Our Townhouse Architectural Plans Taking Shape

Posted on March 16, 2010 by BeatingUpwind

There’s still a lot of work to be done on all the details, but we’ve pretty much got the layout of our townhouse determined. (Click on any image to see it bigger).

Our place is a 5 story townhouse that’s a narrow(ish) 15′ in width. It’s attached to sibling townhouse to the east (to the left as you look at the front of the building), but there’s an alleyway to the west between it and the apartment building next to it. The windows look off center because one sidewall is shared (and hence our portion of that wall is narrower which throws off the symmetry).

We’re still working on the window situation. What’s drawn is a casement window over a fixed pane transom. We need to do some measurements this weekend, but it may turn out that only double hung windows fit the current window openings since they’re wider than 3 feet. If we’re going to do casements in the front we have to make sure they’re in before the block is landmarked – apparently there are people who want to do it and there’s even a meeting about it tonight. Landmarking will help the value, but restrict what we can do in terms of development including what windows we can put on the front façade. Just for reference, the window next to the front door is huge – 4 1/2′ wide by 7 1/2′ tall! The window next to the door in the back (parlor floor) is 3 1/2′ wide by 8′ tall. We’ll may have to narrow the back windows to 3′ since that’s the maximum width for casement windows before you get into expensive custom “architectural” windows. We could also do double hung windows back there, but I’d really rather have casements.

The back side is south facing, so tons of light. The front faces north.

One thing that we loved as we were looking at townhouses was the quality of the light as you went up in the building and got light from the skylight. We’re not actually doing a skylight, instead we’re doing a bulkhead with south facing windows – just as you see in a lot of European factories. This should improve the quality of the light since it will reduce the light at noon in the summer when the sun is high in the sky, and increase the light in the winter when the sun is lower on the horizon. We’re devoting an bigger area than normal to the stairs and wrapping them around a “light well” which will bring the wonderful light down deeper into the building.

As you can see in the section view the house is basically a 6 bedroom owner’s unit over a 1 bedroom rental unit that has “accessory space” in the cellar. It may seem odd to have a 6 bedroom place in Manhattan, but if you think about a family with three kids – that’s three bedrooms for the kids + a master bedroom for the parents + a home office + a playroom/lounge for the kids. Even at 2 kids it makes sense – then they’d have a spare bedroom for guests.

Most townhouses are 4 floor buildings. We’re lucky to have a 5th floor. Dan’s a sculptor who’s never had enough space to do his work. One of our objectives in getting a townhouse was to give him space to do his art in a place where he could make as much noise as he wanted to (apartment buildings have lots of rules about noise). Initially he thought he’d take the cellar for art, but when this building had a 5th floor we decided to give it all to him for his art. In the back he’ll have a “dirty studio” which can get as messy as he wants. In the front will be his “clean studio”, and gallery space (if he can get people to walk up all those flights to look at the art). The dirty studio faces south so it will have tons of light and the gallery will get flooded with light from the bulkhead windows. However, FDNY may make us put a wall up between the stairs and the studio since it’s a bit of a fire hazard to have an open room at the top of a stairwell since fire spreads vertically. If that happens we’ll put a big window in the wall. In the middle will be a “utility room” that can easily be converted to another bathroom. It will have a slop sink, a small kitchenette, and some storage. The ceiling height on this floor will go gradually up and taper with the slope of the roof. In the back it will probably be about 8′, and in the front more like 9′.

One floor down will be my office. The fact that I’ve been self-employed for 9 years now (and for 3 years in the early 90s) is another reason why we needed more space. I need a proper office and that’s what will be in the front of the 3rd floor. Any street noise there might be won’t bother the office, unlike the guest bedroom which we’ve put in the back of the building. In the middle is a bathroom with an attached laundry room with a stacked washer/dryer. There will be exposed brick along the wall with the hallway. The other three walls will be insulated and sheetrocked since they’re exposed exterior walls. The ceilings are a nice 9′ high on this floor.

The next floor down is the floor just over the parlor and is traditionally called the “master/mistress floor” because the husband would have a bedroom in the front, and the wife a bedroom in rear and in the middle would be connecting dressing rooms. That let each spouse have a separate bedroom, but let them discretely go between the rooms as they desired.

