Tenant Maritza Ostolaza outside her first-floor apartment: “They were interested in money. They were not interested in us.”
Tenants of a three-family “lemon” of a house on Liberty Street are wondering how two landlords managed to walk away with $180,000 by double-selling a property that they say remains a dump.
The property in question is at 50 Liberty St. It’s a three-and-a-quarter-story, three-family house tucked away on a side street near Trowbridge Square in the Hill.
In just six days, the property sold three times through investors’ limited-liability corporations (LLCs), with two flippers marking up the price by tens of thousands of dollars each time. Some tenants say and building permit records show that no new repairs have resulted from those recent flips. At least, not yet.
According to the city land records database, on Sept. 8, Connecticut Homes R Us LLC bought the property for $124,750 from Theodore Stelmaszczyk.
On Sept. 9, Connecticut Homes R Us LLC sold the property to JSA Realty LLC for $238,000 — a $113,250 markup on the previous day’s sale.
And on Sept. 13, JSA Realty LLC sold that same Liberty Street property to Keter 2 LLC for $310,000 — a full $72,000 more than the property had been bought for four days prior.
The city last appraised the three-family house as worth $121,600.
That’s a lot of LLCs to wade through …
Who exactly bought and sold and bought and sold the house, again? And what do tenants have to say about living in the property today?
Flip #1: Professional Flipper Pockets $113K
Thomas Breen photo
The three-family house at 50 Liberty St. (center).
Connecticut Homes R Us LLC’s William Hawthorn.
Connecticut Homes R Us LLC, which netted $113,000 between buying the property on Sept. 8 and selling it on Sept. 9, is a holding company controlled by Wallingford-based property manager and professional house flipper William Hawthorn.
Hawthorn told the Independent that he has been 50 Liberty St.‘s property manager for the past three years.
He said he has handled the day-to-day operations of the rental property ever since the previous landlord, Stelmaszczyk, moved to Florida but still wanted to keep the property in his name.
Hawthorn said he put the house under a “master lease option contract” during his three years as property manager. He then executed that option once he had a second buyer lined up.
Thus the “dry” closing that makes it look in the land records like Hawthorn was involved with this property for only a day. While he legally owned it for only one day, he said, he managed the property for three years.
Hawthorn was asked what value he added to the property before flipping it at nearly double its appraised value. The city building permit online database has no records of any recent, permitted renovation work taking place at 50 Liberty.
Hawthorn said he has spent roughly $5,000 this year alone repairing damages caused by the building’s tenants. He did not describe what those repairs consisted of.
“The tenants still owe me many months rent, and of course are going to talk bad about me,” he added.
He also said that he had only one housing code violation during his time managing the property, “and it was fixed in 24 hours. The town had no complaints after multiple inspections.” The city land records database shows no publicly recorded records of any housing code violations at 50 Liberty St. in well over a decade.
“The company that bought it has many properties in the area,” Hawthorn said about the first recent flip, “and will do a much better job of running it than I did.”
Hawthorn runs a company called Flipping Houses for Rookies. He told the Independent that he has been in this line of work for over 20 years, and has done “hundreds of deals like this type of transaction.”
Flip #2: Repairs Promised
JSA Realty LLC, which pocketed $72,000 between buying the property on Sept. 9 and selling it on Sept. 13, is a holding company controlled by local landlord Shneor Edelkopf and Ariel Mangami of Teaneck, N.J.
Edelkopf told the Independent that his flip of 50 Liberty St. follows the same script as his recent flip of a rundown two-family house on Newhall Street.
Just as in the Newhallville flip, Edelkopf said, he plans to stick around as the Liberty Street building’s property manager, even though he no longer legally owns the property.
And just as in the Newhallville flip, he promised, he plans to renovate the rental property now that it’s under new ownership.
What exactly does he plan to fix?
“Everything that’s needed,” Edelkopf said.
He said that Abraham Taichman, the New York-based landlord who bought 50 Liberty St. on the property’s second recent flip, will foot the bill for whatever building fixes are made.
Tenants: House Still A “Lemon”
To 50 Liberty St. tenant Maritza Ostoloza, the ballooning profits from her rental home’s recent double flip have not yet made themselves manifest for the people who actually live in the building.
She and her son, who declined to give his name for this story, both criticized the house as a “lemon.”
They said the beat-up property has seen little in the way of repairs, even as it is apparently enriching middle-men investors. They said they’ve had nothing but trouble with old floors, old ceilings, old pipes, old electrical outlets.
“They were interested in money,” Ostoloza said about the flippers. “They’re not interested in us.”
When asked about tenant criticisms, Hawthorn said some of the tenants at 50 Liberty are behind on rent, and some have caused thousands of dollars worth of damage to the property.
He also described Ostolaza as “the main problem” among tenants at the building.
Ostoloza’s son said that the recent skyrocketing prices of his family’s rental home is not a one-off on the block.
Sitting on 50 Liberty St.‘s front porch, a cigarette in hand, he turned to a friend standing by the curb.
Remember when someone came by offering $300,000 for that house next door? he asked, pointing to another three-family house. Looks like this is becoming a trend.
See below for previous stories about recent property flips.
• Bassett Blight Flipper Pockets Quick $148K
• Newhall Flipper Promises Property Fix-Up
• Flip Enriches Middleman, Burns Tenants
• Do-Nothing Flipper Pockets Quick $80K
See below for a full list of recent property sales.
New Haven city land records database
Recent local property transactions.
The Fed is printing money and repressing interest rates, so money seeks riskier investments like real estate. There is just too much money about today for the quantity of goods available, so we have price increases. Note, if the tenants actually just want their homes repaired rather than an excuse to not pay rent, they can go to housing court and ask to start having their rent money put in escrow until repairs are made. Of course, those not bound by a lease may leave at the end of any month without penalty if they think they can get a better deal elsewhere.