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…

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.

Here’s one picture looking back to front in the cellar…

And we climbed up a ladder, through some rickety floor joists and into the back yard for the first time. It was pretty much what we could see from 122nd Street though we saw the bottom floor for the first time. I can’t believe some moron cut a huge hole in the brick wall to put an air conditioner in. There isn’t even a steel lintel to hold up the weight of the brick above. Needless to say that’s gotta be patched. And there’s about 1 foot of construction debris all over the back yard which will need to be removed. Unfortunately masonry debris tends to be basic and plants like acidic soil, so once that’s out and cleaned up we’ll need to bring in a lot of fresh topsoil and wood chips to get the soil back to being acidic. There was very nice light in the back yard - quite sunny…

The yard felt a little narrower than I was hoping for, but I’m still going to be very happy to have a back yard. Just need a good privacy fence… I haven’t been able to really garden in over 20 years… Should be fun!

One thing that doesn’t look so glamorous now but will be glamorous in the future is the size of the windows. Just on the ground floor (in the future basement rental unit) that window is nearly 7 feet tall. One floor up, on the parlor floor (in our future living room) those are 9 foot windows! (One will become a door). And one more level up on the master/mistress level, in what will be our master bedroom, there are 8 foot high windows. That’s the south wall, so we’re going to have a crazy amount of light… Possibly too much light.

When we were looking at it it was priced at $679K. Last month it finally sold for $425K. When we were bidding on it we went as high as $430K and they came down to $450K but then we withdrew our bid completely after spending an evening walking around the street. Even though it was just across Amsterdam Avenue from one of the best blocks in Harlem it was a remarkably rough block. The time we walked the block at night while we were bidding, it was summer, the windows were open and the salsa and merengue music was blaring from the windows. We realized that while the house itself had potential, the block didn’t have that much potential. It was never going to be a “good” block - at least not in the next 15 or 20 years. That would always limit the price of this townhouse, so we stopped budding on it. A few months later we second guessed our decision not to proceed on it so we walked the block again. This time as Dan was walking down one side of the street and I was walking down the other side, two “low income” women were yelling at each other and just about got into a fist fight as Dan passed them. He didn’t feel safe and that was absolutely the end of our thinking about 505 W 144.

On the plus side, the apartment building on the other side of the street and down a bit is where George Gershwin lived for a number of years, and there are 3 or 4 large apartment buildings on the block that have been designated part of an economic development zone and are getting 10-20 years of no real estate taxes in exchange for being redeveloped. One rooming house on the block has been gutted and turned into a condo and one building has been turned over to it’s tenants and is now a co-op. So the block is improving, but it’s still far from what we were looking for.

Here are the details…

Sale Price: $425,000
Sale Date: 5 February 2010
Square Feet: 3,468
Price Per Sq Ft: $122
Dimensions: 16.5 x 52 (no extensions)
DOB Classification: 2 family
HPD Classification: 1 class A apartment + 9 class B rooms
SRO Restricted: YES with certificate of no harassment
DOF Market Value: $1.13M
Annual taxes (2010): $3,039

It’s interesting that we paid the identical price per square foot for our place that the buyer paid for 505 W 144th - $122/sq. ft. but we feel like we made the right choice buying our place over this one.

The question then is if someone purchased this building what’s the best usage? Given the block I’d say it should be a 3 family rental with unremarkable finishes. You’d want three family instead of 4 to keep the taxes low. The ground floor would be a floor through 1 bedroom garden apartment. The parlor floor would be a large studio apartment. On the parlor floor the staircase is a switchback in the center of the building. That limits the layout options, hence a studio apartment on that floor. However, there are some interesting original details that could be preserved. Then the top two floors would be a nice, large 2(+) bedroom unit. There are original details on the master/mistress level, but not much of any on the top floor.

Given the block, I don’t see an owner living in this townhouse. IMHO, it’s value is purely as a rather average rental property.