We’ll have our master bedroom in the rear and a 2nd guest bedroom / den in the front. Since there wasn’t room for a second bathroom on the floor we’re putting in a pocket door so we can share our master bathroom if we have a lot of guests. The bathroom is smaller than some might want, but it’s plenty big for us. We opted to have a bigger master bedroom and a smaller master bath. I should mention that each of the bedrooms has about 10′ of closets – which we’ll really enjoy. There is a wood burning fireplace shown on the plans. It doesn’t use the existing chimney (which is on the opposite wall). It was just easier to put in a new fireplace and a new chimney. However, chances are the fireplaces will get cut due to a tight budget. But they’re something that can be done almost as easily at a later date. The ceilings are a whopping 10′ on this floor.

The parlor floor is always the most grand floor in a townhouse. Ours has 10 1/2′ ceilings, though we’re considering raising the floor 6″ (which would lower the ceiling height) to give more ceiling height in the apartment on the floor below. Historically the kitchens were a floor below and they had servants that would bring the food up. There would have been a sitting room in the front, a dining room in the middle and a living room in the rear. In most modern layouts the living room is in the front, the kitchen in the rear and the dining room in the middle. We’re changing that around and putting the kitchen in the front because we want the living room in the rear where it’s quieter, more private, and more connected to the living space in the back yard. Ultimately we’re going for an open concept loft-like space on this floor. When you come in the front door we want an unobstructed view to the back.

One of the objectives in buying a townhouse was to have a back yard, so there are stairs going down so we have use of the back yard. We could have put in another rental unit on the parlor floor pretty easily and made it into a 3 family, but then the only outside space we would have had would have been the roof deck. The back yard isn’t huge – just 15′ x 26′ (390 sq. ft.) but it’ll still be really nice to have it.

It was tricky fitting a bathroom on this floor. The thing is you don’t want people using a bathroom next to where you’re making food, and you don’t want to think about someone else using the bathroom when you’re in the living room, and you definitely don’t want it to be an issue when you’re eating. The best solution was to tuck it under the stairs and put a privacy screen between it and what will be the dining area. We’ll just have the rule that if you need to use the bathroom during dinner you need to go and use one of the bathrooms on the upper floors.

The rental unit will help carry the cost of the (rather large) mortgage we have to get on the place. So it’s important that we have a nice rental apartment so it will rent quickly and for a good price. We’re including 1/2 of the cellar in the rental as a “accessory space” (see floor plan below). You’re not legally allowed to have a bedroom that’s fully below grade, but renters can use it as a media room, artist studio or home office. There will be about 725 sq. ft. on the main ground floor and another 225 or so in the cellar – so it will be over 1,050 sq. ft. The tenant will have access to the back yard, but we want the back yard to primarily be ours. So how much they’re allowed to use it will depend on how we get along with the tenant and how much we find ourselves using it. Ceiling height will be at least 8′. We’re thinking about raising the floor above and taking 6″ from the parlor level and lowering the floor in the rental 6″ in the living/kitchen area. Those two things would give 9′ ceilings in much of the rental and over 8′ ceilings elsewhere.

The one odd part about the building is that there are two entrances under the stoop. There’s a 3′ wide staircase down into the cellar, and a 2′ entrance to the ground floor. The 2′ entrance is not up to code and we doubt we can get it grandfathered, so we’re thinking we’ll need to make what was once the window into the legal door. The tenant can use either, but we’ll put french doors on the legal door so it can read visually as either a door or a window.

We have a “C2-4” commercial overlay on the property which means we can use the ground floor (and even the parlor floor) for commercial purposes. In regular economic times a commercial tenant would be better since they’d probably pay as much or more in rent and only be there during the day. We’ve done the layout so if you take out the kitchen it’s a viable office space or small store, hair salon, etc. However, we won’t be trying to get a commercial use specified in the C of O. We’re amending plans for 2 family building the prior owner got approved. If we went the commercial route it would cost us a lot more money. Down the road we can think about changing that – but not now.

Here you see how the tenant gets half of the cellar. There’s a mechanical room in the center and storage for us in the front. The townhouse is unique in having a “vault” under the “front yard”. Usually the utilities are brought in under the stoop, but since there are stairs under the stoop they created a little stone walled room with a rustic arched brick ceiling (that’s having problems). It’ll make a wonderful little wine cellar or dungeon – depending on your proclivities 🙂

So there you have it – top to bottom… Hopefully in a year we’ll be living in it!

