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Buying Our 2nd Apartment in Brooklyn

10.10.2019 by Lisa // Leave a Comment

Two years after we moved to Houston, we found ourselves in a bit of a pickle. My husband had been laid off from his job and it wasn’t clear that there was going to be a pickup in the local economy, at least not in the sector that we worked in (oil and gas). We had also just had Emi, and being far from our family and friends was beginning to take a toll on us. People visited us often, but it just wasn’t the same as being a subway-ride or car-ride away from our support network.

A few weeks after I returned from maternity leave, my group head spoke to me about an opening on a different sector team at my firm’s New York office, where the company is headquartered and where I worked before moving to Houston. Was I interested? I was going to miss my team and coworkers, but I felt like it was the right time to move back home.

The process went quickly, and before long, I was slated to relocate back to NYC. Because I was returning to my hometown, and most likely for good, I knew that I wanted to purchase an apartment, as opposed to renting. During the lulls of my maternity leave, I had spent time looking at listings of potential pied-a-terres, thinking that I would buy a second home for our frequent visits back to NYC. I had reached out to my high school classmate, who worked as a real estate agent, to help me look for a small studio apartment that was under $175k. When the job opportunity became more formalized, I quickly pivoted and started looking for a larger place for our little family of 3.

I had broadly been searching in Brooklyn and Queens, preferably by Prospect Park (Brooklyn) or in Forest Hills (Queens). While casually searching one day, I happened upon a sponsored sale for a fairly sizable 1-bedroom apartment in a building located a few blocks from the largest cemetery in Brooklyn, Greenwood Cemetery. Certainly not a park, but a green space nevertheless.

Real estate in 2016 was frenzied and I knew that it was a relatively good deal given it was a sponsor sale, located in a transitional but mature area adjacent to a family-friendly and gentrified neighborhood, and had great access to the subway. As a result, I did the only logical thing. I told my agent to make an offer immediately, at ask, sight-unseen. I had already been pre-approved for a mortgage, and combined with my offer at ask, on the day the listing was posted, my offer was accepted.

I can’t say I would recommend buying a home based only on grainy photos without making an actual visit. However, I was disadvantaged by the fact that I was purchasing in a different state and it was an extremely strong seller’s market. It ended up being the right move to make for me in my situation, but certainly not something I intended to do again.

The sponsor sale aspect is an unusual concept, even in NYC. The building was a cooperative (coop) building, a structure I was familiar with. An apartment is “sponsored” when it is owned and sold by the original owner when the building first converted to a coop. The owner of many of the units of the building had been renting the apartment as a rent-controlled apartment. Given the strength of the market, when the tenant moved out, the sponsor decided to sell and cash out. Sponsors are limited by the terms of his or her original coop contract and cannot sell above the price specified on the contract. As a coop, the apartment was assigned a number of shares, and the price limitation was on a per share basis. The sponsor had listed the apartment at the maximum price, which I gladly paid, because market prices were actually substantially higher.

Sponsor sales have other types of quirks. In our case, the sponsor was allowed to install a washer / dryer, literally unheard of in most coops and apartments in the city. Even though there was a common laundry area in the basement, we negotiated the washer / dryer clause into our contract, because we knew it would be added convenience and because it would only contribute to resale value.

Other than the washer / dryer, we had few other asks. We were buying as-is and we knew it would have to be substantially renovated, so we even bypassed having an inspection, which is actually not that common for cooperative buildings. Within 2 months, my mortgage commitment came through, and we were ready to close.

Ken and our daughter, Emi, moved back to NYC at the start of November 2016. In mid-November, he did the closing, while I stayed behind to wrap up loose ends at my job and manage the actual packing and physical move of all our possessions to NYC. And by the end of 2016, a few short years after I bought my first little studio apartment, my husband and I became the owner of our second piece of property in Brooklyn.

You can read about my first Brooklyn property purchase here!

Categories // House Tags // 1-bedroom, apartment, brooklyn, coop apartment, cooperative, greenwood cemetery, kensington, prospect park, sponsor sale

Renovating Our Little Studio Apartment Kitchen

09.19.2019 by Lisa // Leave a Comment

Our Studio Apartment

After a year of living in my little studio apartment on my own, my now husband moved in with me. My 470-square foot apartment was the perfect size for me, but surprisingly, even with the addition of another person, we were able to find pockets of storage and space for his things (albeit his minimalistic ways helped). We did need to make some areas of the apartment a bit more organized and efficient, though, because in a small space, things can get cluttered and messy fairly quickly.

One of the big changes we embarked on was a renovation of the kitchen. It was a tiny 8 x 12 room, with little countertop space, insufficient storage, and overall, was just very dated.

I had set a budget of $10k for the renovation. I know for many, this may not seem like a small amount, but my budget really was fairly shoestring for a renovation that (1) included new appliances, (2) was fully contracted out (3) took my kitchen down to the studs.

To keep to a $10k budget, I had to make some strategic decisions, some of which I would still make and others that I would not.

Cabinets – Yes!
I chose Ikea cabinets (the old Akurum line, now replaced by Sektion), which I would definitely do again. They have held up well, offered great storage, and were very reasonably priced, especially when combined with Ikea’s twice-a-year kitchen promotion.

Appliances – Yes!
In some respects, having a small kitchen meant that my appliances had to be smaller, which generally cost less money. Although if you calculate the cost on a per square foot basis, it is probably a bit more premium than the standard 30-inch oven or a standard fridge. I ended up finding reasonably priced ranges at AJ Madison; the company also matches pricing if you find the specific model for less elsewhere. I purchased this slide-in option, a much more modern and attractive stove than the one that came with the apartment. I also found a slim counterdepth refrigerator that didn’t break the bank. A counterdepth fridge was key given that it wouldn’t stick out into my already tight kitchen. I would definitely choose to purchase both again.

