The Itinerant Urban Gardener

IT BEGAN when my daughter moved into a Prospect Heights brownstone with a struggling pine tree in a barrel  out front. Each time I visited, I eyed the dead branches, wishing I could take a pruner to the thing and tidy it up. One day, I couldn’t stand it anymore. I told her, “I’m going to prune that pine. If your landlord says anything, tell him your mother is an itinerant urban gardener who goes around pruning people’s shrubs unbidden.”

While my East Hampton house is rented out, I’ve been getting my gardening jollies catching up on maintenance in the yards of my buildings in Boerum Hill and Cobble Hill. I ride around with a wooden box of garden tools in the back of my car — a hand rake, lopper, pruner, shovel, gloves, trash bags. When the urge to garden strikes, I’m ready. But I can see how this could get out of hand. Last week, I was walking along a Park Slope sidewalk and saw a lovely Japanese maple in a cobalt pot in someone’s front yard. It was full of weeds. My fingers itched to reach over the iron fence and pull them out, but I restrained myself. One recent morning, in Philadelphia to visit my son, I went out in my pajamas at 7AM and pulled 2-foot-tall weeds out of cracks in the sidewalk in front of his building … and the building next door.

Soon, I’ll have my half-acre to play with. In the meantime, I stealth-garden on other people’s property and enjoy what they’re doing with their window boxes, tree pits and containers. They’re doing a lot; it’s an encouraging sign of the times.

Below: March of the pots, a trend I’ve spotted this year for the first time. This is good news. In decades past, they might well have been stolen.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Above: Window box explosion in Philadelphia’s Queen Village neighborhood. Below: Ivy and seasonal containers decorate a carriage house in Old Kensington.

Below: Orange cosmos and white gaura have burst through the iron fence around this apartment building in Prospect Heights, Brooklyn, seeding themselves in cracks in the sidewalk.

Below: A proudly tended Brooklyn tree pit with petunias and variegated hosta.

Investing in Philly? Consider Kensington

FROM TIME TO TIME, people ask me where to invest in Philadelphia real estate. (Sometimes they ask me where to invest in Brooklyn, and I say: “Philadelphia!”)

But within Philly, I say Kensington, particularly the southern section sometimes known as South Kensington, Old Kensington, or even Olde Kensington, a neighborhood just above played-out Northern Liberties (that was the place to invest 10 years ago) and west of hipper-than-ever Fishtown, recent darling of New York Times reporters. I own a two-unit building in South Kensington — two back-to-back trinity houses, left, built in the 1840s as housing for workers in the area’s massive carpet and textile mills. (My house is the one on the right in the photo, with the peeling cornice; there’s a three-story unit in front and another in the rear, reachable via the alley between my building and the one next door.)

Many of the weavers and textile workers immigrated from England in the mid-19th century, when the area was known as “Little England.” When I bought the house in 2007 for $137,000, the surrounding blocks were really dilapidated — some of the houses, like the ones in the group below, were literally sagging. They’ve since been renovated, and their rooflines are more or less parallel to the horizon.

There were — and still are — vacant lots and hulking mill buildings all over the nabe, like the two below, both within a block of my building. It all looked ripe for adaptive reuse, especially large-scale residential conversion, but not much was happening.

The building above, on 2nd Street and Cecil B. Moore, still looks undeveloped.

At Palethorp and Cecil B. Moore, above, this old industrial building appears inhabited.

That was only six years ago, and now it’s happening in a big, big way. Around the corner from my building, Oxford Mills, below, is well on its way to becoming 141 rental lofts, with an innovative program of reduced rents for public-school teachers, and amenities such as gym, lounge, etc.; and a mixed-use mega-development called Soko Lofts is on its way. There are many other projects of the same ilk: you can find posts about some of the activity here on Curbed Philly.

