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East New York and Bed-Stuy Lead Brooklyn in House Flipping, Report Says

 East New York and Bedford-Stuyvesant had more houses flipped than any other area in Brooklyn in 2015, according to a new report.
East New York and Bedford-Stuyvesant had more houses flipped than any other area in Brooklyn in 2015, according to a new report.
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DNAinfo/Camille Bautista

BROOKLYN — East New York and Bedford-Stuyvesant had more houses flipped than any other area in Brooklyn in 2015, according to a new report.

In the study, "flipping" is defined as people buying and selling a property within a 12-month period and selling at a higher price, according to Leo Goldberg, senior policy associate with The Center for NYC Neighborhoods.

The center's analysis found that East New York had the most flips in the city with 94 properties, followed by South Jamaica in Queens, which had 91. In Brooklyn, Bed-Stuy came in second with 75 properties.

In one East New York building on Blake Avenue, the property was first sold in February 2014 for $145,183, then re-sold a year later for $534,000 — a 268 percent profit, according to data from the Center.

The report released this week looked at one-to-four unit buildings in the city from 2003 to 2015 and found that speculation has become more profitable in recent years, with some investors seeing profits of up to 300 percent.

These smaller homes, while not rent-regulated, can provide affordable housing for New Yorkers, Goldberg said.

The process of flipping properties puts homes out of reach for working- and middle-class buyers, according to the report, and decreases the amount of affordable rental units available as new owners make renovations and increase rents.

Homeowners who may be in trouble with their mortgage often sell their homes to avoid foreclosure and, in East New York and Bedford-Stuyvesant, many residents have been subject to speculators door-knocking, cold-calling, or leaving letters on their steps.

Speculators often offer cash for the sale, locals say.

“There’s a great deal of mortgage distress and foreclosure in central and eastern Brooklyn,” Goldberg said.

“At the height of the housing crisis these were really the epicenters of foreclosure, as well as southeast Queens.”

People are also moving further east as they get priced out of areas like Crown Heights, according to real estate brokers.

Before selling, owners should know the value of their building, said Matt Cosentino, vice president of investment sales for brokerage firm TerraCRG.

The market is changing quickly in Brooklyn, he said, and if homeowners are unaware of what their property is worth, they’re “basically leaving a lot of money on the table” once their homes are flipped.

“It’s essential for any seller to have an extremely up-to-date evaluation from someone who really knows the area,” Cosentino said.

“If the property isn’t really being marketed, there’s always the risk of being flipped out there.”

The Center recommends policy changes that would promote affordable housing and deter flipping.

An anti-speculation tax would tax sales that occur in rapid succession at a higher rate than those that follow long periods of ownership, according to the report, and a citywide Cease-and-Desist Zone would protect homeowners from solicitation.