Buying in extremely small coop

Financial risk in a small co-op is a real consideration. You also have to consider that banks are more wary of small co-ops so you might have a problem getting a loan. But also, consider that co-ops in essence try to meld diverse living experiences which is always difficult. One problem tenant with a little power or too many shares can ruin your living experience. In a large co-op this is less of a problem because you can lobby a group of like minded people to your point of view in any particular issue. But in a small co-op, human dynamics work in a different way. Some people will want to avoid trouble because they have to live there and some will even vote against their own interests in the face of a bully.

We ended up in a lawsuit for the first time in our lives because of one a#$hole lawyer neighbor who lived to create problems. For 8 years we lived in peaceful co-existence with all of our neighbors (well, relatively speaking because no one really liked the lawyer) until we had a leak under our floor which was clearly covered in the proprietary lease. The a*^hole lawyer turned on us and we eventually ended up in court because no other neighbor was willing to stand up to him. In the meantime we lived for two years with a gaping hole in our floor because he got an injunction against fixing it. (don't ask - too complicated). The a(*hole lawyer's friend represented the building and in the deposition which should have been limited to the floor, asked extremely personal questions about our lives and every visitor who came to our apt. - they were literally spying on us. It was insane. By the time the suit was settled, the neighborly co-existence was destroyed. We wanted to move, but the vengeful a%&hole lawyer who was president of the board refused every buyer. Finally we had to threaten to sue when they turned down a buyer who was more qualified than anyone in the building. It was a horrifying experience. Had we sold in a downturn like this current one, we would have lost significant money.

I wouldn't ever live in a co-op building under 40 apts. When majority rules, you need to have a true majority. Plus, there will always be assessments for boilers, roof repairs, broken pipes. 10 units and under always means heavy assessments. If there are not a lot of reserves --Walk Away Now. Condos rule.

Small-building disadvantages apply equally to condos and co-ops. (Ditto for small-building advantages.)

If the building is self managed, you really have to watch he shareholder who is managing the building. If there is outside management, you can't pay enough to get qualified people , so you really have to watch who is managing the building.

If you are going to buy in a small Coop, make special note of "COOPERATIVE" and expect to be active, or..... else.

If money matters to you (that is, you don't have unlimited amounts of it), you are insane to get involved in a situation like this. Add to the expenses it takes to keep up two townhouses the lack of a historical record of board minutes. Two years? So whatever engineering issues existed 50, 40, 30, 20, 10, 5 years ago are lost to history, dependent upon some old-timer in the building, or rely upon notes taken by someone without fiduciary duties who owned the place in the past? ARE YOU CRAZY? On the other hand, if you have oodles of money and will use a much smaller % of your income and savings than most people to purchase this place, have at it. I can't imagine taking on a headache like this. Life is way too short.

kylewest, money matters to me a whole lot, and that's one of the reasons that drove me to this apartment in the first place. The price per square foot is almost half of the average in the neighborhood and, although I attribute that in good part to the fact that it's an old walk-up building with an inadequate amount of baths per apartment, I guess part of it may be due to the uncertain financials of the coop. That said, walk-ups are by definition small (6 stories high at most) and they've always seemed attractive to me because of the lower CC, but that may be a mirage due to what you say. Opinions?

"indadequate number of baths per apartment - does that mean that purchasers will be wanting to put in new baths? Totally probably overstressing the really old pipes in the building? purchasers will probably want a whole lot more electrical than currently exists - upgrading building systems is a very expensive proposition.

It would seem that all the above posters basically advised you to walk away, you just really don't want to hear it.

why would you ever buy a white elephant in this buyers market?

find a good investment without these issues--there are too many alternatioves to make concessions like this

take your time

apt23---what a scary story! Thank you for sharing this and educating us all.

Trompiloco--I know the feeling, because I'm an investor and I know what it feels like to find a property like that, one you really want that is clearly a bargain on some level, and to consider the risks....and really want it....

We don't know your age or what you do for a living. If your heart is saying you want to live there, AND you have a secure job of some kind--you're a physician, you're a tenured professor at a high salary (yeah they exist, I'm married to one), you have a nice net worth, you have family members who would happily loan/give you money in a pinch--then you might be able to absorb the financial risk that this thing sounds like it is.

But if you are not in that position--you're an artist or musician, you're a social worker, you're a teacher, you have family members who hit YOU up for loans--then you must realize that if you lose everything and then some, your standard of living is going to drop like a rock. And it will not be pleasant.

This is a risky investment. I have a pretty substantial net worth and I could buy that thing only while hyperventilating. How much are the reserves? Actually, the fact that there ARE reserves strikes me as a good sign, because sometimes buildings like this have nothing. I just dealt with one like that recently. However....

But if you must, do get it inspected BEFORE SIGNING by someone with a P.E. after his/her name--a Professional Engineer. Don't hire anyone else for this, you need structural expertise.

