Seller Financing in Concourse, Bronx: Walk-Ups and Mixed-Use

Today's bank rate vs. a typical seller-finance rate

When a Concourse owner sells with financing, the owner becomes the lender. Most owners price that loan off what banks charge: homeowners typically ask about 2 percentage points more than the national average 30-year rate, with a 5-year balloon payment, or an extension if both sides agree to one in the contract. The numbers below update every week.

About Concourse

The Grand Concourse was laid out in the early 1900s as a broad boulevard modeled on the great avenues of Paris, and the blocks along it filled in during the 1920s and 1930s with apartment houses in Art Deco and Art Moderne styles. Much of its southern stretch is now protected as the Grand Concourse Historic District. Civic buildings anchor the area around East 161st Street, including the Bronx County Courthouse and Joyce Kilmer Park, with Yankee Stadium a short walk west and the Bronx Museum of the Arts at East 165th Street.

Away from the boulevard, the Concourse neighborhood is made up of side streets such as Walton Avenue, Gerard Avenue, Sheridan Avenue and Morris Avenue, lined with five- and six-story walk-ups and some larger elevator buildings. Jerome Avenue, under the elevated 4 train, has long been the area's auto repair and parts corridor, and a 2018 city rezoning opened much of it to new housing. Hostos Community College at East 149th Street and the courts near East 161st Street bring a steady weekday flow of people, and East 161st and East 167th Streets serve as local shopping streets.

Getting around: B, D and 4 at 161 St-Yankee Stadium; B and D at 167 St and 170 St; 2, 4 and 5 at 149 St-Grand Concourse; Metro-North at Yankees-E 153 St

What you will find for sale

• Art Deco and Art Moderne elevator apartment buildings from the 1920s and 1930s along the Grand Concourse, most operating as rentals or co-ops rather than buildings an individual buys whole.
• Five- and six-story pre-war walk-ups on the side streets west and east of the boulevard, often large enough to fall under rent stabilization.
• Smaller mixed-use buildings with stores below and two to four apartments above, found along East 161st Street, East 167th Street and Jerome Avenue.
• Commercial garages and auto shops on Jerome Avenue, some on lots that the 2018 rezoning made eligible for residential or mixed-use development.

Why seller financing fits Concourse

Much of what an individual buyer can afford near the Concourse is a small storefront building or a modest walk-up, and banks usually underwrite those as commercial loans with tougher down payment and income rules than a home mortgage. Buyers who run a business on the ground floor, or who are self-employed and show modest taxable income, often struggle to qualify. Older buildings with open HPD violations, boiler or facade problems, or vacant storefronts can stall the process further, even when the buyer has the cash to make repairs.

Many small-building owners on the side streets bought decades ago and have long since paid off their loans. Selling to a bank-financed buyer can take months, and the pool of qualified buyers for a mixed-use building with long-term tenants is narrow. Holding a note can produce steady monthly income for a retiring owner and may let the gain be recognized over several years. Heirs settling an estate sometimes prefer to sell to a tenant or a local business owner they already know, with terms drafted by a NY real estate attorney.

The 5 terms you will negotiate

Every owner-financed deal comes down to five numbers. Here is what each one means, what is typical in New York City right now, and how they work on an illustrative mixed-use building, store plus 3 apartments in Concourse.

How to buy owner-to-owner in Concourse

1. Find owners open to financing. Start with Concourse properties on the SellerFinanceNYC live map, where every listing is checked against ACRIS deed and mortgage records. Owners who have held a building for decades with no open mortgage are the most likely to carry a note.
2. Offer on all five terms at once. Price, down payment, rate, amortization and balloon trade off against each other. Put them in a short written term sheet so nothing gets lost.
3. Hire a New York real estate attorney. Your attorney drafts or reviews the contract of sale, the promissory note and the mortgage, and confirms the seller has no existing loan with a due-on-sale clause. See our guide to finding an attorney.
4. Do local due diligence. In Concourse, check:
   • Buildings in the Grand Concourse Historic District need Landmarks Preservation Commission approval for exterior changes, including windows, storefronts and signage.
   • Many boulevard apartment buildings are co-ops, whose boards approve every buyer and may not allow seller financing at all; read the proprietary lease and house rules before negotiating.
   • Jerome Avenue properties with a past as gas stations or auto repair shops may need a Phase I environmental assessment and, in some cases, soil testing.
   • Most side-street walk-ups are large enough to contain rent-stabilized apartments; get the DHCR rent history so you know what each unit can legally charge.
5. Close like a normal sale. The deed transfers to you, you sign the note, and the seller's mortgage is recorded with the City Register. Buy title insurance, and consider a loan servicing company to collect payments and escrow taxes and insurance.
6. Plan the balloon from day one. Use the five years to build a payment record, fix up the building and document income so you can refinance well before the balloon is due.

Questions buyers ask about Concourse