Tips on Buying a House in Brooklyn Part 2 by greg brophy

Armed with the knowledge of FHA's and what we can afford we went to see a few places with the broker. Most were around $800,000 in Bedstuy and not exactly the beautiful brownstones we were seeing everywhere. They were crappy wood frame houses. We were basically looking for a place with a full finished basement so I could use it as a darkroom and Eni to sell antique furniture from. We needed at least a two bedroom and a rental apartment above. Eni started calling other realtors and really digging through sites to find places. Eni would call to talk to the broker, but a lot of times they did not take her seriously or were very rude with her. Mostly we think because English is her third language and she is a woman. When I called they were all polite and accommodating. Eventually she made an appointment with a realtor I shall call Samuel. I don't want to use his real name and it will become evident later why. He had 3 places to show us in Bedstuy. When we met with him, I had an uneasy feeling and did not completely trust him and neither did Eni. We looked at what he had and they were much better, but still not right. Sam suggested another place in the Flatbush Ditmas Park area. We were hesitant because we had not really heard much about that area. The next weekend we went and saw two places. The first one was very big, but not the prettiest place I have ever seen so we went to the other place. This house is a Limestone townhouse that when Eni walked into, she fell in love. It had everything we wanted. It was fully renovated and had access to the backyard from outside the house and so we made a bid. The price was $800,000 but put a bid in at $750,000. They countered with $775,000, which was in our budget so we accepted. Then the real fun began.


I knew nothing about closing on a house so I asked a few coworkers for recommendations on a lawyer. There is an old joke that goes “What’s the difference between Linda (the lawyer that was recommended) and a junk yard dog? Lipstick.” Well that summed up our Lawyer pretty well and we were pretty confident with her that we would not get screwed. They sent over the first contract and she basically laughed at it. Basically they wanted to sell as is with no warranty or guarantee on anything with the house. This is actually normal with developers who renovate and flip a house in two months. She asked about permits. Their answer basically was “Permits? We don’t need no stinkin permits” this is Brooklyn. Ok what about Certificate of Occupancy? “What you actually want to live there?” What I basically learned was that nobody gets permits in Brooklyn (or at least in places like Flatbush, Bedstuy, Crown Heights or Bushwick) there is no way you could buy renovate and sell within two months and get permits which is what they all basically do. Now when buying a house the two most important sites you can use are: for finding out about permits and violations and for months I lived on these sites researching everything about the house down to who owned it in 1905 by pulling up images of the original contracts. Even my agent was amazed (and pissed) at how much research I had done. The house had a few minor violations but nothing serious that wasn’t going to be cleared by the time we closed. As for the permits, everybody told me not to buy a house without permits, but we could not find a single house under 2 million that had them and wasn’t located in Park Slope. Just to check, I went to the house while another agent had an open house and pretended like I had never seen it before and asked about permits. Same thing, no permits in Brooklyn.


Ok so we said it is a risk we will have to take in order to buy a house, but lets at least get it inspected before we sign anything. I found a good inspector named Zack (real name) and he was great. He spent 3 hours and was very patient. Well while we where there the roof started to leak much to the embarrassment of the agent. Next thing he noticed was termites. They tried to hide it but it was still slightly visible. The biggest problems with these houses that they flip is that if it has a basement and it is sheet rocked, they are not doing it to make it better or more valuable, they are doing it to hide problems with the pipes, beams or termites. We were actually shown a house that had such a bad termite problem that they had eaten through most of the beam and I thought that if I touched it, it would collapse then and there. They wanted 1 million for that house. Armed with the report with the inspector with went back to negotiate. To say they were less than willing to negotiate is a huge understatement. They were so hostile and nasty that they actually cursed out my lawyer for wanting them to fix things like a leaky roof and termites and give a warranty. Two things sellers really hate, warranties and escrows. The real estate agent told us that our lawyer was being too tough. I responded great I don’t want a push over for a lawyer; I want someone who is willing to fight for our own best interests. Eventually the real estate broker offered to fix the roof out of his own pocket to close. Well as we tried to finish up the details our lawyer went on vacation and when she got back their lawyer went on vacation so that was 3 weeks of stress about whether we would close before someone else came along with a better offer. Now they are both back and we are trying to get them to agree on the final contract and the seller’s lawyer stops responding. Not a good sign. They told us eventually that they no longer thought it was worth their time to deal with us and that we were not serious about buying the house. In reality they got a cash offer for $740,000 and they took it. We were livid. I was so angry and sick to my stomach. Eni just keep saying it was not meant to be and we will find something better, but at this point the prices of the houses were going up by $50,000 a month and were quickly going out of our price range. Depression set it and if I heard one more person say you will find something better, I was not only going to punch them in the face but their Grandmother as well.