This sounds like Brooklyn or Queens. Or maybe Bronx. As far as the financials, yes your attorney should evaluate them but a broker with expertise in this would also be good to find, because it's free advice, why not get another opinion. But you need to find an agent/broker who knows how to research this stuff. Most brokers really know nothing about it, at least in my experience. Look for a broker who has investments and/or works with investors a lot.

And I really do agree with Ubottom--there are plenty of other things out there, why do this to yourself. Except that real estate isn't just about money, it's also about emotions.

{Manhattan real estate agent.}

Great post Fluter and I agree: OP's income stability is key. If the worst case scenario came about (capital improvements requiring large assessments, large maintenance increases, etc) and you'd still be A-OK floating the monthlies then I'd do it. If not, I'd reconsider because I think that kind of worrying about money will eat you alive.

Tromplico, I've been following your search for awhile -- if I were you I would do this if I had three months' mortgage and maintenance in reserve PLUS $50,000.

Remember that you are exposing yourself not just to the risk of building maintenance costs, but also the risk of default of one of your nine neighbors, so there's a chance that your "share" of costs increases suddenly. Also, your investment is never going to "take off" because there will also be a discount when you sell that you have to give to your buyer.

If you have that much cash post-closing I would consider it, though.

ali r.
{downtown broker}

I'm excited about this project too, now, but the downside looks steep indeed. Look at THAT long & hard. What if the roof needed to be replaced at the same time that the furnace went & the hot water, too. Do you have a sidewalk vault? THOSE can be expensive & you've already said that you don't have deep pockets. Also, consider your temperament; if you're not a diplomat, avoid this potentially sticky situation.

p.s. You've got 2 five-floor townhomes; where are the other 8 units? OY, & it's a walk-up?

Personally, I wouldn't touch this with a 10-ft pole. From what you describe it has HIGH RISK written all over it. IMO the co-op's far too small, and I wouldn't be comfortable with it being such a recent convert either. No track record. And the inadequate reserve is a great concern. Do you really want to be assessed heavily every time the boiler breaks or the roof needs work? Because that's what'll happen.

You should also think about resale. You really limit your pool of potential buyers with a brownstone walkup. Think about it--who would buy such a place? Young couples planning to have kids? No. Families with children? No. Older retirees? No.

Remember, even if it's bargain-priced, it's not worth it if it winds up becoming an albatross around your neck.

hey ph41, what's with the aggressive tone? I don't make my decisions based on 5 posts in a public forum discussion, one way or the other. I'm just asking and pondering. If you like to bully why don't your just call talk radio and scream and get screamed at, please.

I'll give people more food for thought. I currently live in subsidized NYU faculty housing but they won't upgrade us ever because my wife is not a big-shot professor, and the apartment is not big enough for the family. So we need a change, asap. NYU gives us money as an incentive to leave. We love the neighborhood where we've lived for 10 years and where we have tons of friends but it's one of the priciest ones in Manhattan, so walk-ups look like to only option to stay. Walking to work is also a valuable luxury, as is keeping your children in the same schools, with the same friends, etc. I'm assessing the risks.

The apartment in question is 1300 sqft (listed as 1500, of course). Reasonable maintenance for such an apt. in a doorman/elevator building, at $1.5 per listed sqft would be 2,250. This walk-up charges $1,200. If you really don't care for either doorman or elevator, that provides a 1,000 per month cushion to face any problems. On the other hand, even that surplus doesn't protect you from the kind of catastrophic problems that people here seem to relate to small coops. How likely are they? How much risk would you attribute because of that? Also, even if you don't care for doorman/elevator, if you live with permanent assessments of 500 per month or so, in this case you would be paying an effective CC charge of 1,700 per month for no services whatsoever.

Speaking of assessments: I've seen them even in the biggest coops, even in the cases where the maintenance charge is already high. Lincoln Towers comes to mind. The charge for 2bt/2br 1050 sqft apts. (listed as 1250 of course) is around 1600 to 2300, depending on terrace and floor. I've visited a few and I would say 2/3 of them had current assessments ranging anywhere from 100 to 200.

So, any more thoughts?

Hey Fluter, arlodog et al, thanks for the comments. I have a lot of thinking to do. Income stability is fine. My wife is a tenured professor and I'm a freelancer but in a field (Spanish court interpreting) that does nothing but grow, in which I've reached the top in terms of professional recognition and where I'm able to earn enough to buy this apartment comfortably working 3-4 days a week by choice, but having the possibility to work more if I wanted to.

Still, not thrilled with the risk, although the apt. is not a white elephant by any means. It's dirt-cheap for neighborhood. See my previous post.