Rough numbers… I’d conservatively say $1500 for the garden rental, $1,000 for the parlor studio and $2,000 for the top two floors. So $4,500/mo in income or $54K/yr. Assuming $1K/mo goes to running the building ($taxes, utilities, etc.), you could support a mortgage of about $600K off the rental income. At 80% financing that means the max value after renovations is about $750K and they have about $325K for renovations.

Renovations are a bit challenging because the house absolutely reeks of piss and shit. A “caretaker” had lived there for a number of years and during that time he didn’t walk his dog very much and the dog just did it’s business in the house. That means all the wood floors have to be torn out, the floor in the basement chopped up, removed and repoured, and Urine Off used liberally throughout the house. There’s also a fair amount of mold on the top floor - so all the “new” sheetrock walls on that floor need to be torn out and replaced. The plaster walls on the other levels are mold-proof, so they’d be OK. The building also needs all new electrical, plumbing as well as completely new kitchens and baths. It’s pushing it to get all of that done for $325K and bring it all up to code to get the new C of O, which means it’s not going to be very high quality.

There are some interesting original details. The triple mirror just inside the front door was incredible. It could be a great place, but I doubt it ever will be…

The one funny story from seeing this house was when the seller’s broker (Jean Adams of Prudential Douglas Elliman) was going down the dark, filthy staircase between the parlor and basement levels. She was a woman who carried herself with a fair amount of dignity but she was wearing flats walking down a staircase that was covered in rat droppings and god knows what else. She very calmly said “Wait a moment, I’ve got something in my shoe”. She didn’t have socks or stockings on, so that meant she had gotten what was probably rat feces in her shoe against her bare skin. Given what she had to endure to show that house, I had huge respect for her. Of course, she could have dressed differently… I for one always wore boots with steel soles and toes when I went through houses like that…

Pay 1/3rd of what you would have paid 2-3 years ago

Harlem townhouses that are wrecks and need major gut renovations have fallen about 65-70% in value since the peak in 2007. Even the ones in better condition have fallen substantially. Other real estate in Manhattan has fallen maybe 20%. I once had a friend tell me life is a lot like surfing - you need to watch waves and be prepared to get onto your next big wave and you need to do it before the wave gets too big. That analogy felt really apt as we sold our apartment at 15% off it’s peak value to purchase something that had fallen at least 65% from it’s peak value. It really felt like getting off one wave onto another that’s potentially much bigger.

Be prepared for volatility

But using the wave analogy a bit more… the Harlem townhouse market is still a market with drastic extremes. The fact that you can lose 2/3rds of the value in your home in 2 years will scare some people. There are a number of reasons for the volatility. The bottom line is that Harlem’s gentrification in the past 10+ years didn’t “stick”. Not enough got gone before the crash. The schools aren’t that great, the grocery stores are generally pretty bad, and there are still a fair number of empty lots and derelict buildings.

That’s why investing in Harlem today needs to be part of a long-term strategy. If you’re hoping to sell in a year or two - don’t do it. Harlem real estate could very well continue to go down in the next few years. Instead, look 10 or 15 years out at the next wave of investment/development and ask yourself which NY neighborhoods have the most upside potential. In Manhattan, Harlem is probably top of the list.

Signs of change - even now

If you’re not all that familiar with Harlem and it’s been years since you’ve been to Harlem try taking the ABCD trains to 125th Street and walking south on Frederick Douglass Boulevard (8th Avenue - the continuation of Central Park West). Years ago the place was pretty blighted, now the developers are calling it “SoHa” (South Harlem). Where once there was blight, now there are tons of brand spanking new buildings. Look closely at the buildings and you’ll see they’re quality building with decent design and above average construction. They’re a lot more like the new buildings you’d find on the Upper West Side than they are the drab new buildings you see in Washington Heights. At 124th you’ll see the new luxury Aloft Hotel being constructed. Around 120th go into Moca Lounge in the evening and see all the hip buppies. Around 119th go into Best Yet Market and see a grocery store that rivals downtown stores like Whole Foods and Gourmet Garage (it just opened a month ago and only had it’s official grand opening yesterday). There are great places to eat  all along that stretch - like Melba’s at 114th Street.  Yes, prices are down, but those new condos are still selling - even in this market. I genuinely think that type of development will spread to other parts of Harlem in the next upswing. If you’re patient enough to wait you can reap the benefits by buying now - at or near the bottom of the market (knock wood).

