A Beauty Parlor In A Church?

This past weekend I took a client through a new listing. It has a 1967 C of O as a church on the bottom two floors with an apartment (parsonage) on the top two floors. As we were meandering through the church part we saw something odd – a sink from a beauty parlor…

beautician's sink in a churchIt took us a while to figure out why a church would have a beautician’s sink… I’ll give you a hint – it was right next to this big jacuzzi tub…

jacuzzi tub in a churchIf you’re a WASP like me both of those images probably have you stumped. I mean what sort of church would have a 4+ person hot tub and a beautician’s sink just off the main gathering area? Spending time in a hot tub and getting your hair shampooed certainly weren’t part of any religious ritual I experienced as a kid (and I went to church 3 times a week and attended a Baptist/fundamentalist school).

Then it dawned on me… Both the jacuzzi and the beautician’s sink could be used for baptisms – one for complete immersion, the other for sprinkling water on the parishioner’s head.

So the next question is why is there a toilet in the baptismal room? I’m still trying to figure that one out… Anyone have an explanation?

I’m Now Officially A Real Estate Agent w/ Level Group

Well, it’s now official… I’m now a fully licensed real estate agent. I passed all my tests a couple weeks ago and then I interviewed at a few firms and in the end chose Level Group.

New Business Model

Level Group is a part of a new breed of real estate companies that are challenging the traditional business model for real estate companies. These new companies are based on a virtual office business model where the agents are more independent and essentially run their own businesses. The agents find their own clients, pay for their own advertising, and pay their broker a monthly fee that gives them access to listing services, etc. In return the agents get to “keep their entire commission” – though if the monthly fee is low there are transaction fees, but those fees are far lower than the 40 to 60% that’s typically taken out of an agent’s commission by a traditional broker.

The independent, virtual business model was a good fit for me. I like running my own business – I’ve been doing it for the last 10 years now. There are two big players in NYC with this new business model and Level Group is one of them. In fact Level Group (under it’s old name Pari Passu) was the first New York brokerage to go with the new business model.

Level Group’s Advantages

In the end I picked Level Group for a couple reasons. First, they understand that a virtual office business model doesn’t work very well if you don’t have good technology behind it. The other firm didn’t seem to really understand the importance of technology. Second, Level Group’s principal broker and founder (a real estate lawyer) are both personally focused on commercial real estate. While some may see that as a negative I saw it as a positive since commercial real estate is largely rational and numbers oriented. While I had really great interaction with the other company, rational & numbers oriented management just seemed to be a better fit for me.

A Catch 22 That Almost Ended Everything

There was actually a little drama right after I signed up. The first thing I needed from the broker was clarification on how I should handle blog posts. They came back with an observation that nearly ended the entire real estate pursuit for me… Agents can’t advertise other agents’ listings without permission and blog posts about properties (even if negative) are seen as advertising. Websites like Curbed and Real Deal get away with it because they’re not licensed agents.

The Catch 22 was that as soon as I became a licensed agent I was essentially barred from doing frank and honest blog posts about other agents’ listings. The problem is that honest/frank blogging is my marketing strategy to get customers. So if I’m an agent I can’t blog, and without blogging I have no customers – which makes it pointless to be an agent.

Luckily we came up with a solution… When I blog about active listings I’ll be obscure and won’t identify the property. It will actually be a good thing since being obscure will encourage buyers to contact me to find out details.

The second part of the solution is that I’m going to be really conservative and require all the buyers I work with to sign what’s called a buyer’s agency agreement. By default all agents work for the seller, not the buyer – even when they’re working with the buyer looking at multiple properties. (They’re legally subagents of the seller’s broker.) A buyer’s agency agreement changes that – it means the agent works for the buyer. If all the buyers I work with sign buyer’s agency agreements then I’ll never have a fiduciary obligation to the sellers (except when I have listings).

After a property is sold I will be able to identify properties and talk frankly about them as comps – I just can’t do it for properties that are for sale.

Need An Agent?

If you or someone you know are looking for an uptown townhouse and want an agent who’s been through the process and will be frank and honest with you – call me or e-mail me and I’ll be happy to help you in your search – 917-447-2572 / jay@beatingupwind.com

Harlem Rents Going Up

If you’re a townhouse owner with a rental apartment or two you’ll be glad to hear that rents in Harlem are going up. The latest report from MNS Real Estate shows that over the past year rents in doorman buildings are going way up…

Studios – Up 27%
1 BR – Up 19%
2 BR – Up 34%

The doorman buildings tend to be newer and are far more likely to be market rate apartments. I’m sure some of that is new, high-end buildings coming onto the market for the first time, still – 30% is a BIG rent hike.

Non-doorman buildings haven’t done as well…

Studios – Up 5.5%
1 BR – Up 5.25%
2 BR – Down 2.4%

The non-doorman buildings are generally the older apartment buildings that make up the bulk of Harlem apartments. They tend to be somewhat run-down and have minimal maintenance. There’s a reason why the rents in them are far lower. Many of the studios and 1 bedrooms are probably largely rent stabilized, which would explain their low increases. It’s interesting that the rents for 2 bedrooms actually went down slightly.

