What Would You Do? (Advice Needed)

gih101 · October 2014

Hi All,

I'm new to Brooklynian but would really appreciate any advice on the following situation.

Firstly, a little about myself... I am a young Asian American guy, newly married, small business owner and looking to move to Crown Heights. I've managed to save enough money for a down payment on a condo or coop. I have two primary options available to me, as listed below, and would love to get your input on what you would do yourself if you were in my position.

1) Purchae a condo or coop in the $550-600k range (1 bed) in a renovated or newly built condition located in the north western Crown Heights area (west of Nostrand Ave). I've noticed there aren't that many outstanding options for that area in my price range. I'd take out a mortgage, of course. I'd only be interested in this area or areas of very close proximity as it is the most central and easily accessible to all my shop locations. Plus WCH has become a relatively safe area with many new businesses as you all know already.

or...

2) Use that money to renovate an entire floor (about 1,200 square feet) of a three story building that is owned by my parents located on the corner of Utica Ave and Union in eastern Crown Heights. The building is in good condition itself although the floor on which I'd live on would definitely need a full renovation.Tne great thing about this option is that I'd be in full control on how to layout the apartment space and build it from scratch essentially. Further, one of my stores is located on the ground level of the building. I would be mortgage or rent free but would pay all utilities and other expenses along with yearly tax for the space. However, the downside would be that area... My family has had various businesses on Utica Ave and although we have seen remarkable change in the past few years, we are well aware of the crime and generally unsafe nature of that area.

What would you do?

Would you join the wave of other young new home buyers and buy a small but nice apartment around northwest Crown Heights near by Classon or Franklin or would you bet that change will eventually come to Utica and live in a bigger and beautifully renovated space mortgage free?

Thanks for reading. Looking forward to any insight provided!

ltjbukem · October 2014

renovate the whole floor.

southeast · October 2014

Option 2

MOD · October 2014

I'd go with the renovation (sounds like a sweet deal!), however, if you find a condo/coop you love -go for it.

Others can correct me, but the way I see it you can't loose with either option. Change will come to Utica, and likewise, coops in CH will continue to grow in value -so it's a good investment and you can always sell at a profit.

TinaTot · October 2014

Renovate.

It's not like the NW of Crown Heights changed overnight. It took a long time for it to be the hotspot it is now. As as wise man once said, "Change is coming round real soon make us women and men." Wait no.

Change will move East - it might take a while, but it will come and you'll have a place that is perfectly suited to your needs and tastes in a great area when it does.

whynot_31 · October 2014

You are young and newly married. So your partner's willingness to tolerate Option 2 (dirt, noise and living in a building owned by your family) is key to this conversation.

Option 2 will always be a transportation hub. Soon, it will have a lane that is restricted to buses.

Huge numbers of people pass by your store everyday, from areas of Brooklyn that are not changing as fast. As a result, it strikes me as being more resistant to some types of change than the surrounding areas:

-It will always be noisy.

-It will always be filled with people looking to purchase something on their way to or from work.

-As a business strip close to some very troubled neighborhoods, it will always be targeted by criminals who are not motivated enough to travel further to "work".

-It may always be an area that people pass thru, and might not ever become a place people stick around long enough in to enjoy a nice dinner.

Despite these factors, I see the potential financial gains from #2 as being greater than #1.

Despite all of the above:
If I was young, had a contractor I trusted, and had a partner that was ok with the plan, I would do #2 for the next few years.

Then, once I had a lot of equity, I would want my freedom and buy a place that was not tied to my family.

Vanderbilly · October 2014

However!

I have the feeling that you will end up in that floor of your parents' building one day, when the timing is right, when the neighborhood starts showing the inevitable signs of improvement. It would clearly be a great investment to buy property in your parents hood and wait for it to appreciate. But your family already owns it so you don't need make that jump just yet. If your heart is tugging you toward a fun condo with big windows and some roof area for grilling with your friends, and possibly a gym just servicable enough to for your wife to enjoy on a rainy day, I say GO FOR IT. Enjoy this moment in your young life. And one day soon, when you stop feeling so young, sell your place. Use the built up appreciation to renovate to your liking.

Live the last throws of your young fun life, until you both feel ready to become one with your parents.

Amirite?

crownheightster · October 2014

I'd think long and hard about how long it will just be the two of you. If you plan to have kids, once a baby arrives you will be at home a LOT more and you will want to be happy with the stores, parks, public spaces, transit that you have around your home in immediate walking distance. You could have a GREAT apartment, but if the location makes you not want to walk around with your stroller, then its not worth it.

I'd recommend keeping close eye on coops in Crown Heights North. Some real beauties appear on the market, and they are often well-priced with a lot of opportunity to build equity. 960 Sterling Place is a specific building to watch: big beautiful apartments, great location, nice people in the building, well-managed property.