Pockets of long-time quality

There are certain parts of Harlem that have always had great townhouses and those neighborhoods are offering quality at a great price. Hamilton Heights / Sugar Hill (near the ABCD train at 145th) is one solid area. Strivers’ Row (138/139 between ACP and FDB) is another classic area that’s always been good. Mount Morris Historic District just south of 125 between 5th Avenue and ACP (6th Ave) is another solid neighborhood. And the blocks over by Morningside Park near Manhattan Avenue are great as well. Buying in an area with a reputation for stability is a pretty safe bet (long term). However, you really need to study Harlem to understand which blocks are solid and which aren’t since in some cases crossing an avenue can take you from one of the best blocks in Harlem to one of the worst.

Is the market going up or down?

Personally I think it’s leveled off. I don’t feel like it’s gone up or down much since about the middle of last year. Last July there were two sales in Sugar Hill that I saw as benchmark sales - 419 West 146th Street for $495K and 400 West 145th Street for $550K. When you looked at actual square footage both were at about $147/sq. ft. Both are in the historic district - with the one on 146 having the negative of a 12.5′ width, and the one on 145 having the negative of being on a busy street.

[The Department of Buildings has used two different ways to measure square footage over the years. As a result basement / garden levels are sometimes included and sometimes not. You need to determine the real square footage to determine the real cost per square foot.]

Doing the a 1/2 mile radius around those sales for the past 3 months we see prices haven’t changed all that much. The least expensive was 505 W 144 which sold for $122/sq ft. That’s one we bid on at one point and it’s outside the historic district on a “less than desirable” block. 400 W 145 sold for a 2nd time later in the year - this time for $650K - $100K more than it sold at auction for in July. 48 Hamilton PLACE sold for $450K ($143/sq. ft.) but it doesn’t have great location and I think it’s a fully occupied SRO. So, if anything I’d say prices have gone up slightly.

The higher end of the market is seeing similar stability. For almost a year now $300/sq. ft. will get you a habitable townhouse on a prime block needing significant renovation. In  the $400s/sq. ft. you’ll get a very nice fully renovated townhouse. And the exceptional townhouses will go for around the $500/sq. ft. mark.

Starting with a shell/wreck in a “decent” location (like ours), add about $20/sq. ft. for a prime block in a historic district or even a bit more the area in SoHa around Morningside Park & Manhattan Avenue. Or subtract about $20/sq. ft. for the worst locations. So the range for shells is just over $100/sq. ft. to about $150/sq. ft. on a prime block. It’s been that way for at least the better part of a year.

[If the townhouse is close to the FDB corridor and has the new R8 zoning with a commercial overlay, then it's worth significantly more given the development potential. 243 West 120 is a building that falls in that category.]

That said, in our experience very few owners price their townhouses anywhere close to where they’ll sell. Chances are you’ll get around $200K off the asking price. We got $270K off what the asking was at the time we started bidding (they lowered it $100K while we were bidding to attract other offers). Any owner who scoffs at an offer $250-300K below their asking probably won’t be selling their place any time soon.

How much do the renovations cost?

When looking at places don’t underestimate how much work has to be done. Even places that look half way decent can require $200-250K in renovations. In addition to the little stuff, most of the townhouses have original(ish) plumbing and electrical ($150K or so to replace). Most of them will have rotted floor joists near the bathrooms. Most of them will need all new kitchens and bathrooms ($200K to replace). Then there are things like repointing brick, replacing old, inefficient boilers, etc.

