Multi-Unit Buildings Aren’t Dead: 914 N. Winchester Closes in the East Village
Many of you thought the original listing price for this 3-flat greystone at 914 N. Winchester in the East Village was way too high in December 2009 when we first chattered about the property.
See our prior chatter and pictures here.
Originally listed at $679,000, one of you commented that it should be priced at $388,000 in order for the building to “work” with the current rental prices and other expenses.
The building just closed for $625,000.
Ivona Kutermankiewicz at Koenig & Strey had the listing.
914 N. Winchester: 7 bedrooms, 3 baths, 2 car garage
- I couldn’t find an original sales price- but sometime in 1987
- Was listed in December 2009 for $679,900
- Sold in April 2010 for $625,000
- Rental income of $42,000
- Electric: $3600
- Insurance: $2800
- Maintenance: $2000
- Water: $600
- Taxes of $9099
- Full basement
That’s just great. A 3.8% return on capital. Heck, there are fixed income investments that are highly liquid paying 8% and higher with no headaches but then you don’t get to tell people you are a landlord.
I wonder if the buyer will be converting it to a single family. That might make more sense.
Gary: I was thinking the same thing. Or maybe even converting it into condos which you could sell for $400k each.
I was highly entertained to read the comments that were made back in Dec when this beauty first came on the market. WTF were you all smoking when you were insisting the price be discounted by $300k for it to be a good buy?!?!?!?!?!?!
The previous thread is a classic example of how many posters here who were NOT looking to buy, put aside the shelter aspect of RE investing looking ONLY for an opportunity to make a profit (while also suggesting it be made a SFH?) and gladly took the opportunity to bash the hell out of a pretty rare and beautifully maintained building (sure it needed minor updates to bring it into 2010 standards, but still was a great building) are SO out of touch with RE reality….even when we are in the questionable early stages of recovery. While it is fun to play Land Baron/Mini Trump, I hope this is seen as an opportunity to adjust how you all perceive what constitues a good deal in the Chicago RE market.
I am not calling anyone out or being overly negative about people whose opinions I respect, but it was just so ridiculous how the conversations were going on about how good AND bad the place was. Funny.
One of the last projects that we took on here in NY was very similar building….a meticulously maintained four unit in the W Village area that we converted back to it’s original splendor. It made a perfectly proportioned SFH using the suggestions that were made on this thread.
Basement level was made into a huge family/rec room with a nice laundry, mud and mech room. First floor was an open plan design (retained all wood work and trim throughout) that included a formal foyer, living, dining rooms and a spectacular kitchen with attached breakfast area. Second floor became two large bdrms with en suite bathrooms with a good sized office seperating them. And best of all, the third floor was turned into a HUGE floor through master suite with his and hers baths and a large sitting area which featured a 72″ flat screen and entertainment wall that housed components for the entire home’s audio/video requirements. The end result was one of the best examples of a modernized 1800’s mansion in the area. Hopefully the new owners of this building will follow suit and do the same with this gem. BTW, the front stairs are concrete and not the original limestone.
Before it was converted the 4 units netted the owner (Wall St exec) nearly $30k a month in rent. After we finished the project (a 9 mo, $2 mil job) it turned out so spectacular the the couple left their 68th floor Time Warner condo and moved in immediately…actually they took possession two months before it was finished as they were very involved in the process and wanted to be present to give their constant input.
From what I gather, it will be featured in one of NYCs design mags as a cover story…which if done correctly (with due credit paid to my team) just might force me out of retirement. I always knew my best work would be my last project and glad to see this came to be true.
Anyway sorry I got off topic (don’t you all miss my mostly incoherent rambling?) but seeing the previous discussion on the original thread I just could not help but comment on how ridiculous that discussion was.
Still can’t believe it…posters wanting and predicting a 50% discount on such a gem of a building!!
Funny/Sad….
“Or maybe even converting it into condos which you could sell for $400k each.”
This would be the absolute worse things they could do! PLEASE return it to it’s original state!!
Sab…..add an edit button!!
