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My wife and I, both early 30's, DINKS, and with great jobs, have piled a good lump some of cash to purchase something decent in the city. I've lived in NY my entire life and her from LI so we are fairly knowledgable in the real estate market here.
We've focused our search on area's where the age population is...as much as I hate to say it...dying out. We've found a few good buildings but when we come to review the board packages we find stipulations of you must have 2 times liquid assets of the purchase price or you must own liquid assets of 70% post sale of purchase price.
We find these clauses to be very amusing. If I could afford a 1.7 million dollar condo, I wouldn't be buying a 700k co-op with a 2 grand maintenance. I'm not sure how they expect some of these properties to get 'young blood' in them but then again maybe they are just hoping the Chinese come in and pay straight cash homey! A number have been from seller's trying to dump grandma's apt but can't due to these clauses.
Cash rules everything around me but some of those buildings are going to turn into ghost towns unless some of the stipulations change.
My first thought was that you are looking at some very exclusive buildings that have very strict boards. I would imagine that very few buildings have that kind of requirement in terms of assets. I could be wrong.
Most of these 'Old Guard' coops aren't looking for 'young blood', they are looking for younger shareholders with 'old money' assets. Still plenty of them in NYC.
Be interesting to see some of these listings, please share some links.
couldn't agree more
If you think about it though most NY metro area raised kids DO have some 'old money' assets but neither of us will have our parents back anything b/c we really don't need it. Guess that breaks the norm of the occupy movement mentality.
Mainly up in Yorkville so far we've seen this.
You discovered gold in Grandpatown?
This town is a lot tighter than you think. The buildings in question are coops with high net worth demands. Subsequently, the apartments sometimes trade at what would appear to be reasonable prices at great locations. The net worth demand is the catch. I hear you...like looking at an amazing 2br apartment on 5th Ave with park views for 2.25MM just to discover that you would have to have 2.5X the purchase value AFTER 50% down payment and all closing costs. To qualify for the purchase you would have to have a minimum of about 7MM. Plus the place needs a gut renovation. Tough to find a great deal on this island.
Parker post more please.
Straight Cash Homey - Randy Moss
Cash Rules Everything Around Me - Wu
That is why people try to stay clear of Coops IMO. For some the requirements are insanely absurd and great barriers to entry. I understand what they're trying to accomplish, but sometimes it is too much.
The good news is a lot of these baby boomers+ are going to start retiring, moving and dropping dead (it's life). New blood will be needed.
The good news is a lot of these baby boomers+ are going to start retiring, moving and dropping dead (it's life). New blood will be needed
you forgot, "and prices will continue to drop,"
Could not agree with you more.... from BOTH the owner and buyer perspective. There are some that will say "But those rules are one of the reasons NYC RE has survived so well" and I understand the need for vetting and ensuring the financial health of prospective buyers within reasonable bounds, and the obvious ways that this is hugely important but I also feel that there is alot of B.S. that goes on with these boards and a serious lack of transparency. Condo/Co-op boards have become.......... like a Mafia. The amount of corruption going on with them would boggle anyone's mind yet it will never be uncovered because too many people profit from it staying the way it is.
My fiance and I are the same age as you guys and will be looking to buy a new place soon. We are entrepreneurs with two very successful businesses who will probably not meet the requirements for half of the places we want because WHO WOULD except for a very narrow group of people who are already making NYC feel like a totally different place than it once was. In our current bldg, a huge majority of owners are 1. Widows 2.Heirs of estates/Trust funders 3. Real Estate Professionals 4. Investors
People think that the fact that properties are sitting so long or getting reduced in price is an indicator that the market is overpriced/headed toward a crash. But the other side to that coin is that there is an artificial blockade/bottleneck with Boards being huge roadblocks and for new buyers staring at a package of requirements that in many ways are absurd standards by any measure.In ANY other city in America they would be considered overly qualified but not by boards made up of people half of whom could not meet the same stringent standards were they applied to them today. And all that happens is Cash buyers come in and because they know how tight lenders are /crazy boards are, they are put in a position of strength and now can bargain a seller down.Great for those with piles of cash. Not so great for just about everyone else, including the city as a whole.
So many people are worried about whether the value of their properties will rise or fall in the next 5-10 years. I'm more worried at this point what the NYC my child will grow up in will look like, one that was rich with culture and creative people and community, a Utopia by no means for most, but a city where everyone had a place.
In ANY other city in America they would be considered overly qualified but not by boards made up of people half of whom could not meet the same stringent standards were they applied to them today.
SPOT ON......but greed is a terrible thing. This city could very well become like San Angeles from Demolition Man. Be well!