Kitchen Design Inspirations

Posted on March 15, 2010 by BeatingUpwind

We’re to the point where we’ve started thinking about finishing details. We’ll probably go with an Ikea kitchen just to keep costs down. Doing a Poliform/Varenna kitchen like last time just doesn’t seem possible given our budget. Last night I couldn’t sleep so I got up and googled ‘kitchen design’. There were a lot of horrible and not-so-great kitchens, but a couple caught my eye…

modern kitchen with great use of color

I really like the use of color in this kitchen. It’s a bold use of color, but not jarring which is a rare combination. Of course, the skylight and natural light helps as well. The use of laminate cabinets is also consistent with our budget. I’m wondering what the floor material is – it’s hard to tell…

This next kitchen I could actually see in our place…

Minimal modern kitchen design

This is just really simple and elegant. Once again there are relatively inexpensive laminate cabinets, the counter can be done relatively inexpensively and the backsplash can be done with simple small white tiles. I just have to figure out how a range/stove would integrate into something like that… NYC building code says you can’t have a gas oven unless it’s part of a gas range so our design choices are limited unless we go with an electric oven.

How To Find A Good Deal On A Harlem Townhouse

Posted on March 14, 2010 by BeatingUpwind

Since now is the time to buy if you want a Harlem townhouse I thought I’d go over what some of the things are that you need to know before you buy a place. Being an “educated consumer” is critically important. A LOT of people have been financially devastated by Harlem townhouses – you don’t want to be one of them.

#1 – Realize Harlem Townhouses Are A Speculative Purchase

Harlem townhouses were built by speculators in the late 1800s and early 1900s in conjunction with the subways being extended north into Harlem. But then there was a real estate crash starting in 1904 and that speculation came to an end and rents dropped. Harlem townhouses started as speculative investments and 100 years later the cycle of speculation and failure is still going on as is evidenced by the fact that you can buy one for 1/3rd of it’s price 2-3 years ago.

You need to go into it knowing it’s a speculative purchase. While I firmly believe Harlem townhouses will fair far better in the next major downturn (10-20 years from now) there is no guarantee. Harlem is not Brownstone Brooklyn. It’s not “there” yet. It’s only starting to get things that people look for in “good” neighborhoods like great supermarkets and good schools.

There are certain implications to a speculative purchase. Namely you need to watch for the next real estate crash and either get out before it, or be prepared to weather it. If you go into it knowing that time will come, you won’t be so disappointed when it happens.

#2 – Be Very Careful Buying SROs

SROs are “single room occupancy” buildings where people have a room without a proper kitchen. I’ve been reading Sherlock Holmes lately and he lived in an SRO. At one time it was fashionable for single men to live in them – the landlord would serve them meals, etc. Then they just became the least expensive form of housing and the City’s poor gravitated to them. Today SRO tenants often earn $10,000 to $15,000 per year and typically pay 50% of their income to rent these cheapest of cheap rooms. The issue is that when you kick out an SRO tenant they often can’t find other housing and they become homeless.

As a result the City put a moratorium on converting SROs back in 1985 because there was a wave of landlords kicking out their poor tenants, converting to proper apartments and making a bunch of money. A year later they put in place a process whereby you can convert an SRO, but you have to prove that the tenants haven’t been harassed at any point in the past 3 years. To get the signatures required you often have to pay the tenants $10,000 or more, and then the City will take 6-9 months investigating your claim – making sure you didn’t omit anyone who lived in the building, etc. If they approve you, then you get a “certificate of no harassment” which enables you to get a building permit to do the conversion.

The bottom line is that you need to know whether the building you’re considering is an SRO, and if it is you should see a certificate of no harassment before going into contract. Even top brokers lie and tell half truths when they’re selling SROs that don’t have certificates of no harassment. So you need to know how to determine SRO status yourself. There are two primary sources – NYC Department of Buildings (DOB), and NYC Department of Housing Preservation and Development (HPD). HPD has a web site that tells you details about buildings. If the number of “B Units” is greater than zero, then it’s an SRO. Keep track of the Block and Lot numbers that HPD has and then head over to DOB’s BisWeb site. There you enter the block and lot numbers and you can see the information they have on the building. One of the pieces of information is whether the building is SRO restricted. Remember that if any City agency thinks the building is SRO restricted, then it’s SRO restricted, though DOB and HPD are the primary sources of information for SRO restrictions.

