Buffalo Rising Online

You have to appreciate their desire to contribute to the downtown housing market and their effort to wallk-the-walk. Cou;d the BERC or any other agency have helped them had rhey known to go there for help? Also, does anyone know how the gentlemen who owns the "Big Blue" at at 165 Delaware coming along with his project?

There has to be something done with the Louie's hotdog resturant to the right of this building. Is the buliding that tall? What's up with that enormously large yellow wall??

Any how, good project. It will be really great to see this section revitalized. It is one of those jewels - diamonds in the rough that no one wanted to jump on yet - but these guys did.

Good work and I can't wait to add the blog to my daily reading.

If you've ever thought you wanted to get into rehabbing property, but have no experience, read the blog that is linked above. Get out a piece of paper, and a pencil, and work through the numbers. A project that is this small, with all the overhead of professionals, leaves no room for a profit. Quick math shows costs close to $100 per square foot. In my opinion, this story is not so much about a problem with the area, but basic business issues that don't add up. As pointed out above... does it look high end? Besides the complexities of rehab/licenses/construction, a property, to be profitable has to be considered like a new product. What's the pricing, marketing, packaging, etc. and do they all fit together.

This kind of property lends itself to a mom and pop fix up, with mid range apartments. Get some income, and improve the place a bit each time a tenant leaves. It's not as pretty as architectural renderings, but it's how you make things work with a property like this (which means you're probably working on the margins of being legal.... which means you need to be prepared for some sleepless nights... or don't attempt it.).

Finally, you can't look at the numbers optimistically, and think somehow they'll change. Successful projects require a number of things. Good intentions are a start....but have nothing to do with bringing home a project successfully. By reviewing this project, a newcomer could learn valuable lessons that might lead to better outcomes elsewhere.

According to my research, 9 Genesee sold for $74,500 in 7/2005 and is currently tax assessed at $100,000. Square footage is listed on the city record as 2967'.

If this group flips this building for a profit, I wish them luck. It would be interesting to know how much their investment is aside from the purchase price and sweat-equity. Property taxes, garbage user fees, insurance, architectural drawings, have to be running in the tens of thousands.

Can anybody tell us anything about the group? I'm not expecting personal details, but what was their level of experience? Obviously this was there first venture, but do they have a background in related fields? I wish things could have turned out better for them, but I'm trying to get a better grasp on who they were and if this project ran into some problems they were not able to field or if they were just not suited for this kind of undertaking. Their blog doesn't really help much. It pretty much just says that they were inexperienced when it came to predicting project costs.

Instead of rebuilding it into a luxury space, why not make 2 habitable CONDOS, sell them for 150,000 each and have a modest monthly maintenence fee ($250-300) to pay for upkeep/costs? This way the condo owners can pay the expenses of putting in top-of-the-line whatevers as they choose. You'd really only need to get the building up to code, make it look pleasing on the outside and in shared spaces like corridors, and clean up the inside: open the floorplan, put in decent flooring, good plumbing, and basic fixtures (cable, electricity, gas). Future owners can outfit the kitchen, paint, refloor, carpet as they please and at their own cost as owners.

If you can sell 2 units at 150,000, then you're up to around 300,000 (give or take realtor fees) which will pay your architecture fees and allow you to restore confidence with your private loan. Fix up the exterior even further and get the retail space up to standard enough to bring in a tenant. Once you have a tenant you can decide with them what particulars they want in the space, and if they should handle it themselves for a temporary cut in rent rate.

The way out of this problem that I can see - that isn't simply unloading this on someone else - is diversifying, or further collectivizing, ownership. You don't need to max out the interior here and hope to make a fortune off of rents. There clearly isn't enough capital for that. Get condos owners in there who can take those costs off your hands and put some more liquid in your pockets.

I don't smell "flip" here, just a group that did not realize the true expense of a rehab.

And their justification for nearly doubling their investment from $75,000 to $140,000 in three years is?

Let's look at this another way... as sal points out, this is a 3000 square foot property. This is similar to a good size home. With all of the costs this group was looking at, you'd be at about $500,000. Think about how nice a $500,000 home, in WNY would be, if it were 3000 square feet. A quick search finds a few in Clarence, Orchard Park, etc. Given the choice between a full size home with every bell and whistle, or a couple of apartments next sandwiched between a couple other buildings, which would you choose?

