After being on the market for one year and three months, 21 West 120th Street (between Lenox and Mt. Morris Park West) finally went into contract in February of this year. The building is definitely on one of the most prime blocks of the Mount Morris Park Historic District, but why did it take so long? The original asking price back in November 2008 was pretty reasonable at $995K for a habitable building that needed work. So why didn't it move for over a year when the price was reduced to a low $695K in May 2009? The answer is that the brownstone was chopped up into an eight-room SRO with the units currently occupied.So how much does an occupied, 20-foot wide, 4,472 square-foot SRO in the MMPHD go for these days? Apparently the sold price was $425K, based on what records are showing. At this point, it's unclear what is going to happen to the house, but it will probably need a lot of work. Photo by Ulysess
Even at $150-$200K per floor for renovations, this is a great deal. Excellent area and block.
ReplyDeletewow...I am guessing then the low price was b/c of the SRO tenants? How much will it cost to get them out? Can't quite believe this went for around $100 sq. ft.
ReplyDeleteIt's a great deal for a very patient buyer. It can take years to get an occupied SRO cleared ... lots of legal work, etc.
ReplyDeleteBut I'm sure it's beautiful ...
SRO=years before anything can be done. If it's inhabited, you have to pay to have the people leave. If its not inhabited, you have to track down the last tenants, and pay them to sign the paperwork to receive a certificate of non harrassment. If you want to wait, you have to prove that the building is currently vacant, and wait 3 years. Expensive/long wait however you swing it. Ultimately a building owner wants the coveted "certificate of non harrassment". No bank will give a mortgage without it. Without it, the Dept of Buildings won't give you approval to do any construction other than rehabing the SRO...
ReplyDeleteTranslation = All Cash
ReplyDeleteWorth the price.
ReplyDeleteAnonymous 2:42,
ReplyDeleteThank you for the lengthy elaboration. I really appreciate it. At first, I thought the buyer got one heck of a deal. Reading your take on SROs and how complex they can be, I have second thoughts on the deal. Even if one got it for free, is it worth it? You have to heckle people down who probably don't care to sign off your documents. Moreover, you have to deal with NYC's DOB/ HUD/ DEP/ and the list goes on and on.
Nevertheless, there are many who love to transform these beautiful homes back to their glory days. More power to them.
Sanou's Mum, worth the price? You lack the info to determine this. The certificate of no harassment paperwork requires you to have a signature from every person who’s lived there in the past 3 years. If you don’t know all their names you’re looking at up to a 4 year process. And typically you have to pay $10-$20K per signature. These 8 units are occupied? Believe me, these people are going to make sure they get paid, and well.
ReplyDeleteA lot of smart people passed on this property for a reason, few can afford to speculate with this measure of cash, not to mention the lost opportunity cost of that cash for years and years and years, the maintenance cost you have to pay, taxes, etc. the major legal fees, etc. When the smoke clears you the real cost of this property might be $250,000 more in cash plus 5 years of lost opportunity cost of a lot of cash + more....
For anyone willing to answer: can SROs only be purchased with 100% cash?
ReplyDeleteyes -- no bank will loan on an SRO
ReplyDeleteAnon 4:47
ReplyDeleteYou act like an SRO is a charnal house. Doesn't have to be.
yes and no - banks won't lend on an OCCUPIED SRO, but one that's been vacant for years they often will. almost every house in Harlem is technically an SRO - 15 West 122nd, 14 West 120th. all of these closed recentely and are still SROs technically.
ReplyDeleteActually First Republic Bank, and some other private ones, will loan up to 60% LTV on non-occupied SRO;s with proper certificates of non-harassment. Generally speaking though, SRO's are extremely hard to convert to proper C of O houses even when delivered vacant---the process can take years!!
ReplyDeleteThe certificate of no harassment is required for a building permit. I believe a notice can be filed for a certificate of no harassment and if no one comes forward after a period of time, certificate of no harassment is granted and the building permit can obtained and work can begin. The final stage is the Certificate of Occupancy and is tough as it is like starting over with a new building and everything has to be up to code including the structure and mechanicals. The starting point is the certificate of no harassment which on an empty building is just a matter of time to obtain, and more likely months than years. Unfortunately existing tenants of an SRO see this system akin to winning the lottery expecting to be bought out, however, if a buyer is to use the home for his primary residence, he is legally allowed to move the existing tenants, so no cash handouts for the tenants. In short, if you buy an occupied SRO to be a primary residence, there is a clear path to full redevelopment and new C of O as a single family home.
ReplyDeleteif a buyer is to use the home for his primary residence, he is legally allowed , that is not true, if the SRO tenants have lived there more than 20 years or is over 62 years of age the landlord can not evict them.
DeleteIf you consider 36 months, months not years, yes, it is only a few months. (see quote and link below.)
ReplyDelete"The inquiry period begins thirty-six month prior to the acceptance of your application by the Department or, if an Alteration or Demolition application was made to the Department of Buildings, thirty-six months prior to the date that application was made and ends when a final determination is made by the department."
http://www.nyc.gov/html/hpd/downloads/pdf/certification-of-no-harassment-and-exemption.pdf
I do know cases where the granting of the certificate of no harassment was in fact months and not years. I read this as the 36 months prior to acceptance of application, this is not the time from acceptance to granting the certificate of no harassment but in fact the time window reaching back that persons can claim harassment occurred. Again, I do know cases where the granting of the certificate of no harassment was in fact months and not years.
ReplyDeleteI'd be interested in knowing those circumstances. The city's dept'l processes are quite mystical to most of us. Knowing when a house which is an SRO can receive a certificate of non harrassment within months would make a huge difference to buyers options, and also house values.
ReplyDeleteI think the key is to work with someone who knows the system and promptly files everything without any typos or errors as that can result in delays as forms are rejected and refilled. I would advise the owner to read the rules as poster @11:07 has kindly showed us and watch over every step of the process for timely filing and acceptance. The dept of building web site is really good as it shows the current status of the filings and acceptance all the way through the process leading to the holy grail of the certificate of occupancy.
ReplyDelete