what to offer

Offer $500-600 per square foot. Tell them the market will be there soon and they had better accept your offer or you will out them on StreetEasy.

without knowing the exact building / how open is the Board to allow construction activities

Kitchen can be a 50K - 100K job if you want to go overboard with high-end stuff
bathrooms also easily 30K to 50K
floor is relatively inexpensive, wall changes don't know

50 + 3x30 = 140K on modest budget plus the rest so 200K ??
add 50% so at leat 300K ???

in a down market to buy a wreck is the best move
nobody wants to touch it because of all that work
low ball the initial bid
so based on 300K expenditures thats already 837 sft on adj bases

offer not to laugh at them the way everyone here is laughing at SteveF and Spunky

leelaura, their ask is insane on a per square ft basis..even if maintenance is low (?). And where they started is irrelevant. If you are working with a broker, they should be pulling you comps. You can even get a gauge on psf asks for like buildings on the UES by searching here. Good luck...

HT1 - so, with that being said - what would you offer?

thanks so much

been a number of posts about terraces. i think that's the wild card in your situation. i am assuming that if not for the terrace, you wouldn't be particularly interested in this apartment. if so, think you need to put a $ figure on the terrace on top of these other calcs.

That broker will be sure to pull the comps that justify a higher price. Be warned. You might have to come up with your own number. You're the one who is going to be paying for this place, after all, what do you think it is worth to you?

$500-700 psf, given the massive renovations, and assuming maintenance is reasonable. Pre or post-war?

we are not working with a broker - do you suggest that we do? (can you tell we are new to this?)

regarding the terrace - not necessarily - we like the location and the building

the maintenance is around $3000

I am looking to all of you with experience to give us a starting point as we are going back to see it again this week

thanks so much

re: terrace....many sellers (and i guess some buyers) value this space at the same or more than inside space. if you are ambivalent about a terrace, think you really should see if you can find similar size and location without.

leelaura,

An extrreme low-ball may only work WITH a cash offer. Might we worth putting your money to work here to get the maximum discount... Once you bid, its harder to go lower so you may as well start off VERY VERY low and counter with the cash offer

"we are not working with a broker - do you suggest that we do? (can you tell we are new to this?)"

I wouldn't, not if you are trying to get the maximum bend out of them price wise. Just do a good job of putting together the offer so the seller has confidence that you can close the deal. Of course, you don't have to reveal all your financial info until after a price is agreed to, but providing your credit score wouldn't hurt.

Sorry, cash offer, well that will help, but will only go so far.

Now that I see the amount of renovation the place needs, you shouldn't bid over $400 a square foot. Bid $500-600 a square foot on a place that you can move into right away without doing any work. Sellers welcome these kind of offers all the time, trust me. Be sure to add some insults in your offer letter about how the seller is delusional and paranoid. Sellers love those kind of comments.

You will come up with your own final offer. Re: renovation, please understand it is difficult to over-estimate the costs you outline. Consider that if you are going for highend renovation, you are looking at a rock bottom of $200 per sq. ft.--easily more. Don't forget to figure in cost of living elsewhere during the renovation which for the scope you describe will take A MINIMUM of 1 year from closing.

Remember you'll have to hire architect, design process, develop bid drawings, get and vet bids, select contractor, get building approval after coop architect/engineer evaluates plans and goes back and forth with your architect, revise drawings per building engineer, get permits from NYC, and THEN commence work. I'd estimate construction begins 5 months from closing. If you hire a GC with a large enough staff to assign an entire crew to your apartment and the crew will be there EVERY DAY, then 5 months of reno is possible. Several months longer is completely possible, too.

luckily we live in a rent stabilized apt and we can stay there while we renovate

407pas - I am confused about your comment - "Be sure to add some insults in your offer letter about how the seller is delusional and paranoid. Sellers love those kind of comments" I assume you are trying to be funny?

leelaura,
Yep, that's an inside joke meant to poke fun at those who have been raking me over the coals for days. Just check out the price hazing I have been subjected to in the thread: "Open House Today 1:30-4:00pm - High Floor Corner 1 Bedroom - 407 Park Avenue South #18B "

and all will be made clear. You can skim it or read the last page to get the gist of the discussion.

Oh, I think the paranoid and delusional attacks are on page 3, maybe page 2, I'm not sure. I'm thinking about turning it into a short story.

Can I have your rent stabilized apartment when you move out? Maybe I will give up on being an owner.

leelaura, unless you have the unfortunate experience of following the thread on 407PAS's attempt to sell his apt as a FSBO, then you'll miss the attempt at humor in his post. Just as well. I followed the thread and the post isn't funny.

