We thought that the “sell in the suburbs and buy in Manhattan” was THE trade. What if the real deal is even more local? How about: Sell in Brooklyn and buy in Manhattan?
Putting all this “trade talk” to the side, how about this: It’s just a good time to buy in Manhattan. And if I have to say it a million different ways, I will. Though wouldn’t you prefer me to show rather than tell?
Here’s an example of a buyer who just closed on a fabulous two-bedroom property on one of the most picturesque blocks on the Upper West Side. While the story of the buyer-does-good is nice, it’s also boring. This story is more indicative of a template you can use to find a good deal today.
Now I’ve said that it’s often very hard to know that you’re getting a good deal in the moment. But right now, you don’t have to wait. You can feel confident you’re getting a deal.
Here Are The Three Things You Want To Hear
- The seller purchased a few years ago
- The seller just finished a very expensive renovation
- The seller decided to sell rather than move in
I was touring the Upper West Side with an old friend who was looking to move back into the city. We looked at condos and cooperatives in the $2-2.5mm price range. One seller wanted $2.7mm for his apartment even though every indicator said it was worth $2.4mm (it’s still on the market). They wouldn’t respond to our very-reasonable offer. Another seller was asking $2mm for a property that was worth $1.7mm on its best way.
Finally, we found this apartment on West 69th Street that caught our attention:
The Details That Were Music To Our Ears
- The sellers bought for $1.725mm in 2019. It was a wreck.
- They put in $400,000 (They overspent)
- They decided not to move in after COVID (Mint condition)
- They tried to recoup their purchase price plus renovation costs when they came to market (as opposed to pricing to the market)
Why hadn’t it sold? It was just asking too much money. Even with the gorgeous renovation, it was only worth a little more than what they paid. Let’s add three more elements to the story that made it even more compelling, and more likely to result in a great deal for the buyer:
- The property had been on the market for 5+ months (Seller desperate)
- The listing agent was about to be fired (Listing Agent desperate, too) after her 6-month agreement expired.
- The building hadn’t allowed washer/dryers, which scared off a lot of buyers. When we showed up, we learned that the new slate of cooperative board members were going to allow them to be installed in apartments (BIG VALUE ADD)
The Deal
We worked out a purchase price for $1.87mm. What did that mean for the seller? They were going all-in for $2.125 from the purchase (not including carrying costs) after 5 years of owning the unit. After the sale, they would net $1.72mm from the sale. So they were losing all the money they spent on renovation.
20/20 Vision in 2024
Our buyer had seen 20 apartments over a few weeks. He had put in a few bids to test the waters. When this came along, he could see he was getting a lot of value for the property.
And these are the opportunities for you, too. What we’re seeing are a lot of sellers who bought during the 2014-2017 run-up in the market, or who perhaps overpaid on their purchase (or their renovation) between 2017 and COVID. And for whatever reason, they’re ready to sell.
Want a deal like this? It’s out there, though it might not be waiting for you. Be in touch if you’re ready to start hunting. -Scott & The HRT