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SANDY, YOU BITCH. As one radio host put it, Sandy is a terrible name for a hurricane; it sounds like a girl you dated in high school. This massive hybrid “superstorm” needed a much more formidable name. Medea, maybe, or Zarathustra.
It was strange. Here in NYC, there wasn’t much rain at all. High winds pushed waters from the East and Hudson Rivers up onto the land, an unprecedented and very frightening event. The north Brooklyn neighborhoods hardest hit were Red Hook, Gowanus and DUMBO. I didn’t see the damage myself. I’ve been here high and dry, in my Prospect Heights apartment; when Mayor Bloomberg says to stay inside, I stay inside. It was only on seeing the shocking photos and videos, and hearing stories, that I began to grasp the extent of the destruction.
I’d come into Brooklyn from my Long Island cottage for a jury duty summons on Monday, now cancelled until further notice. Lucky I did, because my community in Springs was power-less for three days. Waiting out the storm here, snug in my brownstone pied-a-terre, I dodged the Sandy bullet completely. Prepared for the worst with food for three weeks, buckets of water, enough candles to fully observe every Jewish holiday between now and the year 6000, Sandy blew through Monday night while I slept. My lights didn’t even flicker.
When I ventured out, tentatively, on Tuesday afternoon, it was to meet a friend in one of the few open cafes. By today, Thursday, any venturing is still, of necessity, on foot. Public transportation is just resuming on a very limited basis. The shuttle buses the city has organized to replace the flooded subway lines between Brooklyn and Manhattan have their own long queues, above. Roads are gridlocked, and there are long lines for gas as well. For me, with my flexible lifestyle, these are only the merest inconveniences.
Yet for many, life has stopped. It’s apocalyptic in some places; you’ve seen it on the news. People are stuck in Manhattan high-rises, running low on food supplies. They’re rescuing people in rubber boats from Hoboken row houses. Overheard today at the gym: “…under two feet of water…” “..lost both cars and a motorcycle…” “…had just retired to the Jersey shore…” Meanwhile, my upstairs neighbor just told me, sheepishly, she had fresh-made mozzarella for lunch, from a fancy, well-stocked deli in Cobble Hill.
Today, I go about my quiet business with an enhanced attitude of gratitude.
Al fresco dining: one of the chief pleasures of the season. Above, the garden of Brooklyn’s Bedouin Tent restaurant on Atlantic Avenue, with a view of the Belarussian church next door
THESE DAYS, I’M BOTH a city mouse and a country mouse. I’ve been bouncing around from here to there — a few days in Brooklyn, a few days in Springs (Long Island, N.Y.), depending on what I have to do.
The newish and very welcome Botanica Garden Center on Atlantic between Third and Fourth Avenues
Look what’s behind the Botanica Garden Center, above
Out in front, impromptu green space
Row of three houses, surprisingly genteel, along gritty Ninth Street in Gowanus
Back in the country, I have a sense of purpose I didn’t have a couple of months back. An erupting garden, in need of watering, weeding, and deer-spraying, will do that.
My backyard greening up, as it looked a week ago
The scrawny magnolia I inherited is filling out, year by year
Great, deer-proof stuff: deutzia, I think it’s called
Local color, before the tree leafed out
Gardiner’s Bay, above, a short walk from my house
“Gobble it up with your eyes,” my mother used to say. Spring’s beauty is already fleeing. Trees that were in full flower a week or two ago are now all-green. Savor it while it lasts, and then — we have no choice — let it go.
I’M NORMALLY EXTREMELY SUSPICIOUS of financial ‘gurus’ and of people who have their heads swayed by their often-dubious advice. But a new book by Greg Rand, a real estate entrepreneur who contributes to Fox News (maybe that’s why I hadn’t heard of him) and has a radio show on WABC, has come to my attention. Crash Boom! Make a Fortune in Today’s Volatile Real Estate Market speaks to me. Naturally I like what Rand has to say: he validates my own experience and makes me think I’ve been on the right track by investing in rental property and clinging to it for dear life.
I’ve bought six properties, but never sold one. I’m an accidental real-estate investor. It started in 1979 with a Brooklyn row house that has three units, then a re-finance and the purchase of another Brooklyn townhouse in the mid-’80s, with two units. Both were bought primarily as homes; they just happened to have these extra apartments, which we rented out. We then let years go by — years when we could have swept up brownstones for a song — without investing in any other NYC property. But let’s not go there; my blood pressure numbers have been good lately.
It wasn’t until 2005, when my son went to college in Philly, that my attention turned purposefully toward investing in rental real estate, and I bought two early 19th century Philadelphia row houses with a total of five rental units. One is in a solidly upscale area (Queen Village), the other in a fringe neighborhood (Old Kensington) that nevertheless seems to be improving at breakneck speed. Both buildings have had positive cash flow from the beginning — not hugely so, but most definitely in the black, while I build equity month by month. Perhaps most important, I enjoy owning them. For me, it’s like collecting antiques — very large ones.