Great about the low rent while you "camp out" for any reno to be complete. If you go for this, you'll end up with an amazing home you can live in for a long time hopefully. But the process will test you, your relationship and consume your time beyond what you imagine no matter how much you think you know what it will be like (unless you've done this before). I'm finishing up a reno, and I am someone with great fortitude, foresight and knowledge of design and reno's in NYC. And let me tell you I am SPENT.

Sorry, kylewest, my comments are funny indeed, and take the price per square foot numbers shoved down my throat and give them to someone else to use against another seller. Where is your sense of humor?

PAS, your situation is yours. Does it have to spill over now from your thread to other people's discussions. Let's try to stay helpful and on topic.

I think difficult renovations cause divorces, you might want to be aware of that. Kylewest's point about testing relationships is right on. Since I did a lot of my apartment renovation on my own, I was faced with a lot of heat from my wife on when I was going to get things done. The plaster skim coating on the ceiling took months, on and off, along with other work. I'm not sure I would recommend a renovation. We had some moments, which if we had taped for HGTV, might have earned us some cash.

407PAS, while i agree you were raked over the coals in your own post, don't hijack someone else's post by calling attention to your own problems - this isn't about you.

OP, I am thinking that the asking price is somewhat...outrageous for the condition of the apartment you claim it is in, unless it is on 5th ave/madison/park. Why don't you work backwards with the floorplan and try to figure out how much the reno will cost you psf and then cut the offering price further by $100psf for the pain and suffering of having to renovate and general poor market conditions? Just a suggestion; if you are intent on buying the place, you could explain your rationale for your (low) offer, which could help grease the skids, especially if the apartment is an estate sale.

east or west of 3rd avenue -- big difference - no or so of 72 - 86

kylewest,
Why should we be helpful on this board when so many people are negative and nasty? I used to think being helpful would, well, be rewarded with kindness, but I see now that that is not the case.

My square footage numbers came directly from the arguments directed against my property. They were on topic.

Why should we lead this poor rent stabilized tenant down the path of a horrendous renovation? Last weekend, I looked at some sponsor apartments with over $200k worth of renovation in them. I just had to shake my head at what I knew would just be hell on earth for six months or more. No thanks. You have been warned.

in general i would agree completely. however, these people seem to have an advantage...they will still be living in a place free from all the work and that they are used to (have known people to try both approaches--live in the chaos or temmporary move out that ends up being much less temporary and much worse than they thought) and if they listen to everyone here, they hopefully will not underestimate what this is all going to cost.

I would take a HUGE whack for renovation heartache, expense and inconvenience. It took me 9 mo. It is like a full time job -- and then some.

LL - bol and let us know how this shakes out. done alot of renos - you are very fortunate to be able to live elsewhere during the reno. last reno came in <10% over budget. the entire process stinks but was worth it in the end. i like brex's tactics for the bid.

did say last reno came in less than 10% over bid and i liked buglerex's tactics for your bid.

east of 3rd 80's

East of 3rd in the 80s puts the apartment in Yorkville and ground zero in 2nd Avenue subway construction, correct?

Looking at the Miller Samuel reports, ppsf was 943 (2008 -- 2 beds), 917-950 (2007 -- 2beds- 3beds), 840-1063 (2006 for 2-3 beds). So I don't see where they got 1000 (or 1250) from ...

You are the ultimate streeteasy purchaser -- rent stabilized, all cash, you can negotiate like no one else in NYC right now!

jmkeenan - yorkville is correct

so what is your recommendation per sf? everyone seems to have opinions but nobody has stepped up to the plate with an offer recommendation - so id all of you were us - what would you offer - we are truly looking for guidance.

thank you

$700 a foot today

if they say no, come back with $650 next month.
keep on going down2% a month until they say yes or it sells.

hope this helps! (and yes, i'm serious)

Well here's my thought.

PPSF for a 3Bed+ circa 1998/1999 in Yorkville was $400. If prices were to appreciate by 6% since then, you'd get a PPSF of $715 today. Subtract $200/sqft for renos, and you're at $515. 515 x 1800 == 927000

I know you are all cash, but let's suppose you were to get a mortgage at 5% and put 20% down. Your monthly payment would be $4k in mortgage + 3k in maintenance. So that's $7k/mo. Now here's an interesting listing I found on StreetEasy:

http://www.streeteasy.com/nyc/rental/407190-coop-400-east-85th-street-yorkville-new-york

So, I think at $515/sqft it's a fair price. The sellers probably won't think so, but that's a whole 'nother story. Frankly I don't know how you go about offering at $925k in a way that you can be taken seriously.