DO NOT BUY an SRO without a certificate of no harassment unless you really know what you’re doing.

There are a few cases where buying an SRO without a certificate of no harassment is OK…

First, is if you want to be an SRO landlord. It’s not easy, but it can be profitable. Fully occupied SROs go for $600-$800K. If you have a typical 4 story building with two units per floor, each giving you $650, then you’ve got a rent roll of $5,200. If you can get a mortgage that should more than cover the mortgage payments and expenses. HOWEVER, do watch the taxes – they can be really high on SROs and wipe out any profits. I saw one in East Harlem that paid $25K/year in taxes.

Second, it’s OK to buy an empty SRO if you’re OK with your renovations not being done for 5 years (3 years of waiting + 1 year of review + 1 year of construction). If you can get the current owner to provide a sworn statement that it’s been vacant that can reduce that time frame. You can live in it during that time but you’re only allowed to do “repairs and maintenance”. If you do anything to convert the building you can get fined for it and that violation can make it impossible for you to EVER convert the building. It can even make it difficult or impossible for the next owner to convert the building. In that case you may need to bring the building up to current code as an SRO first, clear the violation, and then reapply for the certificate. That means you pay for renovations twice.

#3 – Look For Realistic Sellers

There are a lot of townhouses on the market right now that are completely unrealistic about their price. Even the ones that have realistic owners typically price their places $200,000 higher than they know they’ll sell for. In our case it was listed for $795K and we purchased it for $530K. Pretty much the only ones that are realistic are estate sales. We got ours from TPE Townhouses Harlem (a part of Tahl Propp Equities). They bought 11 townhouses and didn’t develop them quickly enough and then needed to liquidate them when the market went south. So there are people other than estates who are realistic…

The only way to know if the seller is realistic is to put in a bid. We saw 30 places and put in bids on 7. In one case it was a realistic seller, but we pulled the bid after having second thoughts. In another case it was a short sale and they wanted all cash. The place on Astor Row was looking for people who were bidding based on their gut, not the numbers. In another case there was already an accepted bid and they went with that offer (we later learned that our offer was about $10K less). Given all the bids you’ll be putting in and how much you need the sellers to come down, it’s critical that you have a real estate broker who’s great at bidding aggressively. They need to pull out every trick in the book to get you the price you should pay. If you need a broker with excellent bidding skills, we’d highly recommend Maria McCallister of Barak Realty.

One assumption I made during our search was that eager sellers would list their properties with brokers who would market them aggressively. Right at the end I realized that wasn’t true. Back when the market was hot there were brokers who would get listings and then not market them because they didn’t want to share the commission. (Not every broker in NYC is part of REBNY, which requires co-broking.) Back when Harlem townhouses were so hot you couldn’t help but sell them, it wasn’t a bad strategy. But I had a friend who listed his place in 2008, before the crash, with one of those brokers. She got him into contract for $1.4M, but it fell through. Then the crash happened. A lot of time passed and she got him into contract again, but that one fell through as well. He finally sold the place earlier this year for $775K. By the end he was sorta desperate to sell and was bleeding financially. So those brokers do have motivated sellers and for one reason or another they manage to keep the listing. That particular broker was flat out lying to my friend. She told him she was advertising in the NY Times (she wasn’t). She said she listed his place in the REBNY systems, but our broker confirmed she wasn’t.

That means there is value scouring the web for small real estate companies that have some townhouse listings. Typically they don’t tell you the address or the price and are pretty obscure about other details as well. When you see the properties you need to do things differently. Start by seeing the place on your own and do not mention that you have a broker. Then bring your broker in later after you’ve started initial negotiations. When we wanted to see my friend’s place his broker pulled every trick in the book trying to not get us in before the contract with her buyer was signed. It was only when she realized I was standing there texting everything she did to my friend that she sorta stopped playing tricks.

#4 – The Block & Immediate Neighborhood Can Make A Huge Difference

Real estate values in Harlem vary widely from block to block. We didn’t understand why one townhouse down on 112th was asking so much until very late in the process when we realized how nice it was over in South Harlem (SoHa). Anything close to that goes for a premium. Up in Hamilton Heights you cross Amsterdam Ave and you can go from one of the best blocks anywhere in Harlem to blocks that are pretty sketchy. If you don’t already know Harlem, it can take some time to be able to discern the good areas from the bad.