Buy, Improve, Hold is Rand’s prescription for building real estate wealth. Of all types of investment properties, he’s most partial to two-to-four family homes. “An incredibly appealing property type,” he says, and I concur. More tenants paying rent. And desirable: people want a backyard, Rand points out (most of my tenants have them, either shared or private). Though Rand doesn’t specifically mention vintage properties, many of the examples he gives, including a Victorian mansion in Tarrytown, N.Y., with commercial space on the ground floor and residential units above, resonate with me much more than if he was solely discussing condos or suburban homes.
Almost everything Rand says rings true to my ears. Here are some of his main points:
- It’s a great time to be a landlord. The current economic climate is providing investors with the opportunity to get a ‘deeply corrected’ price, and it also comes with a wave of new renters (800,000 new rental households in 2009 alone).
- The ‘technical drivers’ of real estate wealth — appreciation, leverage, amortization and income — do not exist together in any other form of investment. He likens these elements to a mixing board in a sound studio, calling them ‘the four dials.’ “As you push each of them up a little bit, the volume gets exponentially louder. You don’t need any of them to perform off the charts to get off-the-charts results.”
- Re appreciation, Rand points out that home prices are still above where they were ten years ago and the market is almost done ‘correcting.’ “In other words, the entire bubble has been erased. Poof! Gone.” In the long view, the historical upward trajectory is intact.
- Leverage steepens the return as a percentage of investment. Because most people buy real estate by taking out a mortgage, the cash invested initially is smaller in real estate than in the financial markets, compared to the eventual return.
- Amortization (paying off a mortgage) lowers the amount you owe as time passes.
- Rental income is icing on the cake.
The book also delves into what, for me, is the most seductive, creative aspect of the whole real-estate game: fixing up an ‘ugly duckling.’ Rand advocates finding properties in need of upgrading, not turn-key ones. He loves long-languishing properties that have become stigmatized, as in “Something must be wrong with it if it’s been on the market so long.” Let others pass it up. That’s where you can often find bargains, he says — something I’ve intuitively understood for a long time, but am still heartened to see in black and white.
Mind you, Rand’s book doesn’t say you’ll get rich quick. “A good buy on a house means you set yourself up for even greater returns as you ride the cycle forward and mature the investment over time.” The biggest mistake people make in real estate, he says, is selling in order to realize the profit, adding “Don’t do that!” He views equity in real estate as liquid, which is refreshing. True, it takes a few months to get to it, but it’s still a good place for your money. Let it stay where it is “until you have another real estate play to make or your objective has been met” (say, when it’s time to send a child to college).
There’s lots more — from how to find a neighborhood on the upswing (“Home Depot and Lowes don’t open stores on a whim”), to owning near where you live and work, to buying distressed and foreclosed property. And there are quite a few surprises (Rand thinks Florida is still a great place to invest, for instance).
My one disappointment is that Rand is not terribly helpful when it comes to how to get the money for a down payment in the first place. I hope that’s the subject of his next book.
To see my archive of blog posts on Rental Property Management, go here.
I CAME BACK TO BROOKLYN after a few days in East Hampton to find the place exploding — florally speaking, that is. Whereas the East End of Long Island is still brown and bleak, except for the relief of roadside forsythia, Brooklyn’s daffs and other bulbs are popping, and the street trees — white Bradford pears, magnolia, and redbud, are in full force, an immensely cheering sight against dark brownstones and rainy skies.
AT FIRST I THOUGHT this was going to be a hopelessly random post, a mash-up of recent photos I wanted to share but that had no particular organizing principle. Only when I looked at them all together I realized the bay windows, stained glass, and carriage houses do have something in common. They’re all in Park Slope!
Park Slope, Brooklyn’s biggest brownstone neighborhood — in fact, the largest concentration of 19th century housing stock in the entire country, I once read — is many things. Here are some of them, in alphabetical order:
annoying, beautiful, congested (in spots), Democratic, elegant, fucked, Gold Coast, historic, intense, jogger-laden, kid-happy, left-wing, mansion-infested, novelist-ridden, overpriced, parking nightmare, quiet at night, restaurant-challenged, self-satisfied, top-of-the-market, unfazed, Victorian, wifi-ful, xpanding, yoga-friendly, and zealous about its food coop rules.
(I can’t believe I managed to come up with 26 alphabetical adjectives — if you can do better on any of them, feel free. Click on “[#of] comments” in tiny type under the post headline above, and a form will open up for your comment. I know, WordPress doesn’t make it easy.)
I’ve never lived in Park Slope, though I’ve long admired its varied architecture, and envied its proximity to Prospect Park and the Botanic Gardens. And, of course, I wish I had had the foresight to snatch up some of those brownstones when they were cheap (I’m wincing, recalling a 5-story house with a mansard roof on the corner of Sixth Avenue and a North Slope block — Lincoln Place, maybe — for $150,000…Would somebody please KICK ME NOW?!)
Anyway, now that I’m in neighboring Prospect Heights, I find myself in the Slope more often. I’m getting familiar with certain blocks I trod on my way home from the Fifth Avenue bus.
The list of places I want to try/hang out is growing…Cafe Regular, Juventino…and many of them are in the Slope. It’s like discovering a new continent, that’s how vast it seems to an outlander. And with such architectural riches, it could take a long time to get bored.