Squid, I have 2 kids ages 5 and 3 months, and the 3 month-old is 90% percentile, so he weighs 17 pounds already. I'm gonna name a hernia after him. Still, I'm considering this walk-up because of low price, great neighborhood, etc. Willing to put up with the sacrifice and the chance of staying fit by mandate:) Still, the apparent low maintenance may not be, and may even be the opposite, and there's all the risks involved, but it isn't so black-and-white. Saying that almost nobody wants walk-ups is like saying that everybody wants shiny amenities-laden new devs, with minuscule bedrooms and living rooms, and huge open kitchens and lots of non-essential bathrooms with his-and-her sinks.

tromp, it is a risk. but it's a fairly common model in park slope, no? perhaps someone here knows an attorney who has handled a number of transactions in that area? i owned in a 20 unit building, but it was a condo that was more established than the situation you're seeing.

Tromp...I think you are right to do all the research, due dilligence getting expert opinions and in the end going with your gut. How much risk can you stomach and is the opportunity here worth it? About the walk up (and I am assuming you are considering the top floor unit, much less of a concern for first or second floor), I think resale is less of an issue because that neighborhood is likely to always attract the young and fit. Schlepping the accessories and daily needs of a growing family up and down can get real old real fast but you also get used it...
However, one additional factor to consider is the relationship your children have with their grandparents. If they are part of their day to day lives or if you love hosting holiday gatherings, a walk up may not be the best choice even at the the cost of having to leave "the hood" (5 year olds make new friends easily and you could probably find a elevator building in your price range in Murray Hill, East Village or other Manhattan areas with minimal commutes and good schools). True, right now your parents may be in their 60's and in better shape than you are but alas that phase doesn't last forever and the later part of the grandparent years may be a lot more physically challenging. Just something to think about.

lizyank, unfortunately both sets of grandparents live in South America, where both my wife and I am from.

okay not an issue for you..although entertaining children on those loooooong flights must be a challenge. On the other hand, I'm assuming your kids are being brought up to be bi-lingual which will give them a huge advantage in the 21st century regardless of what they choose to do.

Visitors are a consideration, regardless of the age; the abuelos NEVER visit?

drdrd, everything merits consideration. The grandparents are late 60s-early 70s right now and can do stairs for a good decade, hopefully. Later on, who knows what we'll do, but you cannot accommodate everything and everybody. The truth is, if you can't climb stairs I don't know if you should board a plane for a 8-plus hour flight either, so...

*** The a(*hole lawyer's friend represented the building and in the deposition which should have been limited to the floor, asked extremely personal questions about our lives and every visitor who came to our apt. - they were literally spying on us. It was insane ***

This is just an aside about bad attorney behavior in depositions. I've been hearing stories like this a lot lately. I understand that the state court system has a fairly new referee program, in which you can request a neutral to oversee the questioning when it gets so far afield that it's inappropriate. I wouldn't allow an attorney to do me like that in a depo. Others, of course, may not agree.

apt23, were you represented by an attorney? because you shouldn't have been treated like that. i've been trying to nag my husband into doing more of his pro bono work for people in situations like yours. NYC could use some more high level attorneys working in this area, and now that so many of them have so much time on their hands, it seems they could branch out a bit.

apt23 - I empathize with you because my own situation is much, much worse than what you went thru.

Trompiloco: something you wrote troubles me. No one here described "catostrophic problems." Roofs, boilers, sidewalk vaults all require maintenance at regular intervals in any building even under the best of circumstances. I also strongly disagree with whoever said to go with "your gut." This is potentially the most important financial decision/investment/expenditure you've ever made. It can have an impact on your retirement, immediate financial security, your ability to provide for the needs of your family now and in the future. This is the last type of decision that ought to be based on "gut." It should be based after weighing the advice of an independent financial advisor, after becoming an expert on the RE niche you are exploring (sounds like you've been doing your homework already on that front), and seriously considering NOT all that will probably go right, but by thinking about what you will do if it all goes wrong.

I hear the reasons you like this place. But person after person on here, some quite experienced and moderate, are telling you this property raises yellow and red flags. 8-10 units is tiny--especially for a 100 year old townhouse (is it older?). And no, many walkups are actually quite large complexes such at 85-87 Barrow Street with comprise 2 of 4 buildings that are a 6 story coop walkup in GV. There, risk is spread over a many, many dozens of units (150+?). Maintenance is low, buildings are well-kept, board is easy-going, and RISK IS NOMINAL.

I'll not keep weighing in on this. I'll just say this one more time as a person who is financially conservative, has been involved with NY real estate for 20 years, and who is in a somewhat easier financial position than you describe yourself as having: THIS IS A VERY HIGH RISK PURCHASE from what you describe. You have to ask yourself if and why you would subject yourself and your family to such risks. Liking a neighborhood and walking to work is not justification for what I perceive to be incredibly high financial risks associated with a 10 unit coop in two old buildings with no management or financial history.

kylewest, i agree with your post almost 100%, but i'm curious that there was no repsonse to my comment about Park Slope. where there are huge numbers of apartments in walk-ups that became coops.

i think the risk must be weighed. at any level.