Dang, WL. . . I’ll give you credit for being passionate about RE.
While not a deal, I do not think this was a crazy price either.
No, this is not a get-rich investment, but if you’re looking to owner-occupy for a few years and then convert, the building and the neighborhood look well positioned for it.
“Dang, WL. . . I’ll give you credit for being passionate about RE.”
LOL, Thanks…I think!
I have been doing this for…well…I think I was born with a hammer in my hand! I really do love the entire industry and it has allowed me to live a very nice life, rebuilding and living in most every type and style of architecture known to man.
It’s been a great ride and as much as I love my semi retirement status now, I think I probably will be returning to it full time in the near future…my life just doesn’t seem right to not have multiple projects going on constantly.
WL – thank you for balancing out the extreme and ridiculous, doom and gloom, renter-for-life crib chatter viewpoints. Thank you for the rant. There’s a difference between people saying they are “in real estate” because they read blogs, talk about it with dads at the park or sell 5 houses a year in the burbs and people like yourself (seemingly) that get their hands dirty and put their own capital at risk. officially, you’re not in RE if you aren’t exposed to risk… you just aren’t. And to the person who wants to put his capital in foreign Greek bonds that yield >8%, have fun kid.
“Heck, there are fixed income investments that are highly liquid paying 8% and higher with no headaches”
Can you please say what these are? Seriously–I didn’t even hear about something like that in the boomtimes.
“Heck, there are fixed income investments that are highly liquid paying 8% and higher with no headaches…”
Uhhh, care to point me in that direction???
Ha, thinking the same thing at the same time, Kenworthey.
Yeah please show me some nice quality 8% stuff that isn’t priced at 140
Of course these 8% yields are not without risk but the Citigroup Trust Preferred shares that recently came out were priced at a bit higher than an 8% yield. I got some of those. B of A has some preferred that are trading at 7.3 – 7.5%. Then there are closed end fixed income funds – e.g. HMH sells at almost a 10% discount to NAV and yields 9.7%.
There’s one thing that closed end funds are good at doing, and that is, decreasing in value.
I wouldn’t exactly call Citi preferreds “investment grade” or “without headaches” as you say, I mean it probably has less of a headache than being a landlord of a 3 flat but would you reccommend those citi preferreds to your granny?
I’d hope not!
westlooplo: What attracts people to these buildings are the facades! The other three sides are usually standard old-boring Chicago brick.
My question is, how difficult is it to recreate these old cool-looking facades? Any why don’t more builders create them on new construction?
Can you put such a facade on a rehab deal, say buy an all-brick building and put such a stone facade on somehow?
“Can you put such a facade on a rehab deal, say buy an all-brick building and put such a stone facade on somehow?”
I’ve seen a few places re-facaded, but usually with smooth limestone. It’s not “hard”, but is fairly expensive, b/c of the stone cost.
Sonies,
I’ve made a lot of money in closed end funds over the years. If you get them at historically high discounts they can be quite profitable. These things sold at 30 – 35% discounts during the crash and have since recovered to about 10%.
westlooplo wrote: “[in NYC] Before it was converted the 4 units netted the owner nearly $30k a MONTH in rent.”
So, the subject Chicago building on Winchester only grosses $42,000 per YEAR, and (let’s say) nets the owner nearly $30k a YEAR in rent.
That would make the NYC building worth 12x the price of this one, or $7,500,000 before your renovation, which was another $2 million. So is the NY property worth $10 million?
“That would make the NYC building worth 12x the price of this one, or $7,500,000 before your renovation, which was another $2 million. So is the NY property worth $10 million?”
The cashflow is worth what the cashflow is worth–in both cases, less than the potential of the property, unmoored from the cashflow, is worth. The cashflow from this prop is worth about $400k; the cashflow from the NYC prop would be worth about $4mm (you didn’t net the NYC rent). Plus $2mm in reno, and the premium for the land, $10mm doesn’t sound absurd.