Afterwards I said to Eni I need a week to just rest. I had been dealing with constant phone calls between the lawyers and agent and fighting everyday and I was just emotionally exhausted. Three days late my persistent wife arranged to see some more places. I was reluctant to look and we did for months. We even looked out as far as Cypress Hills, which has some beautiful homes, but they are just too far from any meaningful transportation. Then as we were giving up hope of ever finding a place our agent took us too Crown Heights.



Tips on Buying a House in Brooklyn Part 1 by greg brophy

You lookin at ME?!

You lookin at ME?!

Or Don't Do What I Did.

Things have been quiet on the site and social media lately because for the past 8 months my wife and I have been looking to buy a house in Brooklyn and it's a full time job. Well as of the end of December, we got a place and it is great...sort of. I will give you a blow by blow of what happened and what to avoid.

Our goal was to get a place that had at least two bedrooms and a good size basement. We had lived in Inwood, a small community above Washington Heights at the end of Manhattan. I had lived in the same apartment since 2003 and the rent was low but it was a small one bedroom and we were quickly running out of space. We had been looking for years to buy in that area but most places are Co-ops and require at least 20% down which took a while to save. A couple years ago while trying to save, we started to notice men getting off the subway with funny looking mustaches and beards. We looked and thought maybe he missed the L train stop at 14th by about an hour and then we realized "Oh Shit! The neighborhood is about to really change." For a long time Inwood had been a hidden secret. A great little area with lots of wonderful parks. It did not have much in the way of restaurants, (unless you like Dominican food or fast food) but that quickly changed. With Dyckman st. becoming a hotspot with Jay Z and Beyonce at La Marina and people looking for affordable rents (think 1200 for a one bedroom) we were quickly priced out of our beloved Inwood. We watched one bedroom Co-ops go from 300,000 to 600,000 in a couple of years.

While looking for other places to possibly move to, my wife suggested we take a look at Bedstuy. I knew it was close to Bushwick and that area has just exploded, so I agreed. On a Sunday morning we made a 3 hour train ride to the area. We just decided to walk around for a while to get a feel for the area. We walked up Malcolm X Blvd and as we passed people, everyone was very friendly and made it a point to say hello. Sorry, I am a jaded New Yorker and when someone says hello, they usually want something or are in the process of lifting your wallet. This was not the case, and contrary to the stereotypes, people had manners in Brooklyn.

We were walking down the street and  most Real Estate offices were closed, but then we came upon a place that was called Reliable Real Estate. Again my jadedness struck and any place in NYC that has reliable in their name is usually not, but again Eni convinced to go in, she is not good at taking no for an answer. We talked to a young Hispanic guy at the desk and he directed us to one of the agents. I believe his name was Avi and asked us what we were looking for and how much could we afford. We told him $500,000 would be stretching it. He laughed at us and told us that this neighborhood was well beyond that price range. He asked how much we make and we told him. He then pulled out a chart and said well if you make this much you should be able to afford $800,000. We were shocked and I told him I don't have a rich uncle. He said with a FHA loan at 3.5% down you could afford a place like this. We had never heard of an FHA loan. Basically it is a federal loan for first time home owners that allow you to only put 3.5 - 5% down. Great where do I sign!!! Well of course their is a catch, it is NYC and their is always a catch. On top of your Mortgage you have to pay PMI which is Private Mortgage Insurance. For a $800,000 mortgage you will also have to pay about $1,500 a month for PMI. So a $4000 mortgage and $1,500 PMI and well its still a bit much. Then he told us that what most people do in these areas in buy a two family home and rent out the top floor for anywhere between $1500 and $2500. Ok that takes care of the PMI. The other thing he told us is that between 2-5 years most people refinance and get the PMI removed. You can do that when the estimate for the house goes up 20% or you have paid off 20% of the Mortgage. Plus he told us that you will get large tax returns at the end of the year that will help with the Mortgage. So basically we could have a house in Brooklyn and pay anywhere from $1500 to $2000 a month. Ok not bad and it definitely seems doable right? Right! Oh lord help us.

Next - Out of the Lions Den and into the Wolf Pack.