"My fiance and I are the same age as you guys and will be looking to buy a new place soon. We are entrepreneurs with two very successful businesses who will probably not meet the requirements for half of the places we want because WHO WOULD except for a very narrow group of people who are already making NYC feel like a totally different place than it once was. In our current bldg, a huge majority of owners are 1. Widows 2.Heirs of estates/Trust funders 3. Real Estate Professionals 4. Investors"
Once you've "arrived", you'll be more than welcome in those Old Guard buildings. Until then, you have yet to prove yourself.
Until then, this is why God invented Frank Gehry.
Prove ourselves? You are missing the point. The EXACT same building my mom & dad bought into 20 years ago would likely NOT have them were they looking to buy there today And HALF or more of the members of their board would not meet their OWN standard for new buyers were it applied to them now. Do you comprehend what I'm actually trying to illustrate here?
Both Co-Op and Condo Boards for a ton of buildings in the city are IMO awful, CORRUPT and the reason they continue on is because people like you think even addressing it is "whining".
But what should we expect from a VP OF A CO-OP BOARD?
"Do you comprehend what I'm actually trying to illustrate here?"
Yes. You are illustrating perfectly why the Old Guard buildings are trying to keep out whiny, self-important, and entitled types who have yet to prove their ability to maintain a certain level of financial wherewithal.
"But what should we expect from a VP OF A CO-OP BOARD?"
Good question. I'll ask one. I'm the PRESIDENT of my board.
I'm not sure how running 2 successful companies makes you 'entitled' NYCMatt? There are plenty of young 30's folks here in the city that have worked hard for their money and have consistant income for years that easily clears the debt/equity ratio requirements....angel sounds like one of them.
I guess we will always be young and stupid to the 'Old Guard' and you will always be old and confused to us.
This discussion is about LIQUID ASSETS.
My parents have never missed a mortgage, maintenance or tax payment, never defaulted on a loan, never been late on a payment, and have owned a 2/2 in Lincoln Square for 20+ years. They are CLEARLY healthy, GOOD, long term owners. But they did NOT have the liquid assets required by TODAYS standards(and still don't).
Apparently, your arrogant, self important, bully attitude has gotten you promoted to Board President. CONGRATULATIONS.
You are a POSTER CHILD for the kind of attitude that has become pervasive and represents all that is wrong with Manhattan Boards and you get so bent out of shape when anyone you deem beneath you dares to point it out. I am no Occupy Wall Streeter. I am no WHINER. I am the farthest thing from Self-Entitled. But I am also no one's bitch to let a***holes like you decide that you are not anything other than what you are.
angel9894-- this is why the Prices will continue to DROP! especially for coops.
The people in the Coops wouldn't be able to qualify for thier own building.. they are tryig to sell but can't get the prices they expect!
No one goes there anymore it's too crowded.. haahha
Almost all co-ops were built or converted more than 20 years ago, so of course the owners bought in various markets and might not meet current requirements. Beyond that, you can't assume anything.
Six of my nine board members bought in the last several years. Then there're two who bought at conversion, and the sponsor. From what I can tell from googling, etc., the two old-timers have more money than the others.
All co-op owners know they can increase the value of their own apartments by adopting condo-like rules and letting anybody buy who can rustle up the immediate cash required.
Going by how few co-ops actually do that, it's safe to say they're happy with things as they are: co-op buyers as a group want to spend less of their money directly on housing than condo owners as a group.
Just pick your group and try not to want it both ways.
would love to see how current coop equity owners stand up to applying coop purchasers.
To pull back a moment from the angel vs. Matt bit, I think sma is right about the depth of the buyer pool.
I have a listing at 50 SPS, and the board hasn't stated asset requirements, but it's a 50% down building so that tells you something.
We are committed to Fair Housing, and welcome all financially qualified prospective buyers, and so far, we have a seen a very nice "mix": Young couples with two incomes/parents transferring wealth to their kids in the city/empty nesters who want to reinvest the proceeds from the sale of a larger house.
I think rumors about the death of this kind of building might be a little exaggerated.
DG Neary Realty
your listing at 50sps is too rich.. look were 5c sold look were 2c is listed look were 4l sold, 12c ITS TOO RICH!!!!!
IT FACES A WALL there are no views stop kidding yourself
you are paying someone to push an elevator button for you...and the elevator opeerator probably can qualify for the apartment when the px gets to market value..lol
Angel, get back to us when you actually have some savings and a track record. That's how it works in the grown-up buildings.
Until then, this is why God created rentals.
50 SPS is one of the buildings that required 2x liquid assets. I think that appears to be the norm in that area.
chances are NYCMatt would not qualify for his own coop either. This is the case for 75% of coop owners. So they would only sell after death or if moving outside of NYC. Otherewise they would not be able to buy after selling (condos would be too expensive given condo coop price delta).
JButton, I'd be a cash buyer, as I don't believe in mortgages anymore.
"HALF or more of the members of their board would not meet their OWN standard for new buyers were it applied to them now."
