Making "low" offer on a Manhattan townhouse

Be careful re: your bid cuz if it truly needs a "full & total gut",even a 1998 purchase price may not be low enuf. So, IMO, the issue is not per se whether you can get it for 27% less than ask cuz this TH might have had bubble prices since 2002.

The real issue is figuring out at what price you need to buy in order to do a "full & total gut". So, 1st figure out how much a gut would cost & then figure out a reasonable price. Yeah, you may not get it, but you won't wind up foreclosed.

magilla,

renovating a townhouse is an enormous and enormously expensive proposition. let me second and third what dwell is saying: do NOT consider something a discount simply because it is cheaper than it was before. honestly, if this thing has been sitting on the market for 14 months that means it was overpriced through the very peak of the RE market.

townhouses have appreciated quite dramatically in the last few years. part of that is secular rather than cyclical, due to the decline in crime, which raises the value of townhouses relative to the value of coops and condos. but part of it is clearly cyclical as well. particularly in the ultra-prime areas (west village, east 70s, west 70s) the high end of townhouses got overheated, and there is a lot of inventory. townhouses also compete with high-end coops and condos, of which there is, again, a lot of inventory. i'd be careful.

Go for it. Renovation will run a minimum of 350/sqft.

Thanks, HappyR.

"Go for it. Renovation will run a minimum of 350/sqft."

I would say these are the words of someone who has never gut reno'd a bld. How the hell can you put a per SF cost on this job if you DON'T KNOW WHAT THE JOB IS!!!!!!!

New boiler, new roof, new plumbing & electric, total re-point, etc???

I pity the fool who acts based on advise from an anonymous inet bd.

Dwell: I have gut renovated a brownstone, in Manhattan, for 350/sqft when times were flush, building materials & labor costs were through the roof. New everything (boiler, roof, plumbing, mechanicals, electrical, total facade & repointing). Obviously, always take my words with a grain of salt as this is an anonymous board.

Magilla: brownstoner.com (though Bk-based) is a fantastic resource.

Magilla: I don't know which townhouse you're talking about but if it's S. of 96th street, there aren't any townhouse shells, so you're not truly looking at starting from nothing. I'm assuming 350+/sqft:

1) Replacement of floors, but not subfloors
2) Some structural work, i.e. replacement of 2-3 joists, some sistering, etc.
3) Complete demolition of all internal fixtures
4) All new windows
5) New plumbing and creation of new plumbing stack in a diff. location from existing
6) One kitchen
7) Central air, central heat
8) Laundry room
9) 4 new bathrooms
10) New roof
11) New walls everywhere, i.e. demolition down to brick walls
12) Facade and stoop restored
13) Back repointed
14) Each room wired for sound, Internet
15) Fireplaces rebuilt for wood-burning

350/sqft will buy you some very nice fixtures and appliances (Viking, Miele, etc., Dornbracht...)

I'm adding ++ in case you're tiling each and every bathroom in Waterworks tiles that run 40+/sqft,
doing iphone jacks, builtins in every room, blablabla...

what is the deal with 105th street on the West side? there are a few townhouses that I have been looking at. They seem to be in good condition and reasonably priced. I know that there has been recently a few problems in the area with problems coming out of thepark.

Any further insights?

The one close to CP? Location, location, location. Unless you're very, very long-term, I would shy away from marginal locations like that.

OK, 10023, assume you've done some reno. What I object to is you're telling him to "go for it". I think that's irresponsible when we don't know the proposed purchase price, nor scope of job. Is this all cash ? If not, what's the mtg? Does he have any experience doing a gut? Does he have a trustworthy contractor with a track record? etc, etc. In this environ, I would not say 'go for it" w/o more info.

If he were to really "go for it" based solely on the advice of someone on an anon. board, well, what can I say?

He said he'd been looking at it for over a year, so I assume he's worked out the comps, figured out who the contractors might be, etc.

There is a very small number of townhouses south of 96th that "need work" - I continuously monitor the pool - I don't want to put too much thought into it, but none of these are shells. Some of them need gut renos (which I think I've covered in previous post). As for price, he should just look at comps going back 10 years and see what price point he's comfortable with paying for an unfinished product and tack on 1m+ (notice the plus sign).

nyc10023,

tack on $1 million+ is basically a meaningless statement since the plus sign is open ended. In other words, tack on somewhere between 1 and infinity? because really, without knowing the specific property, that's all the advice you can really give him.

" tack on 1m+ (notice the plus sign)."

So, 10023, what's the total outlay on this TH (purchase price, cash, mtg + reno cost)?

When all is said, done & spent, what's the total cost? $3mil? $5mil? more? less?

Does that total cost make sense in view of the current market and projecting out 5-10 years?

"In other words, tack on somewhere between 1 and infinity? "

Muh man, HappyR, is way more succinct than I. Yup, s'ok to spend any where bet $1mil & infinity.

nuff said.

If I were buying a townhouse in Manhattan, and for some reason I couldn't work with anyone in my firm, I would want William Marshall of Corcoran with me.

ali r.
(downtown broker)

$3-$5mil would be a great buy for a fully renovated single family townhouse in prime location!

magilla - this thread might also offer some interesting tidbits as well
http://www.streeteasy.com/nyc/talk/discussion/5855-is-this-house-a-buy

IMHO (and it's VERY humble), if you have the time, patience, money, and central nervous system for one of these projects, I think it would be a fabulously worthwhile endeavor!