Trompiloco: one thing you also have to look at is the income and expense statement very carefully. Very many small Coops don't raise mtc for years so they have low mtc fees, but those fees SHOULD be much higher, there's just no one willing to be the one to be the "bad guy". You also have to look back at more years of past financials, because you'll often see a couple of good years, then something blows up and they look horrible for a year or two, then go back to looking more normal again.

****Try to find out the mtc HISTORY. If they have raised the mtc 10% in the last 15 years, what does that tell you? You have to watch out if there are a bunch of people in the building who got their units for $30,000 and the current $1,200 mtc is a strain. Forget about what YOUR ability to pay a large assessment if something blows up, if your neighbors can't, the building is in real trouble. ****** NOTE: jut looked at the OP again and saw 2007 conversion so a bunch of stuff I'm pointing out in general for this type of Coop may not apply here**********

"Family" apartments with lots of stairs tend to be VERY hard to sell. The largest unit in my building is on the third and fourth floors and has been on and off the market for about 5 or 6 years. Before that, the previous owner took 2 or 3 years and a 60% price reduction to sell (in a rising market - sold in 1999). In other words, this unit has been on the market for sale for more than 50% of the time over the last 13 years or so. You may be willing to truck 2 strollers up 3 flights of stairs, but not too many other people have been willing to. To echo UBottom, this may be a white elephant: I'd be much more comfortable if it were a 1 BR plus guestroom or the like.

30yrs: theOP said the coop conversion is only 2 yrs old, so while I agree with all you said, he has all of only 2 yrs worth of history to look at.

a) see the note at the end of the 3rd graph
b) there may only be 2 years of Coop financials, but there's at least a third and maybe fourth in the schedule B.

make that second paragraph

Apartments in this type of building often do not appreciate the same way the rest of the market does in a boom. Take a look at 136 & 140 West 16th Street's history.

AR, I didn't comment about Park Slope because I know nothing about it, although the reference was interesting vis-a-vis getting some input on similar situations.

kylewest, I give your input a lot of consideration, believe me. My gut is not involved in this decision. "Catastrophic" was a poor choice of words. One thing I plan to ask my architect when we tour the place is how much would things like the maintenance of Roofs, boilers, sidewalk vaults would cost, so that I get an idea of how much 1/10 of that would be.

30yrs. The units were purchased for the same, very low, insider price in 2007, I assume that by the long-time tenants of the bldg. I find it strange that all of them, regardless of condition or small differences in size or floor, are registered as having cost $400,000 each. I fear some of the tenants may be elderly, and that's one thing I wanted to inquire about.

kylewest, I checked 85-87 Barrow St and can report the following: that walk-up is within walking distance from the one I'm considering, the specific corner of Barrow+Hudson is obviously nicer. The list price of 85-87 Barrow is almost exactly twice as much per square feet. I mean, is something like 95% more expensive.

check out small discussion on 321 west 14th street and look at neighbor building 319.

The problem may also be that you will be the only one who has put some major money into the purchase, and has the income to support any major repairs necessary. Patrick McMullan (the society chronicler) would seem to be the one one made some real money on these buildings.

If the roof starts to leak, it may be very difficult to have your fellow owners agree to replace it, with money coming out of their pockets, when it is only you that is getting wet from the leaks.

"30yrs. The units were purchased for the same, very low, insider price in 2007, I assume that by the long-time tenants of the bldg. I find it strange that all of them, regardless of condition or small differences in size or floor, are registered as having cost $400,000 each. I fear some of the tenants may be elderly, and that's one thing I wanted to inquire about."

Since I don't know the building, i can't be sure, but this may be a case of a long term partnership that always ran "as if" it were a Coop, but never got around to converting, but having a certain number of tenants who wanted to sell and knowing that a Coop is MUCH more marketable than a share in a partnership building, they may have gone thru the exercise so that those who wanted to sell could get better dollars. If this is the case, that $400,000 may not be an actually number: it may be equity they already had. The reason they all sold for the same amount would be that they all had equal partnership interest in the building under the old arrangement and they wanted to have it stay that way (I know of at least one instance of an older woman who DIDN'T buy her 2 br Coop at a very attractive insider price because she felt it had not been allocated enough shares - @$#@#$^&*_!!!!!!). And since the purchase prices have to be in relation to the price, having the same share count means having the same price. but then again, if it was equity rather than cash, it doesn't really matter, does it?

Not, you may ask "Why would they use such a high number and pay more tax?" I'm not an expert on the IRS and NYS Tax codes, but my guess is someone got advice somewhere that if they put the numbers as too small, the may get questioned. In addition, I can see the trying to argue that they got their $250,000 exemption on the transfer from partnership to Coop, and then will get another one when they sell the Coop. (of course I'm making assumption on assumptions on assumptions at this point)

PS If this is in fact the case they have plenty of years of financials to look at,

30yrs - even if the above is correct, isn't it still true that anyone buying either of the two units for sale will have a much larger financial stake, yet will probably wind up being at odds with their neighbors over such things as maintenance costs, repairs, etc? All the upper west side apartment buildings turned coop, with units owned by longtime owners who bought at very low prices seem to have problems because the newer owners, buying at top dollar, have different expectations regarding those issues (as in, possibly the hallwsys really need repainting? The lobby looks decrepit? The elevators are really, really slow? etc. etc.

