How We’re Configuring Our Townhouse

I thought I’d share how we finally decided to (re)configure our townhouse… It’s a 5 story brownstone. We’ll have a 4 story owner’s quadraplex over a duplex rental unit (that has “accessory” space in the cellar)…

Layout of 168 West 123 - brownstone in Harlem

Starting at the top… There will be a roof deck on the rear of the building. We only learned after buying the building that we had views of the midtown skyline (off in the distance). Mind you, climbing up all those stairs to get there won’t be a lot of fun, which means we’ll need some sorta buzzer system for the front door. We’ll eventually mount a retractable awning on the bulkhead for shade. We opted for bulkhead windows instead of a skylight because they let in more light in the winter and less in the summer.

There is some dispute on the proper width of the bulkhead. The architect has a 3 foot passage to the side of it, the plan examiner says it’s a “side yard” and should have an 8 foot passage OR be the entire width of the building with a ladder over it. The architect noted that if he encloses the walkway it becomes interior space and 3 feet is appropriate. We’re still trying to figure out which solution we want to go with.

The next floor down, the 4th floor of our unit (8-9′ ceilings), will be art studio space for Dan. He’ll have a clean studio / office in the front of the building, and a dirty studio in the rear of the building. The small utility room in the middle will be his wet area. The floors in all his studio space will be commercial grade vinyl flooring (inexpensive and practical). There will be clerestory windows letting lighting from the stairwell into the front room (which is on the North side of the building). We’ve configured it in a way where the next owner could turn the utility room into a bathroom and then have two additional bedrooms / playrooms, etc.

The 3rd floor of our unit (9′ ceilings) will have the master bedroom in the rear and a spare room in the front. The spare room will most likely be a den / exercise room – have a treadmill, a couch and a TV. Like the clean studio above it, the den will have clerestory windows letting in light from the stairwell. We wanted the bedrooms in the back since the back of the building should be quieter.

The 2nd floor of our unit (one floor up from parlor, 10′ ceilings) will have the spare bedroom in the back and a home office in the front. Having the office in the front achieves two goals… First, the office isn’t noise sensitive, so it’s on the noisy side of the building. And second, it’s used during the day, so air conditioning bills will be lower since there’s far less heat gain on the North side of the building. (We’re using a mini split ductless system where each room is a separate zone). On this floor, attached to the bathroom is the laundry room. Having been in apartments for the past 20 years, we can’t wait to have a washer/dryer in our unit! Oddly it’s one of the things we are most looking forward to.

Our original plans had the 2nd and 3rd floor swapped, then we realized that we’ll be going up and down stairs to the office a lot more than we would be going up and down to the master bedroom, so we put the master bedroom up higher and the office down lower. Swapping the floors also lets us have a laundry chute from the master bedroom closet directly into the laundry room. We’re going to love that feature!

The parlor floor (10.5′ ceilings) will have the living room, dining room and kitchen. This is where we had to get a special reconsideration to have an open floor plan since code would otherwise require having 1 hour fire rated walls around the staircase and from the staircase to the front door. I know some people hate having front doors open into kitchens, but we saw so many narrow unusable living rooms that we decided to put the living room in the rear where it could be more spacious. But it does mean that the kitchen design needs to be pretty flawless since it will be people’s first impression of the house. One thing we have noticed is that the living/dining/kitchen space is nearly identical to our old apartment. This is a 15′ wide townhouse – we may have 6 bedrooms, but some things are more on the modest side.

There will be a narrow 4′ wide deck with a pergola off the living room. We kept it narrow so the tenant’s window would still get plenty of sunlight, and we added the pergola (which we’ll have vines growing on) to give us some shade in the summer. Here’s a diagram showing how it will look…

Rear deck with pergola on Harlem Townhouse

From the beginning of our process we knew that we didn’t have the biggest townhouse and as a result our design choices were a bit limited. There just wasn’t the space (or budget) to be all that extravagant. Where we were a bit extravagant was with the staircase. It will have a 3′ x 6.5′ lightwell running down the middle of it that will help get light deeper into the core of the building. We’re also going with open risers to help let light bounce around. From the beginning I knew the stairs would be the dominant design element in the building. To that end our architect really stepped up and has given us an incredible staircase design. You can see a bit of it in this diagram…