For an “average” wreck you’re probably looking at $500K in renovations. Our place is a complete shell with nothing left inside. We’ve budgeted $700K ($550K for construction + 10% overage contingency + $50K for architectural + $50K to cover the mortgage during construction) and that’s a very tight budget - $800K would be better, but we just can’t go that high. And god forbid you have problems with your contractor - then things can get VERY expensive.

Make sure the numbers work in the short term

Even though you may be buying as a long-term investment, be conservative and make sure the numbers work in the short term. Over-estimate on your renovation budget and timeline and under estimate your rental income. Get to know the rental market, figure out what your rental unit(s) will rent for, and then only assume that you’ll receive 70-75% of that since the market may go down or you’ll have vacancy between tenants.

If you’re in the market for a shell make sure that if push came to shove you can sell it when you get done if you have to without losing too much money. So if you buy at $125/sq. ft. and put $200 sq. ft. into it then you need to be able to sell it for $325/sq. ft. It’s really easy for a architect and contractor to give you a price of $800K to renovate your place, but you may find that the market only warrants spending $500-600K. Do all the numbers before you buy - some places just don’t make sense to buy. But if you really like the place put in a lower bid based on those numbers. Never be afraid of a low ball bid that makes sense when you crunch the numbers.

Pay attention to the certificate of no harassment

In the 1980s landlords started evicting tenants who were in rooms in townhouses so they could flip the building or have  units that were more profitable. Those rooming houses are called “SROs” in NY which stands for Single Room Occupancy. Since around 1985 it is illegal to convert an SRO unless everyone who’s lived there for the past three years signs a document saying that they were not harassed to leave. This protects NY’s poor who often can’t afford the rent of a full apartment. It’s not uncommon for landlords to pay $10,000-$15,000 to get someone to sign.

If you purchase a building that is considered an SRO - even an empty one or one that doesn’t seem to be an SRO, you may need to wait 3 years before you can apply for a certificate of no harassment. Then you’ll need to wait about 9 months to actually get the certificate, and then you’ll have a year of renovation. If you absolutely love the place and don’t mind waiting 5 years to live there, go right ahead, but otherwise always insist on seeing the certificate of harassment before you even start bidding on the property.

It’s amazing the things brokers will say when they don’t have a certificate of non-harassment. Sotheby’s claimed an SRO on Strivers’ Row was a 2 family. I’ve also heard “it will be delivered vacant” as a response (as if that changes anything), or “we’re in the process of getting it”. As much as you like the place, if they don’t have the certificate - move on…

Loans are available

Financing is a critical component of buying a townhouse and Wells Fargo seems to be the bank most eager to issue rehab mortgages on Harlem shells (they’re possibly the only bank doing those loans). Your interest rate will be a bit higher, you’ll have some extra expenses to cover their management of your construction, and there will be a lot of hoops to jump through - but it is possible to get a loan. We recommend speaking with Michael Stein (Michael.B.Stein@wellsfargo.com) if you’re in the market for a townhouse.

Just imagine - lots of space in Manhattan…

When it’s all said and done, if you can get the numbers to work for you, you’ll have a wonderful home with tons of space in Manhattan. Space is a pretty rare thing to have in NY. So all of the hassle really is worth it…

And on top of it all, in 30 years when you’ve paid off your mortgage you’ll still have rental income that will more than cover your housing costs. So you’ll live rent-free in Manhattan. Not a bad deal - but at this point it’s all about the long-term investment.

I genuinely believe that in 5 or 10 years Harlem will start going up again very quickly and dramatically and next time the gentrification will stick. If you’re well positioned on the wave you’ll have a great place to live, at an affordable price, with solid rental income, and tons of equity in your home. All in all, a very good deal…

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)…

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.

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.

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.

