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should i even consider a ( completely to be gutted) unit in a co op that has only a $ 10,000.00 reserve?
It isn't possible to answer that. How many units? Why are reserves so low? Does price reflect whatever the financial circumstances of the coop itself? What is the overall financial health of the building--that is, what do the financial statements reveal? There are a lot of questions. It is highly unusual to have such low reserves--even for a relatively small coop. It could mean that the maintenance is woefully too low and that needs to be figured into the price... Can you provide a little more info for more informed responses?
not that involved yet building has about 12 units
1) Were there any recent capital improvements? (My building's reserves once dipped as low as $17k after a big capital improvement that went over budget)
2) What is the current cash flow? Is anything being put into reserves?
3) Is the sponsor still involved? If so, how many units? Any rent-controlled units?
4) Does the building have an underlying mortgage? If so, what are the terms?
Some small buildings, particularly those with a lot of "old-timers" and no underlying mortgage (and thus less restrictions), run things fairly tight. I know of buildings that have close to $0 in reserves and fund everything through assessments, though these are more typically four to ten units.
Some price discount should be expected in this situation because any lawyer worth his fee is going to advise clients that they're buying into an unpredictable situation.
If you want to move forward with this anyway, it will be critical to get a thorough inspection of the entire building to understand what you're in for, as any kind of repair will involve an assessment.
it's the best move to spend all reserves and start deadbeat on city taxes, no one dare to foreclose a building, and at the end you will receive a nice deal of writing down a lot of debt
really feel sad for those sincere buildings (not the UES ones) who manage themselves well and save a lot of reserves. the crooks are printing tons of money and washing out their savings
I could see a small bldg not keeping anything in reserves if everyone is comfortable that co-owners can cough up $ when needed for repairs rather than tying up $ in a reserve. I think $10k for a bldg with 12 units is too low.
you should check if they have a line of credit available to them. without it, it's just too low unless it just got depleted and they are putting money into it on monthly basis.
Are you looking in Jackson Heights? It's not a big deal because all of them do it. When something needs to be fixed they just assess everyone for it at one time. Expect 1-3 additional monthly payments a year. That shouldn't even be your biggest concern, in small coops you need to do a lot of work. Most people there are sick of hiring contractors and doing the leg work for repairs, so your turn is probably gonna be really soon because you paid a lot and probably care more than someone that's been there 50 years.