This block can and should get redeveloped as a single project. The code issues of egress to convert these into residential properties are too much for individual owners to come up with. The amount of space needed for hallways, elevators and stairs to provide that second exit per structure take up to much real estate for these thinner older properties to be profitable enough with our land values to entice redevelopment, hence why they have been vacant for 30 years.

Combining the buildings into a single project (not my normal ideal suggestion) is the best way to share these burdens. One can save a lot of money to create a shared sprinkler system, and fire egress along the backs of all these buildings on the northern half of the block. The only way to do it though is for all properties to be in it together

There is a study with some renderings of the potential could be, I would suggest anyone interested in learning more about this block, its history and its future to check it out. It was done with the help of many of the existing owners, BuffaloPlace Mr. Zemski (downtown living committee?), the Urban Design Project and probably more.

here is the link 500 Block Redevelopment Proposal

This is in no way a flip. These guys had every intention of completing this project and put a good deal of time and money into it (hence the increase in price). If you could have seen what this place looked like befiore they cleaned it out compared to now, it would be hard to see that it was the same building. Having a property for 3 years and pouring 10's of thousands of dollars into it does not constitute a flip.

LivingForge - I fell into that "condo trap" also. Realize that even a 2 unit condo conversion costs $25,000 minimum. It's not the legal bill either; New York State charges amazing amounts to review, approve and file the documents.

Maybe we need a distinction between intentional & unintentional flip? If they've sunk $100K into the building I'm assuming that must be covering the initial purchase price too. If not, then that is a huge chunk of money to put into a project (even if they're novices) w/o really having a plan/desire to see it through. Regardless, this area is pretty sad but you can sense the tremendous potential.

We need to lose the term 'flip' all together. I've posted many times that the idea of exchanging property for a profit should be praised, not harpooned as it is here. This specific case is as far from a 'flip' as you can get. By the time all is said and done, these people will have lost plenty. God forbid somebody buys a property, only to have an illness in the family, and a need to turn it over sooner than expected. I can hear you guys now..."so what your wifes got a little cancer.... you'll need to stay with this project... no flipping in our city". As I've said before, make the barriers to investment high enough, and you'll only drive potential investors to areas where they can get the same return, for much less hassle. The mention that these people are 'flipping' only goes to show that investors in this city are behind the eight ball before they even get started.

My feeling is that if someone turns around trying to sell a property for three, four, or more times the original investment & they find a sucker to buy it, so be it. If one fails to do any research on a property then that would be their loss. Regarding the comment on someone having "a little cancer" I think you may be reading a little more into the comments then they warrant. Then again, you do have quite the flair for absurd exaggerations.

In a city with a growing downtown/ well maintained downtown/ or much money in the area - we would probably not see this building going for less than a house in the City.

Blame our elected officials - I do

Then again not sure if my statement above came out the way I wanted.

What about chess sets made of cheese, you can eat the pcs after they are won, and once you and your challenger are done playing you can share in eating the board.

Jstraubinger,

“…Also, does anyone know how the gentlemen who owns the "Big Blue" at 165 Delaware [[153 Delaware Avenue, across from New Era Cap http://www.buffalorising.com/story/howard_scouts_out_153_delaware ]] coming along with his project?”

Thanks for asking about Big Blue. It is proceeding slow and steady, enjoyable rather than burdensome. I have been doing most of the work myself on weekends. I haven’t made any expensive mistakes or physically injured myself, so life is good at 153.

Of course like everywhere, the neighbors in my cul-de-sac are a bunch of show-offs and they constantly attempt to one-up me with their own home improvement projects. The Dulski’s are doing high-wire acts and re-facing their entire place - imitating my previous blue theme. The Courthouse’s are putting up a new-build. The New-Era’s are settled into their new home and are constantly throwing parties. The Brown’s are the requisite neighborhood busybodies – always wanting to know what everybody is doing. However, Bashar is a good neighbor because he’s down to earth and doesn’t try and make me look bad. He moves his home improvements forward more like I do – when it’s convenient.

Howard

Bloviator, I nearly went from LOL to ROFL reading your comment. The Buffalo Tours docent training class went by Big Blue a couple of Saturdays ago, and several of the group were asking about the house and its owner. With the recent demo of the Balcom-Chandler House, your place is about all that's left of the former grand residential district on and near Niagara Square, and folks are quite pleased that it's in good hands. If you were to throw some work parties on the weekends to help with the fixup, I bet you'd get some takers - perhaps even one or two from RaChaCha...