going by LV and Miami) for the ripple effect to set in. Other than that it is hard to draw comparisons because the govt didn't bail out those other cities like they are doing now so there is no roadmap. I am beginning to think I am the only person in the world not getting a check to prop up the market. I don't think it will be too long because the economy is starting to right itself -- which doesn't mean NYC RE is not overvalued. I think we will see the end when it hits the magazine covers etc. By then it will probably be safe to buy but you will have missed the upside. It is a conundrum and I haven't got a clue. That is why I am on this board. Maybe I'll find someone here who knows.

I'm glad you asked for me apt23. I'll let you know way way in advance.

ok 67..would it be nuts to buy a bit of a view of wmburg bridge, small concrete balcony, decent wmburg location,fairly decent new condo at say 575psf one-bedroom for about 425K (lets say 600sf plus small balcony)...in lieu of paying 2000+ rent for the next year while i wait to see where the market goes (and gives me more time to search); the 2000+ per month rent is being paid out of cash that won't generate 2000, so it's kinda like paying 2k a month for an option...

i dont care much if i can get the same thing for within a range of say 50k within a year or so....but, that cuts both ways...you could view the option premium as an additional discount for buying now

[if i was asking..do i pay 1000psf for a crap condo in chelsea i wouldnt even ask because i wouldnt even consider it ]

my numbers somewhat screwed up bec/ not clear what the sf is...they say 697 x 550 for 385k, or 50 k more for a higher floor..but the sf seems to me to be about say 600

w67 -- alight. i'm countin on you. you're doin great so far.

Jim, how are you paying $2000/mo for on option? Is there such a thing as a 0% mortgage and a condo w/zero taxes and carrying charges?

im saying..if youre going to buy for cash, and your alternative is to invest at zippo these days while you wait to buy, then the rent is like a call option premium sort of....

I have a new rent/buy analysis. Lets assume your opportunity cost on the downpayment is the same as the mortgage rate. This helps, because the analysis is not skewed by the size of the downpayment. Also assume the tax rate on investment (in the rental case) is the same as the tax rate for the interest deduction. Now tell me what is better, a $450k apartment with the carrying costs and taxes or the $2000 in rent. Also be sure to factor the abatement.

[and im not a moron...i know money market is not equal to risk of a condo...the idea is that i have some money set aside to buy a condo, and the question is when to invest it...]

{it would be a less urgent question if there was some yield in sometihng on the short end of the curve]

The rent is the option premium or the rent minus the carrying costs & taxes?

Further, you can call it zippo, but the fact is an ultra short bond fund will yield around 3% and its much less risky than a condo in Williamsburg. After taxes thats $700/mo...which is very relevant to a rent buy decision that involves a $2000 rent equivalent!

FASSX is a good ultra short bond fund.

Jim, you seem reasonable. It sounds like you want to convince yourself to buy. Just do it. However, do not look for the math to make it work. The math to make it work just doesn't exist at this time.

The valuation on stocks is better up 70% from the bottom as the valuation on Manhattan real estate is 25% off the peak. Its human nature to think that real estate here is a bargain and stocks are dangerous right now. The fact is real estate is still scarier here because it way above normal valuation...and real estate in Williamsburg is riskier than putting that $450k in the stock market. This assumes that you are willing to hold that $450k in the stock market, not look at the value for the same period of time that you expected to do so for the condo.

Id have to look into that fund. Generally, the short end isnt yielding 3%.

Nah...Id like not to buy, but I don't want to take capital risk to yield enough to pay rent because if the capital risk goes against you ,and the re asset doesn't also go down, then you dont have enough to buy from that re pool you've established.

If you buy a bond of duration less than 30 yrs...then its likely the real estate falls more that the bond you own. The bargain if this real estate market is a huge psychological illusion. What is the cash return of your cash purchase (rent - carrying cost) / purchase price....3%? With 30-50% risk to the worst case?

jim: I haven't seen this apt but this is a great, great neighborhood. The park up there is great. Great restaurants and food shops. Near Columbia. Quiet and hip. And this apt has outdoor space. Park yourself here till Oct. ( if it is decent). I bet we will have a better indication of the market by then.
http://streeteasy.com/nyc/rental/608643-rental-253-west-101st-street-manhattan-valley-new-york

I hear you...but I need a place to live. I am looking at "where to live at what cost" as separate from stock market, gold, commodities, etc. Living costs me say 2000+ per month in rent.

What I meant is that if every month investment yield is less than rent by say 2000, then that is like something i am paying per month not to own re now (to be short re).

I shouldnt have said that 2000 per month was a call option premium, sorry, Assuming in say one year I go buy something in the interim by paying rent I was equivalent to short the call option, long the put I suppose.

The problem Jim is that whether or you call it call premium or not you have to deduct condo taxes and carrying charges from it. What is it after that? Jack shit.