Stair layout in a Harlem townhouse

Basically there will be swoopy translucent plastic (or fiberglass) panels that will be attached to simple metal framing. Because it’s reducing metal work it should be a fairly economical solution. It’s also changeable. I had thought the staircase would permanently define the space, but because the panels can be redesigned and executed in different materials, there’s nothing permanent about it. Not shown in the diagram is the architect’s solution for the “railing” along the hallway. We’ll be taking the existing floor joists cutting them down into thin strips and creating a “screen” (wall) with vertical strips of old floor joists. That will be our version of “original details” and should look pretty incredible if we get the right balance of colors and textures in the space.

Continuing down the building… The rental unit will have smaller rooms that are still a decen size (i.e. the bedroom will be 175 sq. ft. and the living/dining room 260 sq. ft.). We’ll be putting in a decent Ikea kitchen (not bare bones, but still Ikea). One of the things we’re debating currently is the appropriate level of security for the rental unit. Our options are metal gates/bars on the doors/windows -or- laminated security glass with a security break sensors in lieu of gates/bars. Gates and bars will feel more secure, but it may seem like you’re in a prison.

The rental will be a bit of a duplex. I say “bit of” because it incorporates cellar space which can’t legally be a bedroom. It can be a media room, a workspace for an artist or craftsman, or a home office. Because that’s the south-facing wall, there should be plenty of light down there so it won’t feel too much like being in a cellar. What this means is is that it’ll be far more than a 1 bedroom, but not really a two bedroom. The tenant will also have their own laundry room in the cellar.

The cellar will also have the mechanical room and storage space for us. There’s this incredible arched brick ceiling in the “vault” under the “front yard” which we’ll be repairing/restoring. This townhouse is rather unusual in that it has a separate entrance for the cellar under the stoop, so we don’t have to go through the tenant’s space to get to the cellar.

In terms of utilities we’ll only be providing heat for the tenant. We’re separating all the other utilities – gas, electric, even water. Given how the boiler will work if we were to put in separate heating for the tenant the heating system wouldn’t run at optimal efficiency. So it won’t cost that much more to give the tenant heat. We don’t want to have the typical over heated New York apartment. Instead, we’ll keep it at a temperature where we’re comfortable in a light sweater but not so cool that our hands get cold. That will be lower than the minimum heat required by NYC, so the A/C units in the rental unit will be “mini PTAC” thru-wall units which can also provide supplemental heat as needed to keep the tenant comfortable. That means we’ll need to have the tenant sign something saying they understand they aren’t getting full heat for their unit.

I know Julia Angwin had mentioned on her blog at the Wall Street Journal that she had a tough time trying to figure out if she still wanted telephone jacks. Our strategy for voice and data is fairly aggressive, but also a bit conservative. Half of the closet in our home office will be a mini “server room” complete with rack mounted servers, cool air intake and warm air exhaust. (Dan and I do web projects for a living – we need all that sorta stuff). All voice, data and security will “home run” to that closet. We’re assuming we’ll continue to have a Vonage VoIP system, so we see won’t have a dedicated phone line coming into the building. Other than in the server closet there will be only two voice jacks – one in the office for the fax machine and one in the living room for a phone. We’ll also have Ethernet jacks throughout the house even though wireless will be our main form of connectivity. Primarily we’re putting Ethernet jacks next to cable TV jacks because we believe video and entertainment over the Internet will be common in the near future and the video/entertainment boxes may not support wireless. The Ethernet jacks will also be used for wireless routers – we assume we’ll need several to properly cover the entire house.

There’s a lot more detail I could go into, but that covers the basics… It’ll be fun to see it all come together…

Mount Morris Park Harlem Townhouse Sales Early 2010

I’ve been meaning to do a series of blog posts on the state of townhouse sales so far in 2010 by neighborhood. Here’s the first in that series – covering the neighborhood that’s near and dear to us – Mount Morris Park…

Generally I find there are two groups of townhouses – 1) ones that need $500K+/- in renovations, and 2) ones that don’t (at least not right away).

