So I've found a 1br in a full service doorman building in midtown east/murray hill. Before any chastising about that 'hood' hear me out... It's a 650 sq ft alcove studio selling for a tad over 300k. Close to top floor of a mid rise, facing east with lots of light. It's a coop with a relatively friendly board. What's the catch you may ask? The physical structure of the apartment is fine - floors,... [more]
So I've found a 1br in a full service doorman building in midtown east/murray hill. Before any chastising about that 'hood' hear me out...
It's a 650 sq ft alcove studio selling for a tad over 300k. Close to top floor of a mid rise, facing east with lots of light. It's a coop with a relatively friendly board. What's the catch you may ask? The physical structure of the apartment is fine - floors, electric plumbing etc, but it needs a renovation. At the very least, new kitchen, bathroom needs updating, new HVAC needed, and perhaps a wall to make it a 1br along with all the other cosmetic fixes. Similar apartments have sold for 450-500k in that building. Knowing it'll need a fair amount of renovation, and not sure if I'd live in it and get utility or fix it up and sell it, do y'all think the juice is worth the squeeze here?
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Response by saiyar1
over 14 years ago
Posts: 182
Member since: Jun 2010
Off the top if ny head, I'm cynical and would say there must be a reason there's that much of a gap in pricing. Hopefully someone experienced
Can make a rough estimate of costs. But also selling costs a bunch so I'm not so sure that there's much juice after all that. Now if the coop board is very liberal about the subletting (unlimited) then it may be a nice time to pick up an investment property and renovate as frugally, but still nicely, as possible. Crunch the numbers.
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Response by NYCMatt
over 14 years ago
Posts: 7523
Member since: May 2009
First you say it's a one-bedroom then you say it's a studio.
Which is it?
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Response by kylewest
over 14 years ago
Posts: 4455
Member since: Aug 2007
Buy to use it -- not to flip it. Smart money says you won't make enough on a flip to make it worth it when you figure in transacction costs, carring costs during reno, broker's commission upon resale, flip tax if any, etc.
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Response by soccer_guy
over 14 years ago
Posts: 3
Member since: Sep 2011
@NYCMatt - sorry, should've been clearer - it's an alcove studio as it stands now, with a wall, would be a decent 1br layout.
I was cynical at first as well, it seems the person who lived there died, and it's being sold by a family member out of town who is of little interest other than settling the matter. Like I said, structurally, absolutely fine - cosmetically, not so much. My minimum cost of renovating is at least 60k, and that doesn't take into account the loss from carry, the turnaround time from dealing with a coop board that requires alteration agreements signed off by engineers/architects and possibly building dept. If there were unlimited subletting, probably a no brainer as saiyar1 suggested.
There's certainly better investments out there in terms of maximizing PV, but this is the closest I've ever seen in the city to a 'deal' albeit one that requires a tie up of capital for a while, along with dealing with far too many people and agencies. Too many unknowns I'm thinking.
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Response by sma10022
over 14 years ago
Posts: 72
Member since: May 2010
Buy it to live in. Invest in a reasonable renovation, enjoy for a few years them hopefully enjoy the equity when you sell.
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Response by jim_hones10
over 14 years ago
Posts: 3413
Member since: Jan 2010
where is inododo to put this cowboy in his place? you can use dodo to rent something equivelent for what it costs someone in suburbia to fill their tank every week according to him.
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Response by bramstar
over 14 years ago
Posts: 1909
Member since: May 2008
Whatever you do, do NOT try to flip it--you'll lose money that way. Market is still too soft for successful flipping and besides, most NYC buyers would want to renovate to their own tastes so they'd likely not want to pay a premium for your work.
Remember too that even if you erect a wall for yourself, you will never be able to sell this studio as a one-bedroom. It will remain an alcove studio forever (unless, of course, you wind up purchasing an adjacent apartment and combining...). Bottom line--if you love it and plan to living in it for the next several years, then sure--go ahead and buy. But don't get it just because you think it's an investment. It is not.
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Response by NYCmodern
over 14 years ago
Posts: 100
Member since: Dec 2011
It doesn't sound like a good deal only because everything needs updating. So I would only recommend buying if you actually want to live in it.
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Response by soccer_guy
over 14 years ago
Posts: 3
Member since: Sep 2011
There's two angles:
- Keep it, treat it as a 'fixer upper', renovate, and get utility from living there. If there's updside, great.
- Attempt to flip by renovating and carrying for however long it takes to renovate and sell. Conservatively assuming 60-70k in renovation costs, dealing with negative carry, and hassle of selling a coop in a not so great market, probably not too much value I'm thinking.
Seems to be the former *may* make sense. The latter, there's better investments out there.
Off the top if ny head, I'm cynical and would say there must be a reason there's that much of a gap in pricing. Hopefully someone experienced
Can make a rough estimate of costs. But also selling costs a bunch so I'm not so sure that there's much juice after all that. Now if the coop board is very liberal about the subletting (unlimited) then it may be a nice time to pick up an investment property and renovate as frugally, but still nicely, as possible. Crunch the numbers.
First you say it's a one-bedroom then you say it's a studio.
Which is it?
Buy to use it -- not to flip it. Smart money says you won't make enough on a flip to make it worth it when you figure in transacction costs, carring costs during reno, broker's commission upon resale, flip tax if any, etc.
@NYCMatt - sorry, should've been clearer - it's an alcove studio as it stands now, with a wall, would be a decent 1br layout.
I was cynical at first as well, it seems the person who lived there died, and it's being sold by a family member out of town who is of little interest other than settling the matter. Like I said, structurally, absolutely fine - cosmetically, not so much. My minimum cost of renovating is at least 60k, and that doesn't take into account the loss from carry, the turnaround time from dealing with a coop board that requires alteration agreements signed off by engineers/architects and possibly building dept. If there were unlimited subletting, probably a no brainer as saiyar1 suggested.
There's certainly better investments out there in terms of maximizing PV, but this is the closest I've ever seen in the city to a 'deal' albeit one that requires a tie up of capital for a while, along with dealing with far too many people and agencies. Too many unknowns I'm thinking.
Buy it to live in. Invest in a reasonable renovation, enjoy for a few years them hopefully enjoy the equity when you sell.
where is inododo to put this cowboy in his place? you can use dodo to rent something equivelent for what it costs someone in suburbia to fill their tank every week according to him.
Whatever you do, do NOT try to flip it--you'll lose money that way. Market is still too soft for successful flipping and besides, most NYC buyers would want to renovate to their own tastes so they'd likely not want to pay a premium for your work.
Remember too that even if you erect a wall for yourself, you will never be able to sell this studio as a one-bedroom. It will remain an alcove studio forever (unless, of course, you wind up purchasing an adjacent apartment and combining...). Bottom line--if you love it and plan to living in it for the next several years, then sure--go ahead and buy. But don't get it just because you think it's an investment. It is not.
It doesn't sound like a good deal only because everything needs updating. So I would only recommend buying if you actually want to live in it.
There's two angles:
- Keep it, treat it as a 'fixer upper', renovate, and get utility from living there. If there's updside, great.
- Attempt to flip by renovating and carrying for however long it takes to renovate and sell. Conservatively assuming 60-70k in renovation costs, dealing with negative carry, and hassle of selling a coop in a not so great market, probably not too much value I'm thinking.
Seems to be the former *may* make sense. The latter, there's better investments out there.