30 yrs., as always, thanks a lot.

ph41, my overriding goal is not to pay top dollar (which I don't have BTW) and, in that sense, I don't think I would have very high expectations and can put up with almost anything. But, then, there are cosmetic/appeal concerns and there are safety concerns.

Tromp - but they're asking $900/sf for the 4th floor, which really does sort of seem like top dollar. Even the 1st floor is asking over $600/sf.

And as I said, you really don't know the economic situation of your neighbors-to-be, who, for whatever the situation, bought for really low amounts. And that was even in the hot market of 2007. Really talking about maintenance/repair concerns.

And now, in the down market of 2009 someone is marketing these units for what seems to be pretty top dollar. You might be someone's savior/retirement package.

ph41, what building are you talking about? I haven't "confessed" which building I'm talking about, but those numbers don't match it.

Tromp -see my post above - matched the info you previously posted almost to the letter. Sorry if I was wrong, though my feeling about the prospective purchase remains the same.

Devil's advocate to the naysayers-

With risk, there is reward. This deal may have some level of uncertainty that you seem to have a level of comfort handling. If you purchase one of the new construction developments, you are 100% sure that you are overpaying. With this one, there is a possibility of a deal that you feel you can handle in the long term.

You should also consider how much the unit rents for, juggling current rental rates with the peak. The cost to own should fall somewhere in between.

tromp, to answer the original question, why not use 30yrs, or if he's not available someone he can recommend? what you need is someone who's been around the block quite a few times. you also need a superb PE, which someone in 30yrs position ought to be able to recommend, and the same thing goes for the attorney.

you need them all before you purchase, but i'd start with a good broker first.

just my two cents.

I absolutely wish you the very best & I can see the appeal but there are so many risks involved; please be sure you are looking at those with a gimlet eye - un buen ojo, we'd say in Spanish. You mentioned addressing these issues with your architect but you'll also want to have an engineer look at the place &, considering the investment cost, you might want more than one opinion. Caveat emptor, hermano.

tromp - sorry, if it's the building I'm thinking of, the 4th floor is asking $600 +/ sf, while the 1st floor is asking $900/sf. That may be why the 4th floor, even with the stairs, becomes extremely appealing.

Sabias palabras, drdrd. Same goes for AR, who seems to have some mind-reading abilities. I was just thinking of trying to contact 30yrs., who has come across as extremely knowledgeable and even-tempered in this discussion. Hey, 30yrs., is there anyway to contact you directly?

If you could get 30yrs to work with you, it would be a wonderful thing. I think he says that he tends to stay away from individual buyers but maybe if you could pique his interest ........

BTW, this tiny coop has a commercial tenant in the basement. I don't know how much they pay in monthly rent, but considering that the nominal maintenance for the 10 owners is small, the income from the tenant may have an impact on the total of money available to the bldg. Anyway, I don't know if that changes anybody's take on this.

Let me add my voice to the chorus suggesting 30 yrs., even if it requires begging since he doesn't work in the "residential" (as opposed to investment) space. He said my advice to "go with you gut" on this question was wrong and he was right...too much at stake and too many factors to consider.

maybe if we cheer him ala Derek Jeter...."Thir-ty (pause) Ye-ars", "Thir-ty (pause) Yeeaars" At the very least, if 30 years can't work with him, I bet he can recommend the right broker/advisor for this situation.

There is a brokerage, on the UWS, I think, that specializes in townhouses but I don't remember their name. My thought is that any realtor can act as a buyer's agent as long as they know that's the hat they're wearing but maybe I'm making that up. The principal has many years experience in the field & while this isn't a complete townhouse you're buying, I think it's closer to 'townhouse' than 'big co-op or condo building'.

You're thinking of Dexter Guerreri, Vandenberg Realty (townhousexperts.com). Great guy, but I would NOT get him to be a buyer's broker on a co-op in a DT townhouse. Talk to 30yrs.

david [at] dgneary [dot] com should get 30 years. Our company email is pretty spam-tastic, so PLEASE put "streeteasy" in the subject line.

Though if 30 is reading this let me point out that I have an email into him and he has to answer mine first.

ali r., who sits next to 30 when she drags herself into the office...

"30yrs - even if the above is correct, isn't it still true that anyone buying either of the two units for sale will have a much larger financial stake, yet will probably wind up being at odds with their neighbors over such things as maintenance costs, repairs, etc? All the upper west side apartment buildings turned coop, with units owned by longtime owners who bought at very low prices seem to have problems because the newer owners, buying at top dollar, have different expectations regarding those issues (as in, possibly the hallwsys really need repainting? The lobby looks decrepit? The elevators are really, really slow? etc. etc."

