Name: JD
Location: Chelsea
Favorite element: The original ceiling beams and the funky staircase that his friend designed.
Motto: If you are considering doing this, think twice. Really.
We had a chance to visit our friend over on 22nd street today, and almost conclude the house tours we started last fall.
What's going on?
This beautiful, but much in need of work, townhouse has been a lot of work for our friend. His original plans of buying it, fixing it up, and selling the apartments individually has fallen through as he ran into the incredible costs and red tape associated with updating an old building to current codes. It simply takes more money than he ever expected.
"When someone said it would take 30k to rewire this building, they had no idea what they were talking about." he says, "The price is more like 20k per apartment."
"If you are considering taking on a building to renovate and create an investment for yourself, think twice. It can be done, but if this is not your profession, it will take a bigger toll than you anticipate, both in terms of time and money."
As a friend in the trade told him, "In this busiess, you're going to be fucked ten times. You were lucky, you only got fucked a few times."
But our friend is upbeat. Rather than being a real estate developer (which has been a strain on his day job already), he is becoming a seller. While his own apartment is looking fabulous and is finished enough for him to live there, he is putting the entire building on the market next month. With luck, the past year's hard work and stress will give him a nice profit to move forward with.
MGR
Here are his tips:
- On reclaimed wood - It's great to use and looks better, but don't be fooled. It will cost you as much if not more to use as new stuff, since fitting it and making it work is always much more a job.
- On lighting design - Definitely think hard about your lighting design and hire a designer if you can. Lighting and electrical outlet placement makes a huge daily difference in your home that you will appreciate more and more with time.
- On old buildings - Don't think they are "better" or that they were built by "craftsmen." His building is 1855 and built just as shoddily as many things today. Many things in the original shell had to be fixed and straight lines are few and far between. "Those guys were just as interested in taking their lunch brake in 1855 as they are now."
- Lendy Electric - This was a great resource for all his electrical needs. You need to know what you want and not be naieve, but they are helpful, fast and have everything. Go upstairs.
- Contractor Juan Corona (646.479.9707) - Juan saved the day. When he had to fire his first contractor, Juan came in and did everything really well. His prices are fair and he is totally trustworthy.
- Gringer - They suck. Lost paperwork, lost order... took time, created headache's. Not recommended.
- Casablanca Fans - They are the best. Though they cost 10%-15% more, they are totally worth it. They are quiet, solidly made and the best looking.
- Ikea Kitchen Cabinets & Wood Counters - Awesome. Super cheap and nice looking. He bought the least expensive and loves them. Note: when you assemble them, glue them as well as screwing them together so they don't vibrate and last longer.
- Charles Malloy (Electrician) (213.926.2044) - Charles is brilliant, not cheap and talks A LOT, but he is an amazing resource and highly recommended. His specialty is working on very high end, complicated jobs, but he does smaller stuff. Works with Woodlawn Electric as well.
- Avi's Metal Dimensions (Good Welder) (718.486.5434) - Having a good welder was key as there was so much metalwork in this job. Avi was excellent and is part of the Williamsburg welder mafia. Be careful, however, stay smart with these guys and you won't be "taken to the cleaners."
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That stair is completely beautiful. It's a little strange to see it in such an old building, but the shape of it is graceful, and of course, its transparency lets the light come through very, very well. So sculptural and Calder-esque. It seems to call for a Calder mobile suspended in the middle of the open space above the main space.
His friend should market that stair, it's just amazing. The only thing that frightens me, is that there's no railing to hold onto. But I can imagine one with sorts of a gentle arc. going down beside it, or something.
Yay! I asked about this and the Bryant park apt a few open threads ago. Glad to see it worked out well in the end. Now couldn't be a better time to sell.
The only question I have is why did those stairs pass code without railings? Is it because they lead to a loft area and not a "proper" second storey?
I don't understand why folks complicate their lives like this. Headache upon headache. Sure, the project might (MIGHT!) make a few bucks for the owner, but is it worth it? My philosophy is hunt for a good deal on a rental, rent stabilized if you're lucky, and make a home for yourself, leaving the big headaches for the owner. I found a great stabilized apartment about 5 years ago and never plan to move. I invest my $ in other ways. To each his own. I couldn't finish looking at the photos. I could feel the stress vibes.
I hate to say this, and perhaps it's beside the point, but those stairs look like a pain to keep clean!
There is something to be said about ownership. I didn't understand till I owned.
As i was reading I saw 30k for a building and went to myself "wow did i get ripped off" an then saw 20k per apartment...thats about right seeing as how they each need thier own service+ panel etc
I paid about 20k for my 1st floor (and even that was with me doing quite a bit of work myself.)
Such investments can pan out but it really involves back breaking labor. After you develop a few properties and you build enough capital ...then you don't "need" to make as much profit per transaction and can handle a few buildings at a time. Same headache on multiple fronts but...at least your back doesn't ache at night. (the pay out may even increase overall)
Every one needs to start somewhere.
OK, I wasn't going to mention this because it goes against the owner's experience but seeing as Todd brought it up then what the heck.
Remember that friend of mine whose kitchen I linked to in the LA Ikea thread? Back in 2002 (when the NYC RE market was taking a temporary downturn that everyone thought was the end of the bubble) he bought a 6 storey building in Tribeca for $300 per sqft. Did a gut reno on the floors above the store on the 1st floor (which he sold to the store owners for a cheap price because he is a nice guy) which included refinishing floors, new stud walls to partition 2BRs at the back of each unit, new kitchen and 1.5 new bathrooms per unit plus spending about 20K to run a vent from bottom to top to vent the stoves in each apt. He was the GC while holding down a full time position as an ER doc. Did his own unit (the PH) in 6 weeks and the rest were finished in 6 months. (He had to finish fast to sell fast to cover construction loan payments). Cost was low due to him saving so much on the labor X time, doing a some work himself (did he take a sabbatical? I don't know) and sourcing cheap materials where he could - ref the SS backing on his kitchen island and the Ikea cabinets.
1800 sqft per floor X 5 units (call the store a wash) X $300 = 2.7MM purchase. About 75K per floor = 375K costs = about $3MM total cost.
Sold 4 units and kept PH to himself when finished tribeca lofts were giong for about $750-$800 per sqft. Call it 4X1800X700 because he sold to friends at a discount = just over $5MM top line = $2MM profit.
He then sold his PH last year, as can be seen from my link in my other post, for just over $2MM to finance his next RE project.
So one reason to go through all this headache could be money. But this was not his true motive. He wanted a place to buy, was handy and saw value in a shell. He caught the bug and wants to do it again. Money is not the motivator here but it obviously helps.
I'm not posting this to talk about the millions that can be made in RE but simply to say that, to some ppl, it is worth the headache.
Harder to find those kind of places now though.
What a great building. The space looks open and inviting and warm, even at the naked stage. While I doubt I'd ever take something like this on myself, it's all still very much a learning experience. I'm sure one acquires untold skills in handiness, mental math, patience and effective communication, to name a few.
And Todd, I hear ya, but some people out there are just freakishly capable of stuff. They're annoying. ;) A girl with whom I went to high school is now an MD, had four kids all while in med school and during residency, and the kids all apparently inherited her smarts and calm demeanor. She and her hot hubby also own two homes. I really should just put those fucking newsletters into the shredder instead of reading them...
Freakishly capable - I like that.
I guess my friend qualifies.