On the high end…

Address Date Price $/sq. ft. Notes
226 Lenox 02/10/10 $1.25M 253 20′ wide, 5 story, former mortuary, needs work
22 West 120 03/31/10 $1.65M 543 Steel and concrete minimalist interior
4 W 123 06/01/10 $1.65M 647 17′ wide, single family, 2,547 square foot (probably not including ground floor), some great details but needed work
5 W 121 07/08/10 $1.55M 353 20′ wide, three family, 4,393 square foot
19 W 120 08/12/10 $1.8M 370 20′ wide two-family w/ original details, 4,865 square feet
115 W 120 08/20/10 $1.975M 412 20′ wide, 4 story, two family, approx 4,800 square feet

The very first one, 226 Lenox was a bit of a special case – it’s probably at the high end of the ones needing around $500K in renovation. Among the others you can see the trend is generally up (slightly). The standard price seemed to be $1.65M (no matter what the size, oddly), but now that’s been broken and prices are just under $2M.

On the low end…

Address Date Price $/sq. ft. Notes
21 W 120 03/01/10 $425K 95 20′ wide, 4,472 square-foot fully occupied SRO
168 W 123 03/03/10 $530K 147 (117) Our place. 15′ wide, 5 story, totally gutted shell with fire damage, SRO with a certificate of no harassment
162 W 120 03/04/10 $500K 123 17′ wide, 4 story limestone, 4,058 square feet
104 W 120 04/30/10 $550K 194
20 W 120 05/25/10 $700K 127
128 West 123 06/30/10 $415K 196 4 story brick townhouse with mansard roof
183 Lenox 08/25/09 $795K 192 19′ wide, SRO w/storefront, 4,139 square foot

The first thing to notice is that this is still a great time to buy a townhouse shell in Harlem. There’s over a million dollar difference between the price of shells and the high end places, but you can renovate a shell into a high end townhouse for about $600-$800K, so you’re likely to net between $300K and $500K on the renovation.

Price per square foot is tricky with shells. Taking our place as an example – officially it’s 4 stories and 3605 sq. ft. However, in actuality it’s 5 stories and 4500 sq. ft. Oddly, I thought the number of stories would get fixed as we went through the DOB plan approval process, but I saw the plan examiner look right at the plans and call it a 4 story building. However, they are now billing it as having 4,500 sq. ft. – at least that much is getting corrected. What this means is as you look at townhouses you need to calculate the real square footage and determine your own price per square foot.

The bottom line is, like the upper end, there is an upward trend in prices for shells. Not counting the fully occupied SRO (which you wouldn’t want to touch with a 10′ pole unless you wanted to be a landlord, not a home owner), our place was pretty much the low price on a price per square foot basis at $117/sq. ft. The others since that time have been more money on a price per square foot basis (which is how you really need to price buildings like these). Assuming the recent ones are 4 story buildings misclassified as 3 story buildings – that means the actual price per square foot for shells is now in the mid-$140s.

Eggersmann Gives Lower Price Option For Kitchen

A while back we discovered Eggersmann at the A&D building and really liked them. In fact we liked them better than Poliform which is saying a lot – our last kitchen was by Poliform and Poliform’s sense of design resonates with us, but Eggersman is even better (in our opinion). When we first talked to them, Eggersmann was nice enough to mock up a kitchen for our space and quote us a price, but the price didn’t really work with our budget.

Well, months passed and then someone at Eggersmann found my previous blog post mentioning them. They contacted us and asked if we had made a choice yet. Thanks to problems with DOB, we hadn’t. They noticed that I had mentioned that their last price was too high, and offered to design a lower cost kitchen. Our kitchen design and layout had changed somewhat since their last proposal. The biggest change was moving the coat closet further into the building – across from the stairs rather than across from the kitchen. The other change was getting rid of the upper cabinets and taking the cabinets at each end to the ceiling (which is 10.5′ tall). The net result was a 1/3rd savings in cost. We need to see where the other numbers come in, but we’re thinking we just might be able to afford an Eggersmann kitchen, which is quite exciting…