Now deduct 3% x (1 - your tax rate)...now its negative.

What is the cash return of your cash purchase (rent - carrying cost) / purchase price....3%? With 30-50% risk to the worst case?

If say 2000 per month in avoided cost requires investment of say 500,000 then the yield is like 4.8%. By going into anything but very risky investments can't approach that. NOw, obviously,if this was sept 2008, that would be a fool hardy analysis, but things are not so clear as before.

Im only talking buying at say 600 psf or less,but i am not convinced. just thinking

There are a $1000/mo of charges associated with this presumed Williamsburg condo, no? You want to risk $450k because you don't like not earning $12k on your $450k investment...? Huh?

I am going to rip my hair out if you keep calling it the whole $2000.

Are you telling me the rent on a one bed in Billyberg is $3k less $1k in charges? Honestly what are you talking about?

Your thinking kind of sucks. I am out.

Didnt mean to upset you. You can construct another hypo if you like. The common charges are 350 in the place i had in mind.

What are the risks of the fund you mention at 3% yield..because seems high for short term

spin...i agree with you TOTALLY...late spring/summer of 09 was the 'perfect' time to buy in manhattan......you were smart to pull the trigger....unfortunately i didnt.....

Today I got an update in my SE saved sales. One sold, 3 were taken off the market, and the rest have prices cuts. Prices are going down.

"Can we stop for a moment and reflect on how stupid it is to take a victory lap for a market that continued to drop? I mean its so fucking stupid."

Totally disagree: it may be the only opportunity to do so, so why wait and miss out? lol.

"Today I got an update in my SE saved sales. One sold, 3 were taken off the market, and the rest have prices cuts. Prices are going down."

Mim: I don't think it's fair to use you list as representative of the Manhattan market as a whole, do you?

MHill..why regret it? You can buy for the same price right now.

Listen Jim good luck. Last I checked condos had both common charges and real estate taxes, and $350/mo is lower than any figures I have ever heard for a one bed. FASSX in the worst of the crisis went down 2% peak to trough. I think you are thinking about your decision in the wrong way, lets leave it at that.

Why should I pitch an ultrashort bond fund to you when you've already decided numbers and risk don't matter to you and you'd rather buy and earn 2% on your money and risk 30%+ downside.

zzzzzzz...another 15% down in Manhattan Real Estate is in the bag...this thread is a silly waster of time.

30yrs, some of the listings saved were condos in the UWS and houses in Brooklyn, not only my usual Harlem stuff.

mimi..ive been too lazy to ever save anything...i guess i should, so i can get such feedback

Rhino, I am certainly no bull on nyc re, I haven't decided to buy. I'm just looking what to do when cash yields so little. It was a nobrainer not to buy a year or so ago, not quite so much now, if talking about about something that has fallen quite a bit (in particular i was looking at something in wmburg). In any case, it's unfortunate you feel compelled to say "your ideas suck", "you've decided to buy", or whatever. To me it's tedious and offputting about the site in general.

Rant: what bothers me more than anything on se is not hsf, or the mouse guy, it is the group think, and the ridicule by individual posters on anyone not fitting their view, I worked in financial product development where the whole idea was generating alternative scenarios, so when people here can't deal with the slightest deviation from their view it just seems sad and boring.

rhino.....cant find similar prices right now vs spring/summer 09in the buildings im interested in.......sellers are not as 'negotiable' or 'desperate'......and the few buildings im looking at had 4 to 5 apts available in summer 09....all sold now...so im hoping that in the coming weeks/months that more apts will come onthe market......seems like a slow start to the year...not much inventory YET..............2010 should be an interesting year for nyc real estate.

Jim you still havent told me the great cash yield (in terms of the difference between rent and carrying costs + real estate taxes) that you would earn by buying. If its a condo, I imagine its 2% and change. This is the problem. When I say thats a poor yield for the risk, you say 'oh well I am not thinking of it compared to other investments'. So do you understand why you can be frustrating? On the one hand, you recognize its a risky investment. On the same hand, you only want to compare it to a money market fund with a 0.5%. So yes sure, if you refuse to compare the investment to anything but a money market fund, yet you recognize its much more risky...then you are leading yourself to a conclusion. And frankly, I think its an easier decision today than two years ago...rents and values have fallen a similar amount, so cap rates are similar and momentum is pointing down and the economy is in the tank.

Jim, I think if you've got a 4.8% net rent yield, that's a go. I don't know the Williamsburg market, but in Manhattan places costing $500K cannot even command a $2000 rent, and when you take out expenses you're at $1000 or less. I guess I'm doubtful of the $500K place that rents for $2350 with only $350 in expenses. Insurance alone will be $100-200 a month, and it sounds like taxes are abated at the moment but will kick in soon enough (i.e., it's a one-time discount), and the common charges are probably going to spike as soon as the developer sells out.

Can you point us at the building?