Also, if your family owns the Utica building, I think that so long as they don't randomly sell it, you can keep it on the back burner for awhile until you 1) need the space, or 2) the location imroves. You could always do a tasteful renovation on the floor that you would want to live on, rent it to good tenants, and then use the rental money to enable you to buy a nice condo or co-op!

gih101 · October 2014

Thanks for the advice everyone! Man, it's still a tough call and much thought is still needed but I'm definitely leaning towards option 2, as well.

@whynot interestingly enough, it was my partner who first suggested this idea so I definitely feel lucky to have someone as adventurous and financially fiscal as me. You make very valid points when you say it'll always be a transportation hub. That's exactly why my parents believe the change will come as far east as Kingston but Utica will always have dangerous elements, albeit reduced in the future. This may also be likely due to the fact they've worked on Utica for the last 25 years and haven't seen as drastic of a change as in other parts of Brooklyn. I tend to think it'll get safer sooner than later for that very same reason. The Utica Ave station is the last express 4 stop and that convenience may attract people further east.

lox · October 2014

Option 2. I bought in West CH 10 years ago when you could get a lot for your $. It was still a little rough then with gangs and gunfights but that has for the most part disappeared and now you see how things have changed. My belief is you need to be brave and take bold action when you see change on the horizon. If you wait too long you'll miss the boat. That said, like someone else mentioned above...Do you want to own something tied to your parents? That could end up being way more trouble than it's worth. Good luck with whatever you decide.

whynot_31 · October 2014

I just played with google. Can I assume your parents own the New Eden Farm vegetable market?

https://cbks1.google.com/cbk?output=thumbnail&cb_client=maps_sv&thumb=2&thumbfov=33&ll=40.667829,-73.931278&panoid=sSzABghKQgNO6pZ23oLlwQ&yaw=136.1&pitch=3.3&thumbpegman=1&w=300&h=118

southeast · October 2014

@whynot_31 - is safe to say that everyone played with Google for this one.

Before we get an answer, let me throw in my thoughts - I think it needs to be one of the corners on the north side; the south side has buildings in which "an entire floor" would be more than the 1,200 square feet mentioned.

southeast · October 2014

Reading his description again, I'm leaning towards the northwest corner.

whynot_31 · October 2014

The Eden Farm building does have a large footprint.

I hope it is ok with @gih101 to factor in that he is asian american, and his parents have worked on Utica for the last 25 years. If it is, we may want to pay special attention to nearby buildings with dry cleaners, laundrymats, or chinese restaurants in addition to the above vegetable market.

Belovid007 · October 2014

Renovate the floor and create the space you want. I live in that area and while it's no Franklin Ave, the area is good and getting better. I take the 4 at utica every day and haven't had a problem.

Why settle for a tiny 1 bedroom now, when you can design a much bigger apartment to your taste and then, if you want a fancier apartment in a few years you can rent out that place and buy a new condo with the rental income. I'm a homeowner and this is my plan.

booklaw · October 2014

I'll play devil's advocate... I think you should buy something... (Anything!) as soon as you are financially able to do so.

Historically, Brooklyn real estate prices have increased exponentially, and much, much faster than most people are able to accrue savings.

So I think you should buy now to take advantage of rising apt./house prices, so that you do not find yourself priced out of the market a few years from now.

gih101 · October 2014

sorry for the delayed response.

@vanderbilly, belovid & lox great advice and encouragement, thanks.

Not surprised to see this has turned into a guessing game, haha.

whynot was close but southeast hit it on the head. This is us: alumniofny.com

gih101 · October 2014

@booklaw exactly. the exponential increase in home values in brooklyn is the primary reason I want to buy now!

booklaw · October 2014

Nice website!

gih101 · October 2014

@crownheightster good advice. I'll definitely be on the lookout for coops in north CH. Haven't seen much recently but yes, 960 Sterling is really nice.

And yes, I'd ideally like to both renovate the space to rent out and buy something but financially can't swing that now....

gih101 · October 2014

@booklaw thanks!

whynot_31 · October 2014

I was assuming that he would somehow be able to get some gains from his family's property as a result of doing all of the renovations.

He could get a percentage share of its value, or something. His family would have to agree beforehand, of course.

eastbloc · November 2014

I think buying a condo in Crown Heights at this point is a little close to what might be the peak of this market.

If you can make some arrangement to obtain equity in your parents' property by renovating it and living there, that's a win-win.

laura palmer · November 2014

My sources say a two-bedroom and a studio at 960 Sterling Place should be coming on the market very soon — keep an eye out!

What Would You Do? (Advice Needed)

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