Dan and I had gone through several rounds of kitchen designs but hadn’t been 100% happy with anything we came up with. Many of the designs reminded us of our last kitchen and we really wanted this one to be different. Finally I proposed a layout one day and Dan liked it. That’s the layout Eggersmann laid out (and improved slightly). Here are some 3D renderings Eggersmann did for us…

3D Rendering of Harlem brownstone kitchen

Instead of having coat closets across from the kitchen, we’re going to have a bench where people can sit and talk. This will essentially be the view from the bench. The door to the right is the front door. The upper panels in that door will be glass. The column to the left will house a Sub Zero 736 TCI fridge. At over $6,000 it’s our one huge extravagance in the kitchen, but we loved the 700 TCI we had in our last kitchen… The shelves in the center island will be used for wine and cookbooks. Dog leashes and the like will go in the cabinets below.

3D Rendering of Harlem brownstone kitchen

This shows a few of the details more clearly. We’re envisioning Corian (white) counter tops, a stainless back splash. The range is a compromise. We’re going with a 30″ Electrolux when Dan would really love a 36″ Wolf, but it costs nearly $4,000 more. The range hood was one of our challenges. The shape of it will probably be a bit different than what you see, but luckily we can exhaust directly out the wall, so no chimney is needed. We’re also thinking of put lighting on the top of the shelf as well as the bottom so the wall isn’t so dark.

3D Rendering of Harlem brownstone kitchen

Seen from a different perspective… The wall to the right will be exposed brick, and the front doors will have glass in the top panels. The window looks huge as it is, but looking at it now I realize it wasn’t drawn big enough. It’s 4 feet wide, 7 1/2 feet tall, so it will be another foot higher (at least). It won’t be one huge piece of glass. Instead it will look a bit like a french door (two vertical casement windows).

3D Rendering of Harlem brownstone kitchen

This last one shows how we’re hiding the microwave in a nook with additional cabinets. Up by the ceiling, above the cabinets, will be the A/C. We’re going with a “mini-spit ductless” system and that location gives us a nice place to hide the unit. (Not going with concealed units is another budgetary concession). The large wall will be exposed brick, so while the cabinets will be white / off-white, there will be plenty of color and warmth in the kitchen.

The other thing I’ve realized looking at these renderings is that the radiator we were going to put under the window will conflict with opening the cabinets. Dan and I are debating where the radiator should go.

So we’re crossing our fingers hoping we can get the Eggersmann kitchen. It’ll be really wonderful. Their sense of design is really special and their fit and finish is incredible.

Looking For A Shell In Harlem? Check out 243 West 120th Street

After we took the first look at the place we wound up buying, we noticed 243 West 120th Street and had our broker get us in even though it wasn’t officially on the market. I really liked this building. We bid on it, but our bid wasn’t accepted. It’s now officially back on the market and the price has been reduced to $795K. If you’re looking for a shell I think it’s one of the most interesting townhouses on the market – and possibly one of the best investment properties – if you can get it for the right price.

There are two big things the building has going for it. First, location – it’s practically in the heart of all the redevelopment and buzz that’s happening in South Harlem. Walk across St. Nicholas Avenue and you’re in the middle of everything that’s hot and trendy in Harlem – Nectar wine bar, Moca Lounge, etc. And it’s also close to the A,B,C and D trains at 125 – so it’s just 1 stop from 59th Street.

The second thing the building has going for it are its development possibilities. You can (and probably should) invest a $1 million in this building, and when you’re done it’ll be worth more than you put into it (if you’re smart about how you spend the money). Because most of the lot is within 100 feet of St. Nicholas Ave, it has a FAR just under 6 (which means you can expand the building far bigger than you can other townhouses that have a 3.44 FAR), and it’s got a C1-4 commercial overlay, so you can have the option of a commercial tenant on the ground floor (but it has to be one that services the immediate neighborhood).

