Love thy neighbor then buy their apartment

It can take years — sometimes decades — but New Yorkers looking to trade up can sometimes do just that by buying the apartment next door.

Combined units represent only a fraction of the market, around 2 percent to 5 percent of sales in the city, according to Miller Samuel Real Estate. But with a dose of luck, they do happen regularly, as the New York Times reported.

“I’ve heard of lots of people who have knocked on the door next door to say, ‘By the way, when and if you’re in the mood to sell, please come to me,’” said real estate attorney Steven Sladkus. Sometimes, combining units can be more cost effective than trading up for a new and larger unit. Other times, sellers charge a premium because they know they can.

That was the case with Michael Faillace, who bought a 1,100-square-foot apartment for $184,000 in 1992, and then waited 25 years to buy his neighbor’s apartment on East 86th Street.

In 1999, Faillace passed on an opportunity to buy the apartment next door for $160,000 and regretted the decision for years. In 2004, he was outbid on the adjacent unit and claims he immediately began nagging the new owner to sell. In 2017, after the apartment was appraised for $800,000, the neighbor said he’d sell — for $990,000. Faillace and his wife, Soraya, bit the bullet and closed in January 2018.

The process of combining two units (i.e., knocking down a wall) can cost around $20,000. But issues like uneven ceiling heights or load bearing walls can creep up and the extra kitchen also needs to be excised.

“Anything is possible if you have enough money,” said Don Friedman, president of Manhattan-based Old Structures Engineering. “But most people aren’t going to throw $1 million at combining two 800-square-foot apartments.” [NYT] – E.B. Solomont