I'm sorry if it wasn't clear that this is EXACTLY what I was getting at: I write stuff over and over on this site, so sometimes I don't know how much to spell out in any given post for fear of people thinking "How many f-ing times is he going to say that same thing?". And the concept of "culture clash" between new owners at high prices vs old owners at low prices is a very recurring theme for me.

PS I've had some personal things headed South in my life recently and seeing all the good words from you guys REALLY has been beneficial to cheering me up. It's really nice to hear that at least someone is appreciating me. Thank you all sincerely.

"Though if 30 is reading this let me point out that I have an email into him and he has to answer mine first."

it sounds like I'm someone's exclusive and there's a sign in sheet ;).

tromp, wishing you and your family good luck and lots o' good advice above...having owned/lived in a 135 yr old brownstone walk up to fl 3/4/5 - move on. so much family friendly inventory avail now, keep looking. ever schlepp groceries, luggage, kids, or move into a walk up? - dont' forget to factor in the cost of the hoisting you'll probably need just to move in.

Tromp - "It would seem that all the above posters basically advised you to walk away, you just really don't want to hear it."

I wasn't being aggrssive, just listening to those first posters, followed now by many others.

If you really want this apartment, which you obviously do, you will go for it despite what anybody else thinks (possibly even a broker or a PE). All I can say is that I hope it works out for you.

And 30yrs - Yes, you are a major voice of experience, intelligence, and reason on SE.(and you don't even curse!!)

30yrs, ph41 just insulted you.

30yrs, i'm sure, also celebrated talk like a pirate day.

AR - very funny - 30yrs asterisks - Such a gentlemen!

ph41, 30yrs most certainly doesn't always asterisk. but yes, he is a gentleman.

Hey, romary, looks like you could have more input for us on this. When you owned in a 135 year-old brownstone, was it a small coop like this? How did that go? How expensive was it to maintain? If you can give me some input I'll appreciate.

Now, to move ahead with more topics, and just to make number crunching more precise: what kinds of amount are we talking about if things break down? (I'm asking from the vantage point of total ignorance) Let's say if a boiler for a townhouse of this size (4 stories, 1400 sqft per floor) breaks down, how expensive is it to repair or replace it? And the roof? The sidewalk vault? (which I still don't know what it is)? Any other ideas of expenses that should recur more than once in a 15 yr. term?

I have no clue as to actual costs of roofs, boilers, re-pointing, sidewalk care other than to say in a 110 unit coop the costs were always eye-popping in my last building. But the cost of the hardware or materials is just part of it. The attendent costs are many. For example: a brick falls from the facade to the street. Expenses prior to actually fixing the facade may include: hiring an engineer to inspect the facade to see what is up; bidding the job to contractors; immediately renting a scaffold and keeping it in place until work is done and inspections completed; city permitting and filing fees; any associated insurance costs for the project. And in a ten unit building, who do you think is organizing and looking into and supervising all this? A management company? The shareholders have to be completely involved if a handle is to be kept on the situation and costs. And with only 10 units, what happens if no one steps up to do all this? The odds you will have to involve yourself with such issues are high. This little hypo also assumes the brick didn't hit anyone or anything resulting in litigation and legal fees on top of the costs to remedy the situation.

Now say the facade project comes to $100,000. That's $10K/unit for a special assessment spread over 12 months because the reserve fund is insufficient to cover the expense without unacceptably depleating the fund. But 3 units with shareholders on fixed incomes can't come up with an extra $800/month for the next year. Where does the $30K deficit get made up? You better have an answer because you are likely to be one of the people who has to figure it out. What do you do about the delinquent shareholders...more legal fees accrued as counsel is hired to help.

Here's what I hear you saying: you are busting out at the seams of your current place and must move--it's getting dire; you can't afford the neighborhood and don't know what to do; this place is 50% less than others so you can afford it; as it is the only apparent option, you want very much to convince yourself it can work. I fear your judgment on this incredibly large investment is being clouded by the necessity of your circumstances and that you are struggling to find ways to discount the risks and ways in which this property is not appropriate for you.

kylewest, you may be right and I sincerely appreciate your input.

KW is a very wise man & my ears always perk up when I see his posts; thank you, KW.

I think what I noticed, trompi, was how defensive you were about this situation & that seemed to be a warning sign. I'm sure that we all have your best interests at heart & at least if you go ahead, it will be with your eyes wide open.

Besides the financial considerations, which are considerable, I think that KW also alluded to the fact that the talent pool here is small & haven't we all seen how one person often ends up shouldering the burden, whether it be at work, at home, church, etc. so that is another thing to think about.

I mentioned this before but I think it bears repeating. Generally in a co-op interview, you sit sweetly, meekly, offer no information, thinking, "Please, PLEASE let me in!" In this case, should you go that far, I think it would be wiser to use the co-op interview as a fact-finding opportunity & to see if there is a meeting of the minds in this new community you'll be joining & it may be the board that is thinking, "Please, PLEASE buy in!"