Across the street from my little building, where once was a vacant lot, a new residential building, below, is going up. It’s of a type often seen in Philadelphia but never in New York. It’s too low-density, I suppose — only four stories high, with box windows and terraces and modernistic use of color. I don’t love the look — these buildings seem insubstantial to me, used to brick and brownstone as I am — but I do find it exciting that the neighborhood is roaring with development.

That’s the 1840s St. Michael’s church in the background, above, the view of which, along with some sunlight, we are sadly about to lose.

The building above, on Second Street, is typical of new Philly architectural design.

South Kensington’s main artery is Frankford Avenue, shared with Fishtown and  quickly becoming lined with bars and restaurants, including a couple of high-profile ones owned by celebrity restauranteur Steve Starr (Fette Sau, an upscale BBQ place, and Frankford Hall, a beer garden) and the new Philadelphia-based La Colombe coffee roasting complex, distillery and cafe.  Each time I visit, there’s more.

It’s spreading, it’s growing, it’s crazy affordable compared to New York City. And it’s a short bike ride to Center City, whose skyline is visible from most parts of the neighborhood.

Priced out of Bushwick, Brooklynites? Think Kensington.

BOOK REVIEW: Crash Boom! Rx for Real Estate Wealth

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.

Chip Off the Old Block

WELL, I HOPE I’M SLIGHTLY MORE DELICATE THAN THE PHRASE ‘old block’ implies. But I use the expression because my 25-year-old son and his girlfriend just closed on an old house in Philadelphia, following my lead in acquiring vintage real estate. It’s in Fishtown, an old working-class community just north of Center City — a wonderful corner building that once housed a shop selling newspapers and cigars, according to an elderly neighbor. I’m guessing from the decorative brickwork around the cornice and the Eastlake-style fireplace that the house is from the 1880s.

I encouraged this purchase all the way. In fact, I looked at the place myself back in ’06 when I was shopping around for an investment in the area, but it was too expensive for me. The owner was asking 360K at the time, with one rental unit. I ended up buying a smaller, much cheaper place in nearby Old Kensington.

Then, when my son and his girlfriend were house-hunting this past winter, hoping to take advantage of the Federal first-time home buyers $8,000 tax credit, the Fishtown house was on the market again (same seller). They got it for nearly 100K less, with a 3% down payment and an interest rate under 5%. Extraordinary opportunity, and one that some of their friends in Philly also took advantage of.

The house is in very decent condition, with a new heating system, though they’ll need to totally renovate the kitchen and bathroom.

They’re moving tomorrow. Very exciting for them and for me.

I ♥ Philadelphia

Thomas Bond, physician, 1712-1784

I’M IN PHILADELPHIA at the moment, in the breakfast room, below, of the Thomas Bond House, a delightful small hotel in Old City. The building dates from 1769, and I’m in my element, taking in the worn pine floors, 12-over-12 windows, toile de jouy wallpaper, Windsor chairs, etc. I’m a sucker even for the hokey details like electrified candlesticks in all the windows.

The Bond House is across the street from another of my favorite Philly places, which would be exceedingly corny if it wasn’t done so very well. City Tavern, below, is a painstaking re-creation of the pub/inn where George, Ben, and the rest spent many happy hours, on its original site.

That’s where I went yesterday for a late lunch (“midday fare”) after I concluded the business that brought me here: meeting with a contractor about interior repairs in my Queen Village building, following major roof failure during last month’s rainstorms, and welcoming a new tenant in Old Kensington.

I love to sit in a corner booth at the authentically underlit City Tavern, eating cornbread-encrusted oysters and sipping a citrus-y pale ale from Alexander Hamilton’s own recipe, served by waitstaff in bonnets or breeches who say “Good afternoon” rather than “Hey, what can I get ya?”

Today I’ll try for about the 5th time to get into the elusive Bishop White House, above, a fully furnished house of the 1780s run by the National Park Service. When I called yesterday for information, I was told its opening was ‘contingent upon staff.’

Happily, the Colonial garden at Walnut and 4th, below, is always open.