Flooring – NO
I ended up using really inexpensive stick-on vinyl tiles – while I liked how they looked, they were not designed to last, at least not when it comes to accident-and-mistake-prone cooks in the kitchen. Within months, I had created a nice little divot in one of the tiles from placing a hot oven rack directly on the floor, which effectively melted down the plastic. While the tile is easily replaceable, it is also easily destroyed.

Contractor – Yes!
The contractor selection was the hardest part. I interviewed 6 contractors and finally found one who I felt like could work with me, my budget, and my personality, through Sweeten, a contractor matching service that had just recently started up. Sweeten has since blossomed into a very robust platform for renovations that have minimum budgets of at least $15k, but as a new start up, they were willing to work with my substantially smaller budget of ~$5k. My contractor took up the largest part of my budget, but looking back, he was actually relatively affordable. Given that I was renovating a coop apartment, I needed to make sure my contractor was licensed and that the renovation adhered to the alteration agreement established by my building’s board. He met both requirements and delivered my updated kitchen on-time and on-budget. The roster of contractors available have changed since I renovated my kitchen, but I would certainly use Sweeten again.

Countertops – Yes!
I ultimately went with quartz countertops, which was hands down the best decision I could have made. I originally wanted to skimp out on countertops and either do a laminate or a butcher block top from Ikea, which are really budget-friendly options. However, my contractor convinced me to try his fabricator, who could give me wholesale pricing. Also, while the per square foot cost of quartz was expensive, I didn’t really need to buy that much footage given the size of my little kitchen. I loved the countertops for its low maintenance, sheen, and durability. Quartz remains my favorite countertop material to this day.

Backsplash – Maybe…
Similar to my countertops, I decided to splurge a bit on the backsplash given I didn’t have that much area to cover. I ended up going with clear glass mosaic sheets at about $10 per square foot. They are sparkly and look great in photos, but the backsplash is still a bit of a toss-up for me. I’m certainly not unhappy with them but I think I would have been equally satisfied with something that cost less, like subway tile. In return, I could have allocated my budget more equally between my backsplash and flooring materials.

In the end, I exceeded my $10K budget by a bit, but only because I ended up adding some out-of-scope items, such as additional storage in the bathroom. Our investment allowed for greater function in the most important space in our apartment and made our day-to-day lives more effortless and organized. It was also mentally uplifting to see the new kitchen everyday – it added joy to our lives. And with some luck, it will be a good return if / when we decide to sell the apartment – kitchens ultimately do sell homes!

You can also read more about my renovation in this 2-part series on the Sweeten blog.

See our full studio apartment tour here.

Photo: Sweeten

Categories // House, Money Tags // brooklyn heights, brooklyn renovation, brooklyn studio, concord village, dumbo, dumbo heights, ikea, ikea akurum, ikea sektion, kitchen renovation, studio apartment, sweeten

Buying My First NYC Apartment

09.03.2019 by Lisa // Leave a Comment

In 2012, I became the proud owner of a 450 square foot studio apartment in Brooklyn, in a building situated conveniently right next to the Brooklyn Bridge. I never dreamed of owning property in NYC but I was really lucky. The economy was still recovering from the financial crisis and so property and mortgages were cheap, especially compared to where the real estate market stands today. I had a relatively good income, albeit I was still barely able to make ends meet (more on that here). I was able to borrow money from my mom and two aunts for the down payment (I promptly repaid my aunts as soon as I received my year-end bonuses but my mom’s loan is still outstanding, thanks mom).

Owning NYC property felt somewhat achievable because it was something my parents had accomplished for themselves. Like many Chinese immigrants, they were keen to build hard assets after moving to this country, and at one point, owned three houses in Brooklyn and Queens.

I purchased a coop (short for cooperative) apartment. It’s a real estate arrangement that is fairly prevalent in NYC and San Francisco in which I own shares of the coop, versus real property. At my closing, instead of getting a title to the apartment, I got a certificate of shares, which were predetermined when the building became a coop. From a practical standpoint, owning a coop means that I pay a monthly maintenance, similar to an HOA, there are restrictions to renting out or subletting my apartment, and I had to interview with the board. As a result of these limitations, a coop is more affordable than a condo or a house. I wasn’t bothered by these restrictions, though – it was all I could afford and I was just happy to be a homeowner.

Given the continued economic downturn and resulting low market demand for real estate, especially coming out of the housing bubble, I ended up buying my apartment at a steal, especially compared to where pricing is trending today. The low interest rate environment meant that I was able to lock up a low 3.25% rate, albeit as a 7-year ARM, which meant that I would either need to refinance before the 7-year mark or pay a market-adjusted interest rate after I hit my 7-year anniversary post closing. I wasn’t worried about it, though, because, well, 7-years seemed like a long time away, and I valued the immediate benefit of a lower interest rate (less cash flow impact). Also, given the sustained depressed economy, I did not anticipate interest rates rising in the near future, which, in hindsight, ended up being the right bet.

A few short months after I bought my apartment, my now husband moved in with me. What was already an affordable mortgage and maintenance (I was paying less than my previous rent!) became even more sustainable when split with another person. It meant that we had two people living in 450 square feet, though. But having a small footprint was actually beneficial in so many ways. We learned how to optimize our space. We spent frugally because there was no way to house any more stuff. We didn’t feel deprived, however. Our small apartment naturally fit our lifestyle and we entertained frequently and even renovated our kitchen, on a budget, and made it so much more functional. And over the course of 1.5 years, we saved enough to fund our wedding and honeymoon.

And after our wedding, it was on to the next adventure!

Photo: Sweeten

Categories // House Tags // apartment, brooklyn bridge, brooklyn heights, brooklyn real estate, coop, cooperative, house, studio

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