Another thought - stop using the elevator where you are now & begin schlepping everything up 4 floors & then see if this new place seems like a golden dream.

Kylewest, that was a very thoughtful response. I, too, have also been favoring small coops and now I think I will have to reconsider my position. I never considered all the ramifications until you spelled them out. Thanks for your post.

i agree with drdrd on the coop interview issue. if they seem evasive, i'd be very wary.

get information, and then make your decision. until then, try to keep your heart out of it. hard, but never fall in love until the documents have been signed and the keys are in your hands.

Think outside the box. You have certain fixed ideas right now such as staying in the area. For a moment, step outside that. Someone close to me several years ago decided she and her husband wanted more than anything to raise their children in NYC. They didn't want suburb children. But no matter how they looked, they could find nothing suitable in their price range in Manhattan for a family. The ended up in Boerum Hill. For less than the cost of a two bedroom on the UES, they have a renovated brownstone in a child-friendly neighborhood with very good schools; the commute to GV is 15 minutes by F train. The area is vibrant, youthful, safe.

I hear that you want to stay in GV, but you know that it is among the most expensive areas in all of NYC. It may be time to consider your family's needs first in terms of appropriate housing in the context of responsible financial planning. You may have already done it, but if you haven't explored a bit, take a few weekends and just TRY it. Look at Brooklyn's better, more fun, more affordable neighborhoods, etc. I'm no expert on the more affordably priced areas but there is tons of advice out there.

And consider renting. You don't have to dive in with a purchase. You'll retain flexibility, have more space, and be able to keep looking.

Whatever parameters you have set, step back from them and just pretend everything on your wish list were completely negotiable. It may open possibilities you hadn't seriously considered and actually get very excited about. I offer this because I think the pressure cooker you are putting yourself in by trying to find something to buy for a family in GV is robbing you of outstanding other, more do-able and wonderful options that are out there. I know the kids not moving schools and your walk to work, etc would be nice to maintain, but other terrific things may come from compromising on these.

lovely post, KW.

drdrd - but doesn't the coop interview come AFTER the signed contract? So, if they really really want the sale to go through, unless he somehow manages to totally p**s them off, they will approve and he will have to go through with the purchase, assuming everything else (mtg, etc) has fallen into place.

Oops, thanx; hadn't thought it all the way through, huh?

drdrd - probably dosn't really matter- everybody on this board has really had the patience of a saint (particularly KW, who I really hope has children who benefit from his patience) trying to fully explain the possible/probable pitfalls of a purchase like this.

I forgot to add- It hasn't made the slightest bit of difference - e(xcept, interestingly enough. to newbie, who obviously HAS been paying attention).

Hey guys, first of all, thanks everybody so much. I'm really glad that this discussion has been so productive, for everybody. I'll explain my position a little better, and I'm not referring to my position vis-a-vis this purchase, which I'm not that certain that I'll even bid for. I'm referring to a number of other factors that affect my family life. And yes, I'm not one to sit meekly and smile for the camera in any situation, so my plan for the coop interview, if we ever get that far along in the process, is to inquire as much as I can about this coop and see how they react to MY points of view.

For good or bad, my situation is quite complex. In terms of renting for much longer, that would mean losing out on 100K of basically free money that NYU is offering us as an incentive to leave faculty housing. The incentive is supposed to expire if you don't close by 3/31/10 but there doesn't seem that a lot of faculty have singed in for it (I don't blame them, if my apartment here were big enough I wouldn't consider moving at any price) so I'm inquiring whether they'll extend it. There's a good chance that the next decisive leg down for the market won't come until 2011 or 2012 and that the next 6-12 months won't get you more than a 5-10% discount, so I think it would be wise to try to grab NYU's money.

Another factor that ties me to downtown/west side a bit is the fact that I'm a freelancer (not good for coop interviews, I know) and if my Federal Court work diminishes for some reason in the future and I have to do some State Court work I would have to got to NJ (NY State pays interpreters like shit) That rules out Brooklyn and makes Yorkville not very appetizing.

On top of that I really mistrust Brooklyn public schools when you reach middle school.

Finally, to wrap this up, I'm under the impression that even if you have a signed purchase agreement you can put some contingency clauses in it and that, generally speaking, the result of the board interview and of the attorney's due diligence are game changers. In that sense, backing up because both the interview and the financial info available for the attorney showed you that the plan was bad should be doable and legal.

I don't think I've ever heard of buyer being allowed out of a signed contract because of claim by by that buyer'sattorney did not perform due diligence for his client). Due diligence comes BEFORE you sign the contract. And read post above re: board interview.

sorry: because of claim by the buyer that his attorney did not perform due diligence (diligently - sorry had to add that)

Tromp: I know you've posted before, but refresh my memory - what's your budget, size pref (conv. 3br, 2ba, right?) & were you open to UWS (good school zone).

