The sun. [volume] (New York [N.Y.]) 1833-1916, 1876-07-27
Vacant Lots and Brown stone Houses.

Vaula.
An immense and constantly increasing
amount OF capital is lying comparatively
idle IN this city. Most of 1t is in trust COM
panies and banks. For the greater part it
represents the accumulated surplus of our
wealthy people, who anSiousiy seek safe
and permanent Investments for moneys
which are freely offered on call ut from
two to two and u half per cent, the supply
at these rates being far greater than the
demand. The present high prices OF Gov
ernments, good State stocks, and trst-class
railway mortgages cannot be long main
tanned after the much looked-for revival
in trade sets in. There is very considera-
BILE margin for fall on all seven per cent
securities now selling above par, which
will most undoubtedly take place with
renewed business activity and brisk de
mand for money. People then will be able
TO do better with their money thnn % put
II in New York Central and Hudson River
hrsts at l21, Harlem firsts at 49,, Morris
and Essex hrsts at l1S, and so on through
out the list of first-class railway mortgages.
There is no interest which has suffered
more seriously during the prohacted
period OF stagnation from which we are
about to emerge than the real estate
interest IN this city. The decline in up
town building lots has been moro espe-
cially marked; it has been fatal to all
spectators operating on margins, while
those whose properties were unencum-
bered or only slightly mortgaged, find
themselves in very altered conditions OF
fortune, owing TO the great shrlnkage.
Ruinous sacrifices are submitted TO In
order 10 effect sales. Wherever great
sacrifices are made somebody must reap a
benefit. While holders OF brown stone
W9RftcMf NOT 'onity" p iTy 40 income but are
also heavy burden in the way of taxes.
assessments, and loss of interest, is fre-
quently obliged 10 sell at prices flfty per
cent. below what the land Immediately
opposite or directly alongside sold at
three years ago.
This has brought about very curious
state of things. II has stimulated building
and created n certain demand for choice
lots at low prices. To Illustrate let us say
q "tain brown stone house is for sale at
sao ooo. tha ,~ner paid $4,000 for the lot.
and built when mae III "nu iaoor were
one-third higher than now. JUST opposite
is n plot of lots which cost the present
owner. with interest, tnxes, and assess
ments, $4,000. He offers TO sell them AT
1880 per lot, thus making n clear loss of
sll.5O0 on each lot. They are bought by a
builder, who Immediately goes to work and
puts up row Of brown stone houses,
equally good in every respect with the
$4,000 house opposite, besides possessing
the advantage of being entirely new and
more modern.
Tho new houses have not cost at the out
side more than $4,000 apiece. They will
be finished and on the market within
eight months from the time the first brick
was laid; and they can be sold ut less than
$50 and realize handsome profit to the
builder. The owner of the $50 900 house
opposite must offer his old house mt even n
less price than the new 100000 houses, in
order 10 secure a customer. In a word the
owner OF vacant lots has submitted TO n
heavy loss in order to attract buyers
and this loss ultimately entails CORE
spending sacrifice on the part Of those
owners of adjacent improved property
Where they are in situation to hold on
and want for better times, which, sooner or
later are sure TO come, they can make
their minds perfectly easy, rs the building
up OF neichborhood must eventually i'm
prove all property in the vicinity, aud
hasten permanent rise in values.
1t will thus be seen that those builders
who are in situation to profit by the
present depression OF vacant lots and the
abnormal condition OF real estate, are
quite likely to reap handsome rewards.
There are In this market IA number of en- |
terprislng mon who are in n situation TO |
make small payment in cash. in order TO |
secure their lots; moreover, they have suf- |
hcient money and credit to enclose the |
buildings and put on the white cont of
plaster before requiring loan; and then |
a loan OF fifty per cent. on the value of |
house nnd lot combined is all they require.
These men generally address themselves |
to life insurance companies, and are made
to pay very heavy shaves in the way of
commissions. These loans are safe beyond
peradventure, when effected on basis OF
NIFTY per cent. on present exceptionally
low values.
We suggest to capitalists seeking good,
saie seven per cent investments for money
no" on calljn Wall street, that they put
Themselves in direct communication with
some lrst-class law firm doing a real estate
business commissioning them TO loan TO
builders of responsibility TO the extent Of
nifty per cent. OF the value of the property
improved, the loan to be made on the en-
closing and white plastering OF the build
ings. The builder would thus be able to get
a written agreement promising certain
loan on the accomplishment on his part of
certain conditions, such as completing tho
buildings to certain point, and Offering