In terms if "what about my cash", putting money in a home ties it up for 10 years. As such, comparing to overnight yields (which are being held negative in real terms under extraordinary circumstances) is not fair. You should at the very least be comparing against 10-year yields which are closer to 4% because in your comparison, you should tie up the rent money for 10 years as well to make the comparison fair.

On the higher risk of a mortgage vs treasuries, I do think that sometimes the risk is overpriced. For example if in today's market in NYC you put 50% down and the bank charged 6% on the rest, then I think you'd be better off doing all-cash since the 2+% premium way high compares to the risk.

That's the problem...there is no such thing as a one bed condo with $350 in taxes plus charges.

And getting 4.8% temporarily doesn't compare favorably to a muni bond portfolio with a 10 year duration...Nor have we factored the cost of getting into this condo and getting out of it.

Thanks Rhino for some reasonably civil posts ! And Inonada. Guys I'm really not dumb, promise. I'm just toying with what I consider something of a dilemma And I do welcome thoughts. And maybe I should/will drop my potential idea of buying, and look harder for better yielding but not too risky assets. But let me say what I was thinking, and show you the condo that brought this up:

I know it's not fair to compare a money market to a condo,if you were looking at an investment portfolio. The dilemma is that x amount is set aside to buy housing. Let's say 500k. If invested short term then not enough yield (after tax) to pay rent (say 2000 needed for something liveable). If invested longer term, or in riskier higher yielding investments, yes that could be used to pay rent, but what if capital depreciation ocurrs, and what if at that same time rents stay the same in nyc, and prices stay flat...then my housing pool won't pay the housing cost and no longer will buy something.

Buying in nyc at 1000psf with cc and taxes of say 1000$ wouldn't solve my problem either, I realize.

What brought me to think about this is the following building: warehouse11. There are higher floors available for 50k more but not yet listed for sale, so taking the one listed on the internet: 2J, 369K,cc 319, taxes 25$ (15 year abatement). I don't know what it would rent for, but it's a pretty nice, new building in a decent location, so I would guess 2000$ or so. (there are higher floor units with views that sell for like 50k more, or 75kmore, and I don't know how much those factors effect rent).

Maybe it would rent for 1800. I would doubt much lower than that, at least what I've seen renting for such low prices are older crappier than this place, but I'm not sure. Hard to believe a new buidling one bed that size would be 1500....dont know

Obviously, by the way, if it dead certain that prices will decline by a huge amount, then no buying now scenario makes economic sense. I',m pondering how certain I feel about that. I was going to wait a while to buy, and probably will, but there is a point at which prices could be low enough to make me buy, and w11 was sort of getting there.

you said it----it all depends on each individual's view of where the market is going, not where it's come from. and prices ultimately will reflect incomes and other housing alternatives (which, of course, are also a function of incomes) not what they used to be.

jim, why? it's doubtful that they will raise prices over time. why don't you just wait until the first 50% close? if they then feel nervy enough to raise prices, wait until a similar development comes along that doesn't, or maybe w11 will have a suitable unit toward the end of sales, for whatever reason, that they will then lower prices even further on to clear the building.

why take the risk? i get that you want certain things, but it really shouldn't be so hard to find. even if you were to say you'd be comfortable living here for the next 10 years, i'd still say wait until a large percentage has closed. it's not just what the market rental rate would be now, it's how many bodies will want that rental when you're ready to rent. and i don't think you can predict that now with any sort of certainty. where's the fire?

Plus Jim there are so many risks associated with that building. Built on an oil waste with a membrane thrown over it. Even if there are no health risks associated with it now, there may be later and the building could later face a cesspool of lawsuits. There is a reason the price is low and there are many reasons prices could go lower. If this was a fabulous apt on sale by a distressed buyer which provides a one off opportunity that is one thing. But this is not that case. There are sure to be other opportunities in this building and other buildings nearby. At the least, talk to the community worker who is spearheading an effort to clean up the oil to find out what is what.

Jim:
Here is a scenario in which what you are doing can work.
1) Locate a multifamily property 3 to 4 units at a price that is attractive w/ no outstanding repairs needed
2) secure a FHA loan with 3.5% down ~4.5 to 5% 30 year interest - you or a family member probably need to use this as a primary residence, or at least designate 1 unit as your residence to get the best loan terms
3) check whether your rental income (net) can cover the mortgage or close to it -- if you do indeed live in the building then you need to consider that value in this calculation -- pay yourself the rent.

If you can make all 3 steps then there is little downside risk for what you want to do.
Most of the posters here speak hypothetically and have high maintenance, high property tax, expensive condos or coops at the back of their mind.

I know several people who have managed to do this recently, and have capitalized on the price declines that occurred last year. The problem is that many people are now looking for such opportunities and there are not many suitable properties.
I don't know about any areas outside Manhattan, but suspect that Brooklyn may indeed have much better opportunities.