For comparison, see here: http://ny.curbed.com/archives/2010/03/18/34_million_west_village_mansion_looks_like_this_now.php for a $34 million SFH *TEARDOWN* in the west village.
I remember seeing these facade rennovations done to houses on Belden and Webster in LP back in ’99-’01. I recall a sign saying “Rennissance Rennovation” or something of the sort.
Dan:
“That would make the NYC building worth 12x the price of this one, or $7,500,000 before your renovation, which was another $2 million. So is the NY property worth $10 million?”
Actually your guesstimate is far below the actual $$$ value amount based on today’s RE ‘standards’…whatever that means as it changes daily! I would venture to say if they were to put this on the market in it’s renovated, modernized state they could easily and without hesitation, put a $15-18 mil+ price tag on it. Whether they would actually get that amount would be questionable, but there are still MANY people who are investing in such high value properties….so I would say they have a better than 50% chance of actually selling it.
Buildings such as the one I am speaking of are very rare to find especially in prime neighborhoods where it is located. While there are many high end props on the market, most are new construction buildings, many of which are flips belonging to Wall Street execs who are now hurting for liquidity in their assets.
G,
I think we can do without the piss and vinegar remarks when responding to comments. This type of remark adds nothing to the discussion at hand. I was merely stating my observations about the ridiculous assumptions regarding the price point of that house….and you have to agree somewhat with my take on that conversation.
I do have to address your last comment though as it could not be further from the truth.
“officially, you’re not in RE if you aren’t exposed to risk… you just aren’t.”
What do you think I have been doing my entire career, treating this as a part time hobby and only in it for fun? With every purchase I made and every home we renovated there was TREMENDOUS risk, especially with regards to the more costly projects. A couple of wrong moves and I would have lost what I have worked two and a half decades to accumulate.
As it stands now, I have risked and lost a good amount of my assets because of the disaster and probably will continue to lose more. That is why I am no longer involved as heavily as I was before the crash. I learned a HUGE lesson thanks to my Chicago adventure, which forced me to reevaluate my participation in the Industry.
Personally, if I were the owner of the NYC mansion, I would not have gone through such a costly renovation. However since I was dealing with a mini tycoon’s money and not taking a personal risk, the pleasure I received upon turning the keys over to the owners was enormous! I personally, and we as a team, had a blast making this one spectacular home.
To me, that is the most significant indicator seperating arm chair RE investors and those who, as you say, are actually getting their hands dirty in the process. There is no greater reward to be had after a completing a project like this than walking away realizing your involvment, dedication and hard work allows significant impact/improvement to the neighborhood that will be around for the next century or two.
Oh yeah, and the financial rewards aren’t bad either!
“westlooplo: What attracts people to these buildings are the facades!
My question is, how difficult is it to recreate these old cool-looking facades? Any why don’t more builders create them on new construction?
Can you put such a facade on a rehab deal, say buy an all-brick building and put such a stone facade on somehow?”
As anon pointed out while it is possible to recreate a period facade, putting a period facade on an all brick/cinder block building, it is very costly and there is no return on that type of investment as there would be on an original that has been renovated. Those who know construction will be able to tell the difference between real and new materials that were fabricated to give the same effect. You can see that on the replacement stairs of the Chicago mansion…one look and you realize it is not original to the building.
Builders across the country have recreated period details in the past (noticed it is not common any longer in new projects) but have done so at a very high cost. These were not spec homes but rather are custom designed to the owners specifications.
I always get a kick when I read articles in design mags where new owners point out the obvious “It was a ‘reproduction’ of the ___________ style that we came up with after traveling all over ______________ and falling in love with that style of architecture”.
Like that even needs to be added.
I somewhat agree that people are at first attracted to these types of buildings because of their facades, but to persue it any further with the same admiration is rare. Once an experienced buyer realizes the rest is not done in the same style using the same materials/techniques, that attraction is gone.
Hey, westloopelo, I think you missed G’s point, he totally was agreeing with you…
G_rant, not G. G hasnt been around for a while.
In rereading his post, I agree…..
My apologies.