It’s currently a 4 story building. If I were buying the building I’d push the back wall back to maximize square footage and add two partial floors on top. I’d configure it with three units. Because the building is only 17 feet wide you don’t really want to make it more than 3 family. The basement would be one unit with the possibility of a commercial tenant. The parlor floor could be a two bedroom apartment, and the top two existing floors plus the two floors I’d add would be a large quadraplex. You could step back each of the additional floors and allow for outdoor terraces making the quadraplex an incredible space with tremendous outdoor space…

243 West 120th Street facade

In the picture above you can see that there is an alley along the west side of the building. There are a number of existing windows in that wall. The rules about lot line windows apply, but it’s a great to have windows in your bathrooms and a wall you can exhaust vents out of.

243 West 120th Street stoop

As you can see the façade and the stoop need a lot of work. But as you move inside the original floors and a some original details are still intact…

243 West 120th Street hallway and stairs243 West 120th Street original details243 West 120th Street hallway243 West 120th Street top floor

243 West 120th Street rotten ceiling

(click on any image to see a bigger version of it)

I have to say going through the building was a bit unsettling. There were clothes and sleeping bags left over from when homeless used to live in the building. The staircase was a bit rickety, and there was a dead cat in the basement. But all of those things are easy to fix.

While you can buy this building and not expand it beyond it’s current 3,400 sq. ft. it’s best if you plan on making the building substantially larger. The construction will be pretty expensive given that you’ll want to add two floors and push the rear wall back, and you may need to reinforce the foundation to support the additional floors and you might want to lower the floor in the cellar – none of which comes cheap. But given the area, you can spend the money and have it come back to you.

In terms of price it’s currently at $795K. Townhouses typically sell for around $200K off their asking prices, so I’d guess it’ll sell for around $600K, maybe a bit higher. $600K would be $176/sq. ft. which is high for a shell, but the location and development possibilities explain why it’s at the high end for a shell. Even if you spent $200/sq. ft. renovating it (no expansion) you’d still be under $400/sq. ft. which is supported by the comps. If you want to expand the building I think you’ll find that cost effective as well.

I should also say something about the tax situation. The taxes are quite high – $9,664/year. Most townhouses pay about 1/3rd that amount. The current owner sorta messed up. He should have pulled a permit to convert it to 2-3 family, started construction, and gotten Department of Finance to reclassify the building and bring the taxes down. This is actually a good example of what I was talking about in the previous post – you don’t want to convert this building to 4 (+) family because the taxes will remain high and the additional rental income may not cover the higher taxes. 2 or 3 family makes a lot more sense in this case. If you can get it reclassified as 2 or 3 family, then the assessed value will drop to $10,200 (6% of the market value of $170K), which is far lower than the current transitional assessed value of $72,990. The taxes on $10,200 would be $1,745 – nearly $8K less than what’s being paid now. DOF will up the market value because you’re doing work on the building, but you’ll still pay substantially less than what’s being paid now.

It’s probably worth mentioning that we bid $575K on it back in November 2009 and it was rejected – we were told we weren’t even close. I would have gone up to $600K and possibly a bit higher if we had access to the money, but the ‘no’ was so resounding we never went back with another bid. It wouldn’t surprise me if the owner currently feels a bit firm at $795K, so it could take some negotiation to get the price you want…

Whether you get this building or another I recommend you have a real estate broker who’s an aggressive negotiator. Norman Horowitz (the listing agent) is a good guy, but I wouldn’t go to him directly since you will be wanting to negotiate a significant amount off the asking price. If you’re looking for a tough negotiator who really works for her clients, we recommend Maria McCallister of Barak Realty – she’s proven herself to us in both the sale of our apartment and the purchase of our townhouse.

West 123rd Street Brownstone Is Now Ours!

After a VERY VERY long time waiting, we finally closed on our brownstone on 123rd Street in Harlem.

