How will this work?

63 Maple, that new construction built below road grade across from the Second Congregational Church, has been rented for $13,000 per month. It was asking $4.4 million when the owner/builder gave up, down from an original price of $5.1. $13,000 pays the interest on what – $2,500,000? Somewhere around there. Assuming a market value of $4 million, taxes should run about $2,000 per month, so the builder has $11,000 to cover her debt. That might work, I suppose, but I’m guessing she’ll be taking a loss every month this place is rented. If the market doesn’t soar in the next 12 months, I don’t see how this is going to help her.

4 Comments

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4 responses to “How will this work?

  1. Old Greenwich Builder

    Chris – I am sure she (builder) is cash flow negative on this property with the $13K rent — probably 3-4K or so a month, assuming she has a decent mortgage rate.

  2. kidding really?

    You refer to the builder as a woman… might I guess her name is Polyanna?

  3. Anonymous

    “I don’t see how this is going to help her.”

    Something is better than nothing. No?

  4. duff

    I’m sure CF’s point being that after the tenants lease is up and it’s put back on the market for sale, it’s no longer a “new house”. Therefore, reduces its value and marketability further.

    On the other hand, if the tenants are potential buyers and the house stands the test of constant scrutiny then this could just be a delayed closing while receiving 13k a month for the wait.