Name: Jay
December 8 1967
2:00 AM Time Zone is EST
Washington, DC

 
Rising Sign is in 11 Degrees Libra
Very attractive and popular, your charm helps you to get your own way and prevents others from getting angry with you. “Peace and harmony at all costs” is your battle cry. You always try to ameliorate or to cosmetically hide any physical ugliness or any angry feelings between people. Flashy, but not gaudy, you prefer to dress elegantly. You generally have good taste in music, art and literature. Beware of the tendency to compromise yourself in your attempt to be agreeable at all times. A bit of a social butterfly, at times you can be vain and lazy. For the most part, however, you are gracious and affectionate, and your refined and aristocratic demeanor serves as a role model to others.

 
Sun is in 15 Degrees Sagittarius.
Very fun-loving, spirited and energetic, you have a huge reservoir of physical energy within you that needs to be released. As such, exercise or sports are very important to you. Quite gregarious, you enjoy being with other people, but you tend to avoid emotionally restrictive or intimate relationships. Constantly curious about the broader issues of life, you may at times be quite careless and sloppy about details — you tend to leap to conclusions before all the facts are in. An avid reader, you are totally enthusiastic about any given subject should it interest you. You are known for being idealistic, generous, sociable, cheerful and very positive!

 
Moon is in 10 Degrees Pisces.
You have strong feelings and are extremely sensitive. It would help if you had a thicker skin — you tend to react emotionally to every situation you come across. Kind, gentle and considerate of the feelings of others, you are good at taking care of the sick, wounded and helpless. But you tend to absorb the energy of others — so avoid those who are always negative. You have a rich, creative and lively imagination, but you should be careful not to spend all your time daydreaming. Very intuitive, you have good ESP and may be quite clairvoyant or psychic. Remember that you too have the right to get what you want from life. If you are always defensive and kowtowing to others, people will take advantage of you and exploit you.

 
Mercury is in 04 Degrees Sagittarius.
Your mind is very curious and inquisitive, always seeking information on a wide variety of topics. The broader the subject matter (philosophy, science, religion, metaphysics), the more it will appeal to you. You prefer to deal with abstractions — the small but important details associated with any subject tend to slip your grasp. You are known for being blunt, honest and truthful.

 
Venus is in 01 Degrees Scorpio.
Your feelings about others are deep, powerful, intense and complex. When you like someone, you do so totally and obsessively if you do not like someone, they do not exist. Your faithfulness and loyalty to your lover is unquestioned, indeed at times it is too much so — you get so possessive that you almost smother your partner. At times, your feelings are kept deep within you and, because they are so complex and intense, they frighten you — this is the way that you try to ignore them. But the more you try to do this, the more explosive things get when you eventually do express them.

 
Mars is in 04 Degrees Aquarius.
Your ideas and opinions are usually inventive and original, but sometimes they are merely eccentric and offbeat. You are altruistic — you will work hard for the attainment of group goals, as long as they meet your high standards. You tend to resent traditional authority figures because you think that your ideas are better thought out and more valuable than theirs. Very idealistic, you are a rebel WITH a cause!

 
Jupiter is in 05 Degrees Virgo.
You feel most expansive and at ease with yourself when you are doing something that you consider to be practical or useful. You enjoy being dutiful and carrying out responsibilities. You gladly take on the little tasks that others seem to want to avoid. At times, you carry things to extremes and feel guilty anytime you do something that you consider to be self-indulgent. While it is appropriate for you to demand little for yourself in life, try to loosen up once in a while — go out on a fling and enjoy yourself!

 
Saturn is in 05 Degrees Aries.
You are aloof, independent and standoffish. This is mainly due to your fear that others might inhibit or restrict you and, quite frankly, you feel that you can govern your life by your own standards. Be careful not to associate with those who are overly critical of you or you will withdraw so deeply into your shell that you will become very lonely. You have the ability to stand on your own two feet and to make up your own mind — albeit very carefully and cautiously. But you are known for your circumspection and therefore are respected and admired.

 
Uranus is in 28 Degrees Virgo.
You, and all your peers, will be known for the degree of intensity with which you dislike normal everyday routines and chores. You will go out of your way to invent innovative, unique and timesaving ways to perform the various mundane routines and duties of living. You will be attracted to all manner of practical and useful gadgets — anything that will make your daily life more exciting.