People always say this, or something similar, but I'm not sure how anybody would know this. I'm a shareholder in a co-op, and indeed I went through the Board approval process, but I seriously have *no idea* if any members of the Board could or could not meet their own approval at another point in time. Nor do I care.
This seems to be a real hot button issue on this forum, and I'm not sure I understand why.
Angel why talk to Matt? He can't even hold a steady job and what he does have he needs the protection of four unions. 4 unions. Talk about lacking self sufficiency and motivation.
Would that be something, if coops adopted criteria that mostly/broadly are met by current owners. How low would the standards be then.
Current coops may have enough life in them to hold on to such stringent rules, but at some point there won't be Enough buyers who qualify and coop boards that hold their ground will find that prices will drop materially until they ease up. But that may not be for another 10-15 years so its a story to watch from afar.
Parker, consider this - if the coop's requirements are so onerous, it would affect your ability to sell. So why consider living there?
There are plenty of coops around that don't require 50% and an extraordinary amount of liquid assets. When I was looking a few years ago, most buildings I saw required 20% and at most, and 1 or 1.5 years worth of mortgage & maintenance in the bank.
Coop is short for cooperative which is an autonomous association of persons who voluntarily cooperate for their mutual social, economic, and cultural benefit, in this case, as it applies to housing. It's a private organization that makes rules based on the mutually agreeed upon needs of that very group. It's a shame that individual coop purchase policies are not in the public domain. It would save a lot of buyers time and headaches.
Parker. have you considered buying a condo instead?
Don't be so sure that those who bought at conversion or yrs ago don't meet today's standards. For instance, those who bought at conversion in the 80s may have bought for 100k to 200k, so they would only have needed 200k to 400k in liquid assets to qualify. Those same apartments may easily be worth 500k to 1m today, requiring liquid assets of 1m to 2m today. The old-timers are typically carrying far less leverage.
What REMom said.
Let me use my building as an example. The liquid assets requirement is not as onerous as those discussed above, but the max leverage is well below 80% and the board is in general conservative on buyer financial standing. It would be harder to pass this board than it would be to get financing for a similarly priced condo for sure. So let's call it restrictive-lite. Anyway, taking one line as an example, there are owners who paid in the $75k area at or shortly after conversion ~30 years ago. That line is now worth $1.5mm-ish, or ~20x. Not to mention that the $40-50k mortgage from 30 years ago is likely long since paid off. Holding such an owner, whose sole monthly housing-related financial obligation is maintenance, to the same standard as a new buyer with a $1mm mortgage seems odd to say the least. Why, other that jealousy and spite, would anyone even raise this or suggest that it was relevant?
sitter, my understanding is that we are talking about higher end coops, the ones that have 50% financing and 1-3x coverage after the sale. so following your example, that person would have have 50% mortgage, and have 750k left over which would not be enough to qualify. In normal coops (25% down and 1-2 year of costs in the bank) you are right they would qualify.
an additional quesiton is income - most of the old timers have assets but no income. based on what some have said that would not be enough to qualify.
> . Why, other that jealousy and spite, would anyone even raise this or suggest that it was relevant?
That was a point repeatedly made by w67. Are you saying he was the jealous or spiteful type?
Excellent point REMom. When the long time shareholders purchased they very likely met the same standards. As in - if they paid less than a million in the 80s for their apartment, they were likely worth at least 2 million then. If there is no financing, or a mortgage has been paid off all that is required is the ability to pay the maintenance and any assessments.
In the past, purchasers of upper end real estate were generally worth more than the price of their apartment. It is only recently that people have started to heavily finance the purchases of more expensive real estate. I think you will find that the long time shareholders in these buildings were fiscally prudent people who did not go out on a limb to buy their apartments.
Boards want people who will be able to pay their maintenance, do their renovation, pay their children's tuition, pay their share of the new elevator or unexpected major facade pointing, etc. The requirements are to ensure that if a shareholder has a reversal - loss of job, bad investment -whatever - that their issues will not impact their neighbors. It is not snobbery or prejudice - it is caution and prudence.
A great thread would be: "Coop Liquid Assets Demand"....simple list of coops and their known fiscal demands for new ownership.
We made a list of land lease buildings
We made a list of buildings with pools (kinda liquid asset)
We need a list of coops and their $$$ demands.
Anyone care to take charge?
JB - I think you missed my point. In the $75k purchase price example, the buyers way back in the day needed $37.5k down in a 50% financing building and 1-3x a $75k purchase price, or $150-225k left over, assuming that the same standards applied. Your 750k is 10x, so I'm not sure where that comes from.
On the assets vs. income point and possibly not qualifying today, granted. It seems to me that this is only relevant if the "some" (as in "some have said") are proposing than tenant shareholders should have to maintain financial standards consistent with today's real estate prices. Or what - be evicted? Forced to sell to a buyer of greater means? I doubt that this is what the "some" are suggesting. Which brings me back to my view that the real reason that people harp on the point that some old timers could not pass the board today (an indisputable statement) is spite and jealousy.
lol I am so glad I own a house.