We’ve been looking at townhouses in Harlem for about a year now and saw at least 30 different places (not including drive-bys). At first I was only interested in Hamilton Heights and Sugar Hill (aka “West Harlem”) which would have had us near the A, B, C, and D trains at 145th Street. Being two stops from 59th Street (on the A and D) seemed like it would be great. The nice part about Hamilton Heights / Sugar Hill is how stable the area encompassed by the historic district is. It really is lovely, but once you get outside of the historic district it’s hit-or-miss. The bottom line was that there was  nothing available in our price range on a block we wanted to live on. I’ll be doing blog posts in the near future on the various places we looked at and the reasons why they didn’t work out…

I really didn’t know that much about Central Harlem, but as Hamilton Heights & Sugar Hill started drying up we started looking at places further south and east. Strivers’ Row is stunning, but it wasn’t quite in our price range and the subway access was a bit bleak. Strivers’ Row townhouses do have garages, but that doesn’t help the people we want to visit us and work for us. The other issue in Central Harlem were the rather large and ugly housing projects that were built in the 1950s. I just refused to live in a place where I’d have to walk past something like that all the time. Other places were on the 2/3 train and while that was OK, it wasn’t as good as being on the A, B, C, D.

In early October our (wonderful) broker, Maria McCallister of Barak Realty, suggested we look at 168 West 123rd Street. Up to that point I had found most of the places we looked at. I’m not quite sure why I kept skipping over that particular listing, but (obviously) I’m quite happy she suggested it. As I went over the details of the property I realized the location was pretty incredible. It wasn’t near any big housing projects and it was within easy walking distance of the 2, 3, A, B, C and D trains. And since this was Central Harlem it was just 1 stop from 59th Street on the A & D trains. And the 2/3 gives us great access to the Upper West Side.

The building had the critical “certificate of no harassment” that you need to convert the building to 2 family. There is public housing close to our place, but it’s the type of building that you don’t know is public housing unless someone tells you or you’re particularly well-versed in the tell-tale signs. I knew the townhouse was one of a group of townhouses that were all being sold by the same owner – TPE Townhouses Harlem. At the time I didn’t know much about TPE or the story behind those particular townhouses. In the coming months I’d learn a lot more about them than I ever wanted to…

When we looked at the building we realized it was a total shell. There were no floors, no windows, not much of anything – just 4 walls, a leaky roof, and some rotting floor joists. It was sorta cool – you walked down into the cellar and looked up 60 feet to the roof. It was somehow very peaceful and had a strange beauty about it. Here’s a picture of the interior – it’s the view looking up. The timber you see are old floor joists (they happen to be some of the better, less rotted ones)…

Interior of a gutted townhouse shell in Harlem

As you can see, there are no “original details” to preserve. In other places there may be plaster walls, or original tile work, or old fireplaces. While we would have been game to take on a project with original details, they do create a bit of a problem since you have to do the construction somewhat surgically in order to preserve them, which will increase cost somewhat. None of that is necessary here. It also gives us a completely blank slate to construct whatever we want (and can afford).

The good part is that people with total shells are more realistic about the value of their place than other people are. Finding realistic sellers was one of the many problems we encountered in our search. Most owners just didn’t (want to) realize how far the values of their places had fallen since the height two years before. The reason we bought was because values were down about 65% from their high in 2007. That’s a hard pill to swallow for owners. Estates were some of the only people who were being realistic.

Another seller that was being pretty realistic was TPE Townhouses Harlem. They had purchased 11 townhouse shells in 2004 – 2005. They were all townhouses that had been involved in mortgage fraud starting in the early ’90s. Unbelievably the mortgage fraud was perpetuated by churches who typically would buy townhouses at inflated prices from accomplices and then take out the maximum federally-insured mortgages which they would promptly never pay. The church involved in the TPE Townhouses was Beulah Church Of God In Christ Jesus. I do not know the particular details of the Beulah case – just how it turned out. Based on how it turned out there’s a very good chance Beulah didn’t actually commit the fraud, but again – I don’t know. In some of the cases people would forge documents pretending to be the churches so the churches were involved but not guilty of any wrong doing. I do know there was a court decision in 2002 that determined that Beulah was the actual owner of the properties. TPE bought our particular townhouse from Beulah in 2004 for $1.13M.

TPE then seems to have wasted the next three years of opportunity. They could have developed and sold the properties at the height of the market in 2007 for a huge profit. In 2005 they took out a blanket mortgage on 11 townhouses for a total of $14.3M. They’ve developed the two most valuable buildings that are over on Frederick Douglass Blvd (8th Avenue) in the heart of “SoHa” (South Harlem – the new and upcoming area in Harlem that’s been recently gentrified), but they only did that development recently. The other 9 townhouses they decided to sell just before the market crashed.

