Mark O'Brien

$5.5M West Village townhouse, ~$6M of work, $17M target sale

Mark O'Brien bought 94 Bank Street, a 180-year-old landmarked West Village townhouse, for $5.5M, expects to put in close to $6M more, and plans to sell it for $17M. While he waits on permits he lives in it and stacks firewood by the fireplace.

“It's insane that a home that's going to sell for $17 million, you are stacking— that's not how they're going to use it.”

Time kills every deal: carrying costs during permit purgatory

After 2.5 years waiting on landmark permits (architects, engineers, soil-bearing tests, neighbor footing surveys), Mark says the real risk in restoration isn't the build. It's the cost of carrying the property while time drags on.

“It's the cost to carry it. It's in time. Time will kill every deal. And often it does.”

He got into real estate out of desperation, not a plan

With two and a half kids and a Greenwich, Connecticut fixer-upper he couldn't really afford, Mark took on a project over his head and had to make it work. He then borrowed against that house to buy another. He calls himself a big believer in leverage, but admits being overleveraged is a great way to go broke.

“I spoke to a guy about this recently and he was like, well, how did you— how did you get into real estate? Like, what was that thing that made you get into real estate? And I said, desperation. Like I had, I was freaking out. I had two and a half kids. I was living in Greenwich, Connecticut, in a house that I had no right.”

Brownstone flip math: buy for $1M, build for $1M, sell for $3M

Mark's rule of thumb for a restoration flip is that purchase and build each cost about a third of the exit price, which leaves roughly a third as profit. His first deal, $800K to buy plus about $800K to build, sold for around $2.3M in under a year. The next one made him $1M.

“So basically you buy for $1 million, build for $1 million, and sell for $3 million. So you make $1 million. So this house was $800,000. I built it for about $800,000, and I made a lot of mistakes. I mean, crazy.”

Steal thisBefore buying a fixer, check that purchase plus renovation comes to no more than two-thirds of a realistic sale price.

Sourcing off-market homes by pitching owners from the sidewalk

To find deals, Mark pushed his three kids in a stroller around the neighborhood, complimented older homeowners on their houses, left his number, and stuffed notes in mailboxes. He treated it as a numbers game and at one point ran four projects at once.

“I would go, I'd run with my kids in a stroller, 3 of them, and I'd see an old lady and I'd be like, I love your house. I got these, all these kids. Look at these kids. I'm trying, I'm always, I'm looking for something a little bit bigger. I live over on Rocky Point right now. There was something bigger. And this woman, Pat, is like, oh yeah, hi kids. And, you know, yeah, well, give me your number. And I give her a number, and I would do that, put it in mailboxes. I just— it was a numbers game.”

Steal thisWalk your target blocks, tell owners you love their house, leave your number, and repeat at volume. Off-market deals come from sheer reps.

The brownstone upgrade trio: roof, cellar, and a wider, skylit stair

Mark does the same three things on every restoration: he opens up the roof, finishes the cellar, and widens the staircase with a skylight bulkhead on top. Brownstones have no windows mid-floor and are notoriously dark in the middle, so this pulls light down through the house. He also exposes original brick and floors instead of covering them.

“so this 2 things that I do. I like to go onto the roof. I like to finish— or 3 things: the roof, the cellar, and I widen the staircase. So you can kind of tell that there's more of a gap because brownstones are notorious for being a little dark in the middle because there's no windows in the middle typically. So I widen the staircase and I put a lot of light and a bulkhead on the top.”

Steal thisWhen restoring a row house, fix its signature weakness first. For brownstones that's a dark core, so widen the stair and add a skylight.

Finish the cellar: below-grade space is 'free' square footage

Because floor area ratio (FAR) zoning limits don't count a below-grade basement, Mark finishes cellars into real living space to add sellable square footage without zoning penalty. In his Fort Greene project the garden level becomes a separate-entrance unit he expects to rent for about $5,000 a month or use as an in-law suite.

“Um, so I wanted to keep all that exposed, but I also think it's important to get as much usable space as you can. As much— this will be finished, and this is basically free square footage because, you know, in terms of FAR, yeah, you don't— floor area ratio, they don't count a basement because it's below grade.”

Steal thisCheck what your local FAR rules exclude, such as below-grade space, and turn that space into finished square footage.

$4.8M in, $6.2M out: about $500K a year on a 3-year Fort Greene flip

Mark paid $2.8M for a 4,500 sq ft Fort Greene brownstone and is putting in about $2M. At a $6.2M sale, the roughly $1.4M spread over about three years comes to around $500K a year, with the build funded out of his own pocket.

“$6.2 million, and that's over 3 years, right? So you'll make something like $500,000 a year.”

The Sam Score: money, machine, moat, then pride, people, freedom

Sam rates a business on two 30-point halves. Business covers money, machine (can it run without the owner?) and moat; lifestyle covers pride, people and freedom. Brownstone flipping scored 8/30 on business (lumpy income, owner-dependent, no moat beyond nerve and capital) and 21/30 on lifestyle, for 29 total.

“Okay, so I've divided this thing up by business and lifestyle because they're both important. We're gonna do money, machine, and moat. And first of all, I love Mark. I'm gonna hang out with Mark again. But in terms of money, this business was a pain in the butt, and I don't think it made that much money. I'm gonna give it a 3.”

Steal thisBefore starting a business, score it 1-10 on money, machine and moat, then on pride, people and freedom. Weigh the lifestyle half as heavily as the money half.