 
Neptune is in 24 Degrees Scorpio.
You, and your entire generation, are extremely interested in anything deep and mysterious. You will explore and idealize the benefits that can accrue from the study of the occult, healing and psychology. You are willing to experiment with substances like drugs in order to push your understanding of your inner being to the extreme.

 
Pluto is in 22 Degrees Virgo.
For your entire generation, this will be a time when profound changes in society’s attitude toward work, duty and responsibility will be initiated. Radical changes in attitudes toward personal health and general nutrition will be promulgated and gain wide acceptance and practice.

 
N. Node is in 26 Degrees Aries.
You’re at your most comfortable when involved in group activities outside of your immediate family circle. You delight in getting involved with others in neighborhood civic or political activities, especially if you can be a part of the leadership of the group. Your zeal and overabundant energy bring out your real creativity when you can work toward tangible results — things that will immediately benefit those around you. You have a real gift for getting the most out of charity drives and community benefits. Take time out between projects though, because you tire out easily and your effectiveness becomes greatly diminished when your energy is depleted. Also, don’t even think of trying to get involved at a peripheral level — you need a total commitment to feel personally fulfilled. Let others bake the cookies and set up the chairs — you should be the one to tell everyone what to do and when to do it!

They got a few things right, but they got way more wrong than they got right. Needless to say, I won’t be paying $25 for the more detailed report!

Children have wonderfully creative minds and I can just see me envisioning a stair case / slide combo like that as a kid and thinking it would be great fun. One vivid memory from when I was young was wanting a place that was a big empty loft that was so big I could roller skate around in it.

Times change, needs change, and practicalities rear their ugly heads. But part of me thinks that a combo spiral staircase and slide would make a great fire escape on the back of a townhouse :)  But then I worry about what it would cost and the budget…

[The chevron pattern you see in the wood floor in that picture is another detail we've been thinking about incorporating. So there's more in that photo than you might think.]

So what do you think? Weird or Wonderful?

To me the question is which one would I most want to live in? I think my favorite would be the Urban Cactus high rise apartments in Amsterdam (see pic to the left). It’s wonderful - huge terraces, great foliage… Who wouldn’t want to live there?

Too much of architecture is just dull and boring. I’m fine with preserving the character of some neighborhoods by doing “predictable” buildings, but too often those buildings aren’t all that well done and they just fail to make the neighborhood a better place. The apartment buildings on the 20 weirdest list are pretty much all ones that capture the imagination and give back to the community. That should be applauded, not laughed at…

If you know anything about townhouses in New York that statement looks very suspicious… A two-family “currently configured as a rooming house”? Rooming houses are never “zoned” two family. And zoning has nothing to do with the number of families anyway - zoning has to do with the height, bulk and general use of the building.

So what exactly is 259 West 139th?

Let’s start with what the NYC Department of Buildings says… The DOB’s property profile for the building says it is “SRO Restricted”. If you follow the link on that page to see the certificate of occupancy for the building you see there is a C of O for the garage that was issued in January 1950, but no C of O for the main building (which is typical of older townhouses). There is one other C of O linked to that property, but it’s an error - a temporary C of O for a completely different building.

Next, let’s look at what the Department of Housing, Preservation and Development (HPD) says…

The key thing to notice there is 0 “A Units”, 14 “B Units”. “A Units” are normal apartments, “B Units” are rooming house rooms. So 259 West 139th Street has no legal apartments and instead has 14 rooming house units. That means Sothebys is suggesting a illegal use of the space - you can’t rent an apartment that isn’t registered in some way with the City and DOB and HPD are the two ways to make an apartment legal.

So both DOB and HPD say the place is an SRO, ergo it’s an SRO.

When you head over to the Department of Finance you see a different story. There you see it’s building class C3 which stands for a 5-6 family home.

