The 19 Riverwalk townhouses that went into foreclosure will be turned into rental units before the end of the year.
Englewood-based Real Estate Equities Group acquired the 19 townhouses for $111,842 each, according to property records, which works out to a total of roughly $2,124,998.
Greg Van Cleef of Real Estate Equities Group said renovations to the existing townhouses should be completed by Dec. 15. One unit was completed prior to acquisition but others only had rough work done, with plywood floors and Sheetrock. Renovations will include granite counter tops and other amenities.
Rents will range from $2,250 to $3,000, according to Van Cleef. The 19 units are two-bedrooms with a den but some have garages while others have lofts. The foreclosed units range from 1,350 to 1,745 square feet. Tax assessments range from $151,000 (one unit) to $179,300 (three units), with property taxes from a low of $9,131 to highs of $10,842. The 19 units have a total tax assessment of $3.2 million, with an average assessment of $168,437, yielding an average property tax bill of $10,186. Eight are located on Genovese Lane, another five on Hancock Street, and three each on Danchetz Court and Barnhardt Lane.
Real Estate Equities Group specializes in apartment rentals and this is their first property in Rahway, attracted by the proximity to downtown and the train station, according to Van Cleef.
More than half of the owner-occupied Riverwalk units have successfully appealed their tax assessments in recent years (about 24 in 2011 and eight in 2012). Collectively, the 86 Riverwalk units had a tax assessment of $14.4 million, yielding almost $825,000 in property taxes before appeals. The overall assessments have since dropped by 5 percent, to a total $13.6 million. About 30 units that sold have not appealed their tax assessments.
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The average sale price for the 68 Riverwalk units sold by the original developer was about $444,000, an aggregate sum of nearly $32 million, according to my calculations. Fewer than 10 units sold a second time, and many at significantly lower prices.
Bank Of America foreclosed on remaining unsold Riverwalk units in late 2009. Now-defunct Diversified Communities constructed a total of 86 townhomes as part of the Essex Street-area development, with many selling for $400,000 and $500,000 during the housing boom around 2006 and 2007, but 19 went unsold before the developer skipped town. The $5.255-million Sheriff’s Sale on the 19 unsold units took place Aug. 15, 2012 and was acquired by VFC Properties in Waco, Texas, a part of FirstCity Financial Corporation, which is dedicated primarily to “distressed asset acquisitions and special situations investments.” This was the first sale after the foreclosure.