The point is that the coop imposes these standards to protect all other members from financial burden from one or more members (a) not being able to pay shared costs/maintenance & assessments or (b) firesale due to other financial issues.
So if a current owner is considered solvent with $200k of excess liquidity, to not be a burden on the coop members (not worry about firesale or failure to miss maintenance), why would you expect a new owner would need many times that...
That being said, its not exactly dollar for dollar either. Risk to the coop on (b) is probably more related to purchase price / equity. So saying 50% down makes sense even though 50% down today is much higher than 50% down 20-30 years ago. Plus someone who put 50% down 20 years ago, has alot more equity than 50% today (unless they did a cash-out refinance).
On the other hand other than willing to go through foreclosure (because underwater), costs from an long term existing resident and a new one wouldn't expected to be any different. Same maintenance (for comparable apartments), same cost for food/tax/city life. So other financial stresses that might cause a need for a firesale is going to be in terms of today's money for both existing and new resident.
Saying someone has to move probably is not reasonable, but 70% of purchase price seems excessive... 2yrs of monthly might seem more reasonable and associative to risks/expenses.
Why are people trying to legislate what a private group should or should not be able to use as its criteria for its business decisions. If a pauper bought in 30 years ago and now wants only kings to be residents, then that's their decision. If no one bites them they can consider changing their criteria, and an outsider has no say.
I'm not sure why one would say "Let me give you some examples of situations that are NOT the situation being addressed in this thread and then say that you are spiteful and jealous."
That is ridiculous.
We are not discussing the average Co-Op and the scenario's you presented are not within the scope of what is being discussed here. And in fact, I was not even limiting my statements to Co-Ops but also Condo's some of which, including the one in which I live and own, have over the last decade evolved to behave nearly as badly as Co-Op Boards trying to apply the same rules/requirements/procedures, despite having little legal ground to do so.
No one ever suggested evicting people and no one is even begetting the people who live in these buildings, and to be dismissive and say "Spite and Jealousy" is once again, presumptive. This is specifically with regard to BOARDS who have NO over site, often incredibly invasive, bureaucratic procedures, no transparency, financial litmus tests that YES, many of them and others in the bldg would not currently pass and are often corrupt to boot.
We are talking about a specific group of buildings many or most of which are on the UWS/UES and those familiar with them know exactly what this discussion was actually about. I didn't want to get into further degenerating the conversation with Matt by saying that it was both stupid and presumptive for him to assume anything about, well me personally or someone LIKE me and how much money I may have. These bldgs tend to have some of the highest property taxes/common charges and yet often, you do not see that reflected in how well they are maintained.
Once again, this discussion was about a specific kind of group of people in specific kinds of buildings, both Co-Op and some Condo behaving like Co-Ops that have requirements now that they did NOT 20 years ago.
Case in point, my sister in laws parents bought in 1983 a place in one of these bldgs for 600K with 120k down and 200k in the bank, a 30 yr mortgage. Their son and his wife wanted to buy the same apartment on a lower floor last year and the board wanted them to put 50% down with 2 x sale price liquid after closing. Not 1-2 years worth of mortgage/maintenance. That is not what we are talking about.
Again, I and others I know are no Occupy Wall Streeters who are whining in our milk throwing fists in the air with secret jealousy and envy. Many of us even lived or have family and friends in some of these buildings. However that doesn't mean that we cannot ALSO feel some disgust for the way in which the people at the helm have decided to run them.
"This is specifically with regard to BOARDS who have NO over site, often incredibly invasive, bureaucratic procedures, no transparency, financial litmus tests that YES, many of them and others in the bldg would not currently pass and are often corrupt to boot."
"Once again, this discussion was about a specific kind of group of people in specific kinds of buildings, both Co-Op and some Condo behaving like Co-Ops that have requirements now that they did NOT 20 years ago."
Since the OP says nothing about any of the above, I think we can conclude that there is in fact a range of views about what this discussion was about. For example, others seem to think the discussion is about...
"My first thought was that you are looking at some very exclusive buildings that have very strict boards. I would imagine that very few buildings have that kind of requirement in terms of assets. I could be wrong." - in other words, much ado about not so much
"All co-op owners know they can increase the value of their own apartments by adopting condo-like rules and letting anybody buy who can rustle up the immediate cash required.
Just pick your group and try not to want it both ways." - in other words, people make their own decisions, which they have a right to do
This is such a funny thread.
It's like fighting with your wife about how she treated a boy friend 25 years ago (before you ever met her).
>It's like fighting with your wife about how she treated a boy friend 25 years ago (before you ever met her).
Spite and jealousy. Like your friend w67thstreet.