Mining a Property Gem
by Donald Van de Mark
Even a high-priced Manhattan can be a source for hidden property gems.
I found a large one-bedroom co-op in Manhattan with a valuable defect.
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A seller eager to sell who won't be unreasonable about price or terms.
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Affordable financing from the seller, a bank credit line, or assuming the existing mortgage.
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Occupants who will move out. An occupied house will slow your progress.
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A good quality school district. Poor schools drag down resale values while good schools attract families and raise house values.
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The kitchen was straight out of Bedrock � rough, fake-stone walls oddly placed at the back of the living room. But the rest of the apartment was a superb bachelor's pad � sleek with marble this and built-in that.
Another big "problem" was a monthly maintenance fee 50 percent more that it should have been. The building had a huge mortgage with a rate topping 10.25 percent. I reasoned that the mortgage could be renegotiated and then the maintenance fee would be cut.
The good news was that these two flaws scared everyone away. Even though this gem was located on the eighth floor at 82nd Street and Central Park West, a prime location that is now more expensive than Fifth Avenue.
I bought the apartment in the summer of 1995. A year later I bought the one-room studio behind it. I paid $385,000 for both. The real estate market in New York City started to surge and the location of my property was so good it was attracting buyers who could afford to rip out a kitchen if they wanted to.
By the fall of '97, I sold the Flintstone kitchen and the studio to go with it for a 77 percent gain.
Convinced now?
Look for the defect, find the profit!
Even Uncle Sam's In on the Deal
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