And is it 1850 s.f. listed? A lot of people do per s.f. calculations on 'true' internal square feet, usually 15-20% below listed.

And does the 1850 s.f. include or exclude the terrace?

Without thinking too much, for a major renovation and east of 3rd in the 80s (with a diminished value of being near the subway long-term because they don't have funding for the downtown line)- $700 a true square foot is probably today's market- if square footage is overstated by 20%, then bid below $560 a listed square foot.

leelaura,
Fear not, your prize will not be stolen from you. There are no other bidders, just you. If you let the board know the property not only will you get an exact price, which is what you are after but, you will be amazed and mystified by the wealth of info that will result. Don't be afraid, not in this market!

I think there's another key factor that I haven't seen discussed. Do you HAVE to buy in the near future? Or just playing with the idea and fine with staying in your rent stabilized apartment if need be? And if you have to buy, must it be this one? Or just an option among many?

If you MUST have this apartment, and can easily afford it, I'd say bid 750-800 per real square foot. Yes, you'll probably overpay, but you'll get what you really want.

Otherwise, I'd say in a falling market, time is your friend. So lowball like crazy. i.e. $600 per real square foot or less. Worst that happens is that they ignore your bid, and you continue living in your rent stabilized apartment, looking at apartments, and watching prices drop. Not so bad.

I can't help but appreciate the irony of seeing a rent stabilized tenant, someone who saved at least some of the money needed to buy and renovate this apartment by not paying market rent to another owner, struggle so mightily over what to pay for this asset. The market may force you to pay a fair price, beware.

You may not be the only buyer and so you might lose this apartment to someone else. If you win it, you may have bought yourself a raft of troubles. Either way you win. ;-)

I suppose you will now see the difficulties of being an owner. It is a fun ride. Enjoy the trip.

we have just over a year left on our lease and then we become destabilized. so do we have to move this minute? no - but if we want to do work it gives us the opportunity to stay in our apt while we do it.

this is the only one that we have seen that we are truly interested in - it is the "gut" feeling. but we also do not want to be fools and overpay and see that in 6 months we could have saved a bundle. I am trying to get a sense of how badly the owner wants to sell.

leelaura

check this out

http://www.urbandigs.com/2008/11/buying_to_renovate.html

and read the follow-ups, too

http://www.urbandigs.com/renovations_that_pay/

Give us the information on the property and we'll do the cybersleuthing to find out the seller's position -- and show you how to do it.

"If you MUST have this apartment, and can easily afford it, I'd say bid 750-800 per real square foot. Yes, you'll probably overpay, but you'll get what you really want."

I would not even begin seriously looking for a place until prices get down to around 500/sq ft, which they will...eventually. It may take 2-3 more years, but they'll get there. In the meantime, you can find some sick rentals, since rental prices fall faster than sales prices. I was looking at a rental listing for the Beresford yesterday - asking $7500/month - there's no way in hell you could buy a place like that for anything remotely close to a $7500/month nut (after the tax benefit). In the meantime, the $ for your eventual downpayment can be invested in a bombed out stock market and earn some juicy returns over the next fews years. Makes sense to me...

Do NOT buy in anticipation of losing your rent-stablized apartment, if that is the main reason. There is a very good chance the state legislature changes the decontrol rules and you will get to stay rent-stabilized.

I think it is idiotic to do so, but all they care about are votes, not what is good for the city in the long term.

"Do NOT buy in anticipation of losing your rent-stablized apartment, if that is the main reason. There is a very good chance the state legislature changes the decontrol rules and you will get to stay rent-stabilized."

Ah yes, I am sure the abusive, unfair system of rent-stabilization will stay around to destroy more housing stock in the future.

I want to amend my previous comments where I said that I had visited some formerly "rent-stabilized" units that were up for sale by the sponsor. I should have said "rent-controlled" units. The units were in an incredible state of disrepair. We talked to someone else who was looking at one of the units and he could not believe that anyone had ever lived in it. I assured him that, yes, I thought someone had been living in the apartment.

Sure enough, the agent assured us that the woman had just died recently and that she had been in the apartment for 50 years, with no renovation work having ever been done. If the unit faced a less busy street, I might have taken a shot at renovating, but I just don't think the apartment it will work for us, and I do not feel like fighting my way through a major renovation.