Good Luck!!!!

http://www.streeteasy.com/nyc/sale/133462-house-21-perry-street-west-village-new-york

Here's a townhouse in W. Village. I'm not sure $3-$5million will do it for prime WVillage!

babsie, that house has been on the market for a year and a half. don't be so sure $5 million won't get you something great in the prime west village one of these days.

"$3-$5mil would be a great buy for a fully renovated single family townhouse in prime location!"

maybe, maybe not. what's a prime location & size of TH? is it a 12 fter? 20 fter? How steady is the owner's job? What if O loses job?

In this market, I don't like general comments. Got to work with concrete #s.

magilla: Here's what you should do: take out your wallet. Right now. Count the amount of cash you have on you. Then offer half of that amount.

happyr: have you seen perry st? where is it on perry? Why's it been on the market so long? Can't get $7? Vat's wrong with it? or, nothin 'wrong' with it, but no one's got the $ or doesn't want to spend that amount for it.

i have seen that house, yes. i don't think anything is wrong with it, it's a wonderful house. it would need to be converted to single family, so that could be a turn-off. and while the back-garden is indeed glorious, it is set up as an open, shared garden with the neighboring houses; some people might not like that. but i think the biggest point is that $7 million is simply a lot of money.

Thanks, HapR.

So, hypothetically, at what price would you buy it? I would call this location prime West Village. Is it west of bleecker? just curious.

it's between west 4th and bleecker, certainly it is prime greenwich village. i wouldn't pay anything for it--i'm 27 and single--but if i were in the market for a townhouse i would want my own garden. as lovely as this place is, i just think the greatest thing about a townhouse is private outdoor space in the city. if i didn't care about that, i would pay $4.5.

Thanks HapR. Yeah, that is prime NY RE. Yes, in the $4.5 vicinity.

"$3-$5mil would be a great buy for a fully renovated single family townhouse in prime location"

I think that is a concrete generalization!

uwsmom: would you pay $5mil for a 12 ft wide TH in a prime loc? And, what do you consider prim loc? IMO, not so concrete.

First of all, there are very few 12ft houses. And currently none at all on the market in the areas of my interest. So your point is moot about 12ft houses as far as megilah is concerned since I know there are none to be had. My perspective is different from yours simply because I know what is and isn't on the market (of course there are always stealth listings).

And as far as townhouses are concerned, you are right - you can't generalize too much. But you have to be comfortable with generalizing to some degree because it's so hard to get apples to apples unlike an apartment in a building. First, you have to shrink your world to a half-block, because the value will vary depending on things very specific to your street number. Whether your house is next to a nice one, part of an arch. distinguished string of houses, how much closer to the park, how much further away, next to a big apt building or not, whether the backyards line up with other backyards which haven't been built up too much, etc.
If you don't generalize at all, then you get zero comps. Then the value will depend on the C of O, amount of details left, condition, architectural history, width, built-up depth, layout, "charm", and I don't have enough breath left to go on.

My methodology is to figure out the base price per square foot is for a particular location (and you have to be specific). The "basic" house - assume a width of 18ft, 4 stories, some details. Then you add price/sqft based on the "extras".

Happyrenter: The one on Perry Street is between 7th Avenue and West 4th, not Bleecker. I would assume not knowing anything about the townhouse market that this may affect its value negatively, being so close to 7th Avenue but of course Perry Street is just a beautiful street. It is the 2nd or 3rd in from 7th Avenue.

I know it's been on the market a long time, and it only recently received another price chop.

"uwsmom: would you pay $5mil for a 12 ft wide TH in a prime loc? And, what do you consider prim loc? IMO, not so concrete."

I'm not familiar w/ 12 ft townhouses, but I don't doubt they're out there.

My idea of prime location is my neighborhood, West 70's (and 10 blocks in either direction, really).

I am comfortable standing behind my ignoramus claim of "$3-$5mil would be a great buy for a fully renovated single family townhouse in prime location". Don't care how uninformed I sound saying it b/c if I could/should ever actualize this generalization I would be sitting pretty and happy to make more (concrete mathematics or not).

babsie,

pardon me, you are right, it is between waverly and west 4th, not between west 4th and bleecker. i don't think the proximity to the avenue is a major problem here. i am on that block all the time and it is unquestionably lovely. DOMA, the most perfect village cafe, is right at the corner, and the great restaurant row on west 4th is just down the block. i really don't think location is a negative in this case.

http://www.streeteasy.com/nyc/building/23-perry-street-manhattan

the one next to 21 Perry (23 Perry) went for $5.9 million in 2005. Not knowing what the condition was, is it safe to say that this would be the top price for 21 Perry or perhaps 21 Perry is in much better condition. I understand that 23 Perry is now a 1 family. Don't know if it had to be converted.

babsie,

good fined, but lets be clear: 2005 was in no way the peak for west village townhouses. on average, i'd say there was at least 20-30% appreciation in west-village townhouses between 2005 and 2007. i still think this will trade for less than 23, but i would not call the 23 sale the peak of the market.