Now, it’s typical for Department of Finance to get it wrong and in this particular situation it doesn’t make much of a difference since 5-6 family homes and SROs pay the same amount in taxes. But the point is if it were a 2 family home the owner would have it classified correctly with DOF since 4+ family homes pay 7 times the property tax as 1-3 family homes. That’s not an error you’d let slide for very long.

I am SO tired of real estate agents giving false and inaccurate information on their listings. It’s really not that hard to find out the truth. But it’s common for real estate agents to answer the question “Is there a certificate of no harassment in place?” with “the building can be delivered vacant”.

If you’re outside New York you’ll be excused for not knowing the absurdity of that answer but in the 1980s New York City went through a real estate boom and low income people were being evicted from their apartments and becoming homeless. Rooming houses are where the poorest people in New York live. If you lose your place at a rooming house there just aren’t any cheaper options and you wind up homeless. So in 1985 a moratorium was placed on conversions of rooming houses (SROs). A year or two later that was reworked so landlords who wanted to do an SRO conversion were required to get a “certificate of no harassment” where the City verified that the landlord didn’t force out or intimidate any tenants in the prior 3 years. You could also be turned down if there was an open violation for an illegal conversion.

Certificates of no harassment are vital for anyone buying an SRO and wanting to use it for something other than an SRO. It really doesn’t matter if it’s vacant and any licensed broker selling a townhouse should know that. And lying and saying it has a C of O that it clearly doesn’t have is completely inexcusable.

Thank god Property Shark and the City of New York put all the info online and make it easy to tell brokers they’re lying. It’s amazing how quickly their story changes when you say you’ve looked up the property up on Property Shark. Still, it’s a huge hassle that is completely avoidable. I feel sorry for the poor buyers who don’t understand how to find the information and learn the truth. If you don’t do your due diligence and you have a crappy lawyer who doesn’t do it either, it can devastate you financially.

Take a listen…

The longer we search the more we see see what really makes places valuable…

• Being in a large, established, historic district like Hamilton Heights / Sugar Hill
• Having a certificate of no harassment, or not needing one at all.

If you click on the blue dots you get a quick synopsis of what we thought about each place.

View Townhouses We’ve Seen in a larger map

So these three guys show up. Manhattan Mini Storage had hired Moving Ahead for the job and it was obvious that Moving Ahead had sent their absolute worst team to do the move. It’s probably an instance of Manhattan Mini Storage buying the excess time of various moving companies and then the moving companies filling the order with the moving teams that are at the bottom of their list to send out on “real” jobs.

So these three guys show up. The leader was talking about how he’d been up until like 2am the night before. The fat guy on the team managed to rotate every box he picked up 90 degrees and then he’d drop it on the moving dolly. He was too lazy to do the bending required to set it down properly. They took out a bunch of boxes and Dan went outside to watch over them. I’m not exactly sure what he saw, but he had a bad enough reaction watching them that he called me. I was sitting in a chair exhausted praying we wouldn’t completely regret the move. As soon as he started with his misgivings I interrupted them and said I didn’t want them touching our stuff either and to stop them. Well, Dan is a feisty little thing when he gets mad and apparently he totally went off on them and everything ground to a halt.

I was already on my way down and then we had to get everything off the street and into the courtyard of our building to get the moving dollies back to the idiots doing the move. It was a huge amount of work on a morning that started with me waking up completely exhausted - so sorta a complete nightmare.

The team leader tried to justify their actions by saying he didn’t have any problems when he moved an art collection that one time. I told him Dan had run an art trucking company at one point and understood how to do moves properly. Then he went on about how he’s done moves for millionaires and not had a problem. There were a number of problems with that statement so I didn’t bother responding. But honestly, he should treat everyone like a millionaire and who was he to assume we weren’t millionaires? Plus, the one other time I heard a line like that was when a contractor was trying to justify putting greenboard in a shower by saying he’d done it in “million dollar homes”. People just don’t have a clue sometimes.