Before you go into contract on a place go there at night when it’s nice weather and people are out on the street. It’s best to do it a few times to really get a feel for the place. Ask yourself whether you feel safe. If there’s loud music ask yourself how you’ll feel about that when you’re having guests over for a barbecue. Look for possible drug dealing. New York doesn’t really have a gang problem, but look for “rough” groups of kids who might hassle you. But don’t be too critical on that last point. We were going by one property and saw a group of kids outside a building. About 5 minutes as more and more of them arrived and they subsequently left we realized it was Friday night and they were just meeting up to go out clubbing. If they’re standing around laughing an joking chances are they won’t be a problem.

#5 – Get A Property Shark Membership With Comps

One of the best things you can do is get a membership to PropertyShark.com. You can get an incredible amount of information about each of the buildings. You can see tax information, ownership history, pictures, building permits, violations, lis pendens (pre-forclosures), etc.

One of the great things they have is comps search. Not sure what something is worth? Do a 1/4 mile radius search around the building for the past 6 months and you can see what comparable properties are actually selling for (not just their list prices). One trick is to search for all building types but limit the search by square footage. 6,000 or 6,500 square feet max should find the townhouses you’re looking for.

#6 – Realize It’s Usually All About $$/sq. ft.

It’s uncanny how townhouse sales are consistent in terms of price per square foot. HOWEVER, it’s not as easy as you think to calculate the cost per square foot because the DOB has used two different methods to calculate square footage over the years.

First a little terminology… A townhouse “basement” is the floor that’s partly below street level. It’s the “garden apartment” in many cases. Below that level is the “cellar”. Floors that are completely below grade are not included in the square footage of the building (and cannot be used for sleeping). The confusion has come with the basement level which is partly below grade.

When the buildings were first built the basement was used for the kitchen and a bedroom for the cook/maid. Since it wasn’t where the family lived it wasn’t included in the square footage of the building. But we use townhouses differently now and the basement is considered living space, so it is now included. Problem is, the DOB never went back and recalculated the square footages of buildings calculated the old way. That throws off the calculations of cost per square foot.

The important thing is to be consistent and compare apples to apples. How the square footage is calculated can make a big difference. Let’s say a building has 1,000 sq. ft. per floor and 4 stories including the basement. That means it’s either 3,000 or 4,000 sq. ft. Now, if it sold for $1M then the cost per square foot was either $333 or $250 – a HUGE difference. So you have to be consistent one way or the other. On Property Shark you can see the building’s dimensions and whether it has an extension on the back. If there isn’t an extension then it’s easy to calculate. However sometimes the extension is included in the length of the building and sometimes it isn’t. So there are times when you just can’t tell. If you see a C of O in the past 10 years or so, then you can trust the official square footage of the building and know that it includes the basement.

One other thing to remember is that, unlike apartments, townhouse square footage includes the exterior walls. A considerable amount of the square footage can be walls. For example our place has an exterior dimension of 15′ x 58′ or 870 sq. ft. per floor. The brick walls are about 1′ thick. We share one wall with the townhouse next to us, so brick to brick our square footage is 13.5′ x 56′ or 756 sq. ft. If we did 4 inch studs on all exterior walls that would reduce things further to 12.8′ x 55.3′ or 708 sq. ft. That’s a huge difference from 870 sq. ft – nearly 20% of our square footage is exterior walls.

As you get to know the market you’ll understand the value of buildings and a quick calculation can give you an approximate price. “Why are you asking $400/sq. ft. for a building in poor condition?” can be a fun thing to ask the listing broker… 😉

And one side note – since it is all about price per square foot – if you’re tempted to put in double height ceilings when you do your renovations remember that you’ll be reducing your square footage and devaluing your property.

#7 – Know How Much Renovation Costs

Most of the townhouses in Harlem have 100 year old plumbing and nearly as old electrical systems. Very few of them are properly insulated. Most have rotten floor joists under the bathrooms. That means they all need major work. Never assume otherwise. And replacing things like plumbing, electrical and insulation in an old building requires skilled workers who are able to do their work surgically. Assume plumbing and electric will cost you $150K. If you buy a total shell like ours you’ll be spending at least $150K, probably $200K, just on new structural components. Windows can run you $1K/window for good windows (Harlem townhouses have some HUGE windows – we have one that’s 4 1/2′ x 7 1/2′ and others that are 3 1/2′ x 9′ – the place on Astor Row has a window that’s 5′ x 7′ and on a landmarked exterior where you’re required to use relatively expensive windows).