TPE put our place on the market in July of 2008 for $1.1M. In November they lowered it to $995K. In March of 2009 they lowered it to $895K and a week later reduced it again to $795K where it stayed for quite a while. We saw the place for the first time on 10/15 and put in an admittedly low-ball offer of $450K the next day. It was rejected and we were told our offer “needed to start with a 5”. Almost 3 weeks later, on 11/5, we came back with an offer of $500K. We then continued to take our time negotiating the price because some other properties came up that we were interested in. On 11/13 they reduced the price $100K to $695K most likely trying to see if anyone else would come in with a higher bid. At this point we gave our broker a ceiling price that we couldn’t go over and told her to see what she could do. By this point in our relationship with Maria we knew she was very good at negotiating price and we trusted her. After a few rounds of negotiation, the day after Thanksgiving (11/27) we got the call that the seller accepted a price of $530K. (That’s less than half what they paid for it in 2004 and what they listed it for a year an a half before).

We were thinking that since it was technically an all cash deal we might close before the end of the year. Boy, were we wrong! First things were slowed down by TPE telling their lawyers to put as little time into the closing as possible to reduce costs. I should mention that TPE is Tahl Propp Equities which is a big Harlem landlord that seems to own over 100 buildings in Harlem alone as well as some fairly large office buildings in Midtown. Tahl comes from a well-established NY real estate family. Propp was one of Donald Trump’s lawyers at one point. This sale was pretty insignificant to their overall operations.

Then we hit a wall with title issues. Given the sordid legal history of the building our lawyer insisted in using his own title agent and insurance company – not the one TPE was insisting we use. In fact, they wouldn’t even go into contract unless we either settled the title insurance issue or used their title company. So we waited. In a hotter market not being in contract would have been dangerous. But in this particular case we were pretty safe. It wasn’t in the best interest of the seller or the seller’s broker to get another offer on the place. They still have about a half dozen similar properties to sell. It’s much better that they make two sales than one at a slightly higher price.

It wasn’t until early February that the title issues got settled. The seller’s title company was actually a pretty good company so now we have two big, solid title companies that think the building is OK, which will help when we go to sell. We signed the contract during the (first) big snowstorm on 2/10 and the seller’s signed a week later on 2/18 and we closed yesterday, 3/3.

The closing was actually a bit up in the air there for a little while. Apparently the seller’s bank was giving them difficulty about it. Remember, they initially had a $14.3M mortgage covering 11 buildings. They’ve developed two of the buildings, and sold maybe half the others ones. It makes me wonder how well that loan is collateralized these days… I know our final payment went 100% to the bank (The Community Preservation Corp). I’m guessing a fair amount of the deposit went to the bank as well.

So now we’re working on plans with our architect. More on that soon…

Just some basic info on the building – It’s 15 feet wide, 5 stories tall (most are 4 stories). The usable interior space will be about 13 feet in width. It’s longer than most townhouses – 58 feet. That means we can have decent sized bedrooms of 200+ sq. ft. The ground floor and part of the cellar will be a rental unit (residential or commercial) which will help offset the cost of the mortgage.

Here are some pictures of the front and back of the building. The big window on the parlor level is nearly 8 feet tall and 4 feet wide! The front of the building faces north. You can see in the picture how there’s an alleyway between us and the apartment building to the right. This will be helpful since we can punch holes in the wall and have windows in the bathrooms, and vents for the kitchen range hoods.

Front of 168 West 123rd Street - A Harlem brownstone shell

The back of the building will be incredibly sunny since it faces south. Some of the windows you see are about 7 feet high and 3 feet wide – so the rooms on the back of the building will be incredibly sunny. Obviously the entire back wall has to be resurfaced and the brick repointed.

The back of 168 West 123rd Street

It’s a huge project, but it’ll be fun and the end result will be pretty spectacular. And no, we’re not doing the work ourselves. Everyone seems to ask that but it’s an absurd question… Just monitoring the work and choosing finishing materials will require an incredible amount of time.