I’ve always wondered what the market rate for our rental apartment will be. The MNS report doesn’t exactly answer the question. Technically we’ll be a non-doorman one bedroom which is currently $1,723, BUT it’ll be new construction and it’s got more space than many two bedrooms (about 1,050 sq. ft.) with in-unit private laundry room, tons of storage, a bright room in the cellar that can be used for a home office or a media room, plus use of a garden. All in all I think market rate is probably a bit less than for a doorman 2 bedroom ($3,147). But $3,000 is a long way from $1,723.

When we were looking in 2009 we saw one townhouse on 130th Street that had been renovated very nicely. It was 18 feet wide – so just wide enough for two small bedrooms side-by-side. Even with little bedrooms they were getting #2,800/mo for one of the floor-thrus, and $3,000/mo for the other one. So you can get good money for Harlem apartments if they’re good apartments.

Either way, the increase in rental prices is good for townhouse owners who have an income unit. It means more of your mortgage expenses can be supported by rental income. In rough terms you can get another $200,000 in mortgage for every $1,000 additional you pay per month in mortgage payments. That drops to about $160,000 when you add in things like insurance and taxes (which you’d pay anyway), and you need to allot for months when you don’t collect rent, and if you share any utilities with your tenant you have to subtract that as well. Still, your garden apartment may have gone from $2,000 to $2,600 over the past year. The extra $600 could support nearly $100,000 more of your mortgage. Not bad – though bumping up an existing tenant’s rent by $600 isn’t wise. Still, the trend is up, so next time you change tenants you’ll see a nice bump in rental income.

40 Story Buildings In Washington Heights?

Our contractor took the week off this week (long story), so I figure I’d do a blog post I’ve been meaning to do for a while now… Whether really tall buildings are appropriate uptown.

Back in early May Quadriad proposed a set of 40(ish) story buildings for our old neighborhood – around 190 and Broadway. They’d literally tower over all the buildings around them. Here’s what they were proposing… Phase 1 would be three towers built on top of the 191 Street IRT station (the 1 line)…

Quadriad Phase 1 - 3 towers

Phase 2 would knock down a funeral home across the street and put up a 4th building that’s shorter…

Quadriad Phase 2 - 4 buildings

We got into a bit of a discussion with a friend of ours who lives quite near where these buildings will be built. She thinks they’re a horrible idea, but Dan and I sorta like them. Our friend’s argument is that they’re inappropriate for the neighborhood. Nothing in Washington Heights is 40 stories. I think the highest is 20-some stories. She prefers the “as-of-right” option the developers have proposed, which looks like this…

Quadriad As Of Right Proposal

To which Dan and I say “eh…” It’s just boring architecture.

Our friend’s other argument is that luxury condos (or luxury rentals) are a bad idea – that Washington Heights should remain largely affordable housing. The irony is that she’s one of those rare Manhattan Republicans. How a Republican can be opposed to the interests of developers beyond me – I thought that was one of the defining characteristics of Republicans in New York. The other thing is that the capitalist (Republican?) argument should be that more supply => demand is accommodated => lower prices. In other words, if you want Manhattan to still have affordable housing you need more units on the market to meet the demand since the more there is of something, the lower its price will be. Clearly there’s not much vacant land in Manhattan – that means you need to build up.

Plus, all major development projects these days include affordable housing units. The bigger the project, the more affordable housing units you’ll get. So if you want affordable housing in Manhattan you should be in favor of projects like this one.

I’ve also heard people say tall buildings uptown will overburden the transportation infrastructure. But the Quadriad site is literally on top of a subway stop and less than a 5 minute walk to another subway stop. We’ve got pretty good subway access uptown that’s no where close to capacity. They could easily double the number of trains if they needed to, or extend the C train to 207. Transportation isn’t really an issue.

So what this boils down to is aesthetics and zoning and perhaps historic preservation. I had an architectural design professor in college who said “if you break the rules you need to do something really special”. Yes, the 40 story towers break zoning rules, but Dan and I think they’re good enough to warrant the rules being broken.

That isn’t always the case. For example Graceline Court (the silver and pink building in the picture below) stands out on the Harlem skyline, but it’s just incredibly boring…

Graceline Court - tall building in Harlem

Harlem is generally zoned lower than Washington Heights, so this is potentially a bigger issue in Harlem than it is in Washington Heights. I’m actually very much in favor of tall buildings going up in Harlem – but I want them to be interesting to look at, and I don’t want (too many) historically interesting buildings torn down in the process. Graceline Court is just dull – I want something better than that. I’d love it if they build a 40+ story building on the empty lot at 125 & Lenox where the rumor mill says a Hyatt (?) may be built.

So I say Go Tall Uptown (and make it interesting)… What does everyone else thing?

Funny Real Estate Story

My mother-in-law was trying to sell her house in Toronto earlier this year (it’s currently off the market). She’s Catholic and she heard that if you bury a statue of St. Joseph in your yard, your house will sell. So she went to the local Catholic paraphernalia store (or whatever they call it) and asked for a statue of St. Joseph. They asked her what kind she’d like and she said whatever was least expensive since she was just going to bury it in her yard. The store clerk indicated this was pretty common and got her the statue.

She goes home and buries the statue in the front garden and the next day the house next to her sells. She’s thinking, “wow, this really works but I had St. Joseph’s back to that house, so I should reposition it so St. Joseph’s back is to my house”. She re-buries the statue and a week later the house across the street from her sells.

She still hasn’t sold her house, but St. Joseph is 2 for 2… Maybe she should get a neighbor to bury the statue for her next time.