Then there’s the new building code… In 2008 the City implemented a new building code. The prior building code was from 1968. They didn’t change that much but what they did change can be expensive. For starters more buildings need sprinkler systems – that will run you at least $50K since sprinkler systems have to be done with cast iron pipes that won’t melt in a fire. You’ll also need at least one “handicap adaptable” bathroom per unit. If you’re thinking about an elevator, the minimum size just got a lot bigger. If you’re trying to change your C of O (e.g. converting an SRO) you have to bring it up to code – so all of that may be necessary…

In general, townhouses that look like they’re in pretty good shape will probably need at least $250K in renovation just for new electrical, plumbing, bathrooms and kitchens (though you may be able to defer that cost for a few years). For bigger projects you need to budget $150-200/sq. ft. for a pretty basic job. High end finishes will run you even more. That means a townhouse in poor condition with 4,000 sq. ft. can easily have a renovation that costs $800K. You can do it for less, but you really have to work hard to find a reputable contractor who can do things inexpensively and then you have to scrutinize every line item on the budget and spend countless hours learning about the options for every major system in the building.

And don’t forget all the little costs – the architect will want about 10% of the construction cost. Then you’ll need to budget money to carry the renovation loan during construction. Just those two can easily be $100,000 or more.

Before you bid on a place, conservatively estimate the future value after renovations and then deduct over-estimated renovation costs. The purchase price + renovations should be less than the future value. If it’s not, lower your bid.

Good luck!

The Crazy And Practical Sides Of “Green Architecture”

Posted on March 12, 2010 by BeatingUpwind

Yesterday we went through a townhouse that had been LEED certified (silver certification). Listening to the builder describe what it took to achieve LEED certification was almost comical.

Roof Insulation – The inspector kept telling him the roof insulation fine, they’d close up the ceiling, and then be told it wasn’t OK at which point they had to tear all the sheetrock off the ceiling and fix the problem. How “green” is it to waste that much sheetrock?

Plywood – “Green” plywood costs 3 times more than regular plywood. Isn’t all plywood made of recycled/waste material? I don’t get it…

Green Paint – …is just bad paint. It doesn’t adhere very well and the color doesn’t match properly so you can’t just touch up a problem – you have to repaint the entire wall. How is that “green”?

Dumpster Recycling – Putting the waste material through recycling instead of just sending it to a landfill costs about 40-50% more. That one I sorta understand, though I wouldn’t want to pay for it.

It just seems to me like a lot of LEED certification is just trying to make money on an already expensive product.

There are parts of green architecture that make sense to me – the ones that save you money. Good insulation, energy efficient heating and cooling… But charging 3 times as much for plywood is just crazy.

We’re going to stick to just being energy efficient and leave all the stuff with needlessly inflated prices to the people who seem to have way more money than we do…

Upper End Of Harlem Townhouse Market Is Doing Better

Posted on March 9, 2010 by BeatingUpwind

If you own a townhouse in Harlem you’ll be happy to hear that the market has hit bottom and is now starting to go back up. A few months ago I pulled a list of Harlem townhouses that had sold over $1M and the list was pretty short (only 5), the highest price was just under $1.7M and the price per square foot was pretty miserable. PRIME locations like Strivers’ Row were getting in the mid-$300s/sq. ft. and ones that needed significant TLC on decent blocks (like Hamilton Terrace) were selling for just under $300/sq. ft.

Well, if you bought at those prices I think you bought at the bottom of the market. Things are much better now. The number of sales over $1M has doubled to 10 for the past 6 months and at least one of the properties is back over $500/sq. ft.

