Number 139 West 123d Street sold over a year ago but is now back on the market after a not so thorough gut renovation. This brownstone on the cusp of the Mount Morris Historic District exchanged hands for $540k and now is listed for $1.3 million. The 20-foot-wide townhouse has been gutted but not renovated and the cornice has been removed unfortunately. Apparently the paperwork is in order for a 3-family conversion and this street is in a prime Harlem location close to express trains and better amenities. More on the broker site:
LINK
How shoud one value a stalled construction site? There was a similar property for sale at 246 Lenox a few months back.
ReplyDeleteThe sellers seem to buy, put in a few hundred thousand and think the value increases by 2x. I saw 246 and thought the work was pretty crappy - couldn't understand the value or asking price.
Does the seller get dollar for dollar credit for the work? Is their value creation? Destruction?
that's gross.
ReplyDeletedemolish the top of a beautiful historic building, run out of money, then ask double what you paid!
What B@lls.
future foreclosure
Since that brownstone is within the Mount Morris Historic district, the new owner has to replace a cornice in the same style.
ReplyDeleteProblem is, which I am sure the current owners have found, you can easily run up 150k+ worth of expenses before work is even started. Stuff like permits, drawings etc. cost an absolute fortune. Throw in expediter fees and goodness knows what else and you might well be 200k in the red before work has even started.
ReplyDeleteFrom the asking price it looks like they are trying to cover their costs and make a cheeky profit at the same time. B@alls is putting in lightly mike!
Chris - what comprises 150,000? Just trying to learn a little more about the cost of a gut reno
ReplyDeletePart of the value is untangling the bureaucratic red tape and getting the building to the point where the department of buildings will finally issue a building permit allowing work to begin. That in itself is a huge and necessary step and not obvious when looking at the building in terms of bricks and mortar. How much that adds in value in terms of $$ is hard to estimate, but it is of significant value.
ReplyDeletePaul, I should clarify that I haven't gone through the process of a gut reno, but did consider doing a little roof conversion at one point. I ran a few numbers and got some estimates and the architect/expediter fees combined with the architectural drawings was close to 30k. That was before work had even started. The 150k was a rough guess for what it might cost for an entire house and may be completely off the mark. Just a bit cynical about any sort of construction in NYC and I get the impression that money goes out the door faster than one would imagine.
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ReplyDelete...Or, the owners took a look at shell prices south of 125th St. and decided they'd rather make a quick and easy profit than finish their project.
ReplyDeleteNo shell has sold for anywhere close to this value. I would argue a stalled site in this condition should sell for less than a shell that needs a full interior and systems (electric and plumbing) replacement.
ReplyDeleteAnyone trying to sell a 1/4 finished shell is likely an armature - there is no easily way to determin the extent of the damage done. Also, it likely still needs 1 million in work - this is worth 700 max. And I'm giving it full credit for the money invested...
I agree the asking price is ridiculous, but considering the low price they paid for it, they would still get a profit if they got out now. I think too that the owners ran into some major problems and can't afford to finish. I saw the prop before it was demo'd, and it was full of mold, and probably hiding some major structural problems. It is not worth more than 700K, but I think they could get up to 900K for it. There are a lot of people looking for shells south of 125th.
DeleteSay someone buys this for $1.3M and they put in an additional $700,000. That would be an AMAZING renovation.
ReplyDeleteThen, they could turn around and sell the building for $2.0M or more. We all see the price of townhosues these days below 125th. They have jumped quite a bit.
I wouldnt be surprised if this one gets asking or close to it.
Not sure what you are smoking - this house will cost much more than $700,000 to complete an "amazing" reno:
ReplyDelete- building systems: $200,000
- Floors and walls: $150,000
- architect: $50,000
- structural work: $100,000
- roof: 25,000
- windows and doors: $75,000
- Fixtures: $100,000
- stairs: $75,000
- mill work: $75,000
- random BS, mold remediation (I've never seen so much black mold as in this place) carry cost, headaches: $200,000
- your sanity (which will be lost): priceless