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Brownstone Restoration Business

22:43 recording · EN · 2 speakers

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Brief overview

Mark O'Brien restores New York brownstones for thin margins: huge pride, modest money, a Sam score of 29.

  1. Permits, not construction, are the real costTwo and a half years of architects, engineers and soil bearing tests on Bank Street before work could start — "time will kill every deal."
  2. Leverage built the business and could break itMark borrowed against his own house to buy the next one and calls himself a big believer in other people's money, while admitting it's a great way to go broke.
  3. Great pride, thin moneySam rates pride a nine but the money a three: roughly $500,000 a year on the Fort Greene deal, and a bad year can lose money.
Executive Summary AI
  • Sam spends a day with Mark O'Brien, a brownstone restorer he found on Instagram, to open up his real numbers and decide whether he'd trade places with him.0:09
  • At 94 Bank Street, a 180-year-old West Village house, Mark says he paid five-five, is closer to six all-in, and expects to sell for 17, after two and a half years just waiting on landmark permits.3:05
  • Mark got into real estate out of desperation, over-leveraged with two and a half kids in Greenwich, Connecticut, on first deals where you buy for a million, build for a million and sell for three.9:17
  • The Fort Greene house is 4,500 square feet: 2.8 to buy, about 2 million to build, 6.2 on the sale over three years, roughly $500,000 a year, which Mark calls pretty slim.18:57
  • Sam scores the business 8 out of 30 (money 3, machine 3, moat 2) and the lifestyle 21 out of 30 (pride 9, people 7, freedom 5), for a total of 29.21:53
Key Quote
“So look, I usually buy things that have rats in the cellar and holes in the roof and water damage everywhere, mold and problems.”
— Mark O'Brien2:47
Key Quote
“What was that thing that made you get into real estate? And I said, desperation.”
— Mark O'Brien6:12
Key Quote
“I was freaking out. I had two and a half kids.”
— Mark O'Brien6:17