And here they are…

262 W 139 St (Strivers’ Row) – $1.85M, 3,660 sq. ft., $505/sq. ft., two family with an owner’s triplex over a ground floor rental – This place is ABSOLUTELY IMMACULATE. It was an over the top renovation planned back when you couldn’t help but make money flipping townhouses in Harlem. Things didn’t go very well for the developer/seller, but the new owner has a stunning place to live (with a garage!)
14 W 120 St (Mt. Morris) – $1.385M, $3,37 sq. ft., $456/sq. ft. – 18′ 4 story brick townhouse literally across the street from Marcus Garvey Park. SRO restricted. HPD says it has one class A apartment and 9 class B rooms. For some reason DOB has it classified as 4 family, but is aware it’s SRO restricted.
116 W 120 St – $1.485M, 3,636 sq. ft., $408/sq. ft. – 20′ 4 story painted limestone townhouse. Surprisingly this is an SRO restricted old law tenement. HPD says there is one class A apartment and 6 class be “rooms”. DOB still classifies it as an old law tenement, but doesn’t realize it’s SRO restricted.
7 W 119 St (just outside the Mt. Morris Historic District) – $1.098M, 2,794 sq. ft., $393/sq. ft. – This was a shell and was recently gut renovated with an uneven mix of high end and low end finishes. We went through it. The building is one of the smallest townhouses you’ll see – 14′ x 47′. The rooms in it are TINY and the “back yard” is just a small deck. Our couch wouldn’t come close to fitting in the living room. It’s a technically a 2 family since there’s a VERY small studio apartment in the front half of the ground floor. I have no clue how they’ll rent such a small space. It should have been made into a single family. In my opinion the buyer over paid, but that’s a good sign as far as the market goes.
106 W 118 St – $1.275M, 3,400 sq. ft., $375/sq. ft. – 17′ x 49′ 4 story brownstone. It’s a legal 3 family, that was converted about 10 years ago.
15 W 122 St (Mt. Morris) – $1.375, 4,180 sq. ft., $328/sq. ft. – 18′ x 53′ 4 story brownstone. This is technically an SRO. HPD shows it having one class A apartment and 8 class B rooms. However, DOB shows it has being an SRO-restricted 2 family.
590 W 152 St – $1.2M, 3,744 sq. ft., $320/sq. ft. – 16′ x 52′ 4 story limestone townhouse with a C1 commercial overlay on it’s zoning. Like the last one, HPD shows it having one class A apartment and 8 class B rooms. However, DOB shows it has being an SRO-restricted 2 family.
76 Edgecombe Ave – $1.436M, 4,611 sq. ft., $311/sq. ft. – This is a lovely 19′ brick townhouse on a corner lot. There would be incredible light in the building since the long wall faces south (too much for my tastes, but I know others like southern exposures). It’s a completely legal 4 family with no SRO restrictions.
226 Lenox Ave (Mt. Morris) – $1.25M, 4,932 sq. ft., $253/sq. ft. – A very grand 20′ brick townhouse that was a former funeral parlor. Curiously this is technically a rooming house with no apparent SRO restrictions – somehow with the funeral parlor in there they avoided SRO status. In addition to the funeral parlor there are 2 class A apartments.
146 W 136 St – $1.1M, 4,590 sq. ft., $239/sq. ft. – 17′ x 56′ 4 story townhouse. It shows as 3 family, but DOB is still showing it as SRO-restricted (probably an error). The new C of O was just issued a year ago, so this is newly renovated. This was an incredible deal. The weird part is I can’t find any record of it having been for sale, so there has to be more to this than you can see at first glance.

So there you have it – the top sales for the past 6 months for Harlem townhouses. Considering that just about every week a townhouse will sell in Brooklyn for over $2M, that’s sorta a sad lot by comparison, but at least things are better than they were a few months ago.

Where things are selling…

It’s also interesting to note that none of the sales were in Hamilton Heights / Sugar Hill. 6 of the 10 were south of 125th in and around the Mt. Morris Historic District. Given that our place is in the same area the good news is that we’ll have no problem with the future value appraisal for our rehab loan. It would seem our place will be worth about $400/sq. ft. when it’s completed.

Prices on shells will go up too…

That brings up another point… The sum total of all of these numbers is that when the top end of the market goes up, everyone goes up. Let’s take our case. When we were bidding I was thinking our place would be worth maybe $325-350/sq. ft. when it was done. So if we put $150-200/sq. ft. into it I had to subtract that from the finished value for things to make sense. We bought at $122/sq. ft. so we’d be safe no matter how you looked at it (provided the market didn’t continue to go down). Now that the top number is $400/sq. ft. things are significantly better.

I still think the biggest risk are the ones in the middle that need more work than you might think. It’s still easy to over pay for those properties. The best bets are shells and ones that are recently renovated.

Buy now! Buy low!

Unless there’s more economic turbulence, I’m firmly convinced now is the time to buy a Harlem townhouse. The trick is finding one in a decent area, without SRO issues, where they’ll sell low.