Needless to say I wanted nothing to do with Manhattan Mini Storage or Moving Ahead ever again. In fact, if it weren’t going to cost an arm and a leg I sorta wished we could get the stuff we have in storage with Manhattan Mini Storage out and to a different facility. In the end we’re going with Manor Moving who are recommended by our real estate agents and a neighbor. They’re going to pull everything from our place and Manhattan Mini Storage and put it in their warehouse. Their sales tactics are a little heavy handed for my tastes, but given their recommendations, I trust them a lot more than Manhattan Mini Storage.

And honestly, I should have known better about Manhattan Mini Storage was well. Last fall one of their owners was instrumental in having Animal Haven shut down two of their three locations which completely changed Animal Haven’s mission from animal rescue to a SoHo boutique pet store with a few “adoptable” animals available. The Manhattan Mini Storage person was on the board and one of the strongest advocates of the change (half the board resigned in protest over the change). That decision resulted in the killing of something like 50 or 60 cats and dogs many of whom were unadoptable and who Animal Haven donors had gladly supported for many years. In fact, the upstate sanctuary for unadoptable animals brought in more money than it cost to run - so there was no good reason to close it and sell when real estate prices were low.

On a more positive note, I’ll say Shleppers did our main move to our new apartment and they were wonderful. I’d highly recommend them.

I just want all this moving and selling stuff to be over. But it’s only the beginning… Hopefully soon we’ll find a townhouse in Harlem and then we’ve got a major renovation to do. Needless to say, a good contractor will be absolutely critical. And next move I’m hiring someone to do packing and starting the packing early. Unfortunately our personal assistant quit a month ago or so and we’ve been on our own through this whole ordeal.

UPDATE:

First, we had a very good move with Manor Moving. Given that we were in a rush they didn’t really understand how much they were moving and putting in storage they under bid the job. They could have messed with us once things were on the truck, but they were completely fair.

Second, Dan finally got to talk to Manhattan Mini Storage and they were really good about the situation. By that time we’d already moved everything out but they offered 8 months free on our current storage unit which was extremely generous and will actually come in handy since we’re short on closet space in our interim rental. So while I still have issues with their involvement in Animal Haven, they did handle the situation as well as they could. The fault then really lies with the movers - Moving Ahead - not so much with Manhattan Mini Storage.

It’s really quite simple… That car has 4 doors. The “legend” of the GTI is that it’s supposed to be an inexpensive sports car and sports cars just don’t have 4 doors - they have 2 doors and a good engine.

That’s not “the return of a Legend” - it’s the return of a huge mistake they’ve made before - watering down the GTI and making it a Golf/Rabbit with a few extra features. The GTI needs to be distinct from the Golf or else it’s not a GTI.

the prospect of buying in harlem was a much more harrowing process…many of the places were being sold by sketchy brokers, had sketchy situations, or were in sketchy neighborhoods….harlem is still very much house by house, block by block…even the much coveted mount morris park area still has many burned out buildings [...] many more of the places there have sro issues, or are in general worse shape.

“Harrowing” might be a little melodramatic, but honestly there are times when it feels like that. We’ve been looking for a place now for over 9 months (in earnest for 3+ months) and there are times when it’s just exhausting and depressing. Just when you think you’ve found a place you notice drug activity at the abandoned house next door, or it turns out to be an SRO without a certificate of no harassment, or the taxes are crazy high, or it’s close to projects, or you walk the block at night and seriously worry about your safety, or they’re asking 3 times what the place is worth, or it’s a short sale and they want all cash. We’ve literally seen all of those things and the list goes on and on…

All I want is a nice shell or wreck at a reasonable price, on a decent block, that’s not too far from express trains. That’s not as easy as it sounds. We’ve expanded our search area and are willing to deal with up to 10 minute walks to an express train. I don’t even mind a place where it rains indoors or there are soft floors or there’s a staircase that feels like it’s about to give way… I can deal with those things. But everything seems to have major complications. It really does feel like I’m beating upwind…

No wonder so few places are selling…