Hey Tromp,

I've managed similar blds, gonna throw some ball park #s at you; depends on what condition the bld is in:

New roof: $15K-$30K
New Boiler: $15K - $25K
Repointing facade: Front only: $5K-$7K
Scrape & paint fire escapes: $3kish
New Sidewalk: $3kish

My 2 cents: RE is like a relationship: ez to get in, but can be hard to get out. IMO, when you want to sell, there will be a small pool of buyers, so you may wind up selling for less than you paid and/or waiting a long(er) time for a buyer, esply if it's a bad RE market.

Another thought: It's an old bld, no sound insulation in floors or walls, floors squeek, you have kids: your neighbors may ask you to wall to wall carpet the place &/or fix the (possibly) squeeky floors.

Also, is the electric upgraded? In some viejo buildings, electric won't support air conditioners or hair dryers or irons. This would leave you hot & wrinkled with bad hair. So, IMO, have apt (& bld:roof & bolier) inspected BEFORE you sign a contract.

Tromp, as ph41 so sagely pointed out, the board interview comes after you've signed the contract & thus THEY can reject you but if they say, "Bienvenido, pendejo", you're I N.

dwell - good additional info, but see all the above posts - many have tried to have him take a good hard look, and to get a professional to look at the building.

41, I think, to be fair, our friend tromp HAS become less defensive & is sounding a little more rational & cool in his appraisal & I'm sure if I were to share with you some of my real estate fantasies & ideas, you may well be telling ME to have my head examined; plus, in the final analysis, it's his decision to make &, thanx to our wonderful StreetEasy community, he has a lot more food for thought.

Attorney "due diligence" is done before a contract is signed in NYC. If the attorney unearths information later that makes you want to run you will potentially have your deposit tied up in escrow for eons while you litigate whether there was a breach of some contract term. Don't go that route.

Board interviews are also not info sessions. By the time you get that far the train will have already left the station in most sales. Get your answers before entering into a contract and plopping down a deposit. Here, for instance, the board may be so excited about establishing a high comp in the building that you could vomit and be drunk at the interview and they'd still approve you.

I still say it is simply not possible that GV is your only available option. As many reasons as you have convinced yourselves of for the "requirements" on your list for a new place, I encourage you to step back and ask yourselves what if such-and-such weren't a requirement? How could we adjust and what options would that open up?

Joysey? EAST Village? G A S P - staten island.

Alright, alright, I'm turning in my SE Badge RIGHT NOW.

been off the radar. It was a 3 unit brownstone, tres small. Urban legend and the guys in the hood said there was a funeral parlor on ground floor a jillion yrs ago. Good times. Anyway, we were a ground floor/basement unit 2 bed, small 2nd floor unit floor thru 1 bed, our unit 2 bed and roof deck. It was a condo, monthly condo fees in total were running $900 in total - fees were for oil, common electricity (entry/halls). always had a 5 figure balance on hand. We were self managed which meant my spousal unit and i pretty much did everything - snow removal, trash organized and out on pick up day, recycle bin ditto, planting in beds, window boxes, cleaning the common areas,sometimes hired out to do that it. Ground floor guy was great, paid on time. 2nd floor unit was rented out, owner paid on time. Roof was <5 yrs old when we moved in. Oil heat pre market explosion so wasn't off the hook. One neg oil burner was located in the ground floor unit basement - not a common/basement. New windows entire bldg <10 yrs old when we moved in. Dang sure the place could have used a roof to basement analysis of energy efficiency never got it done. Wish I still lived there but would be a tough communite to the 10111 zip code daily ...we didn't mind the schlepping apres Costco, grocery, neither did guests, but it's not for everyone. Moving in/out tres difficult. When we reno'ed everything came in via hoist - same with alot of furniture. And before anyone asks if i was in some midwest burg with such a low monthly mntnce hit, it was Boston.

ph41, drdrd et al, yeah, I guess what I was referring to is the interim time between the moment when the haggling stops and you've agreed to a price with the seller, and the moment when (after going through the documents and etc.) you find that everything is kosher and you sign in the dotted line. Question: the 2-3 mos that properties typically spend "in contract" (per Streeteasy) is a period, I guess, when there's an agreement but it's not a formal, final one. That's the time when your attorney is hard at work and you still can back up.

10023: What I'm looking for is a convertible 3, of no less than 1000 sqft (so it would be listed as 1200) with at least 1.5 bt, in a good school area, preferably downtown, Midtown, UWS and, in the case of UES, not too far east in case I have to commute to NJ. I have about 300K to put down (including NYU's help) and setting some money aside for closing costs, moving etc. My goal is for the monthly nut not to exceed 4200 pre-tax (that's why I look at walk-up or part-time DR places, instead of full service bldgs).

Dwell, the numbers you quote are sobering but not horrifying. Unless you expect an annus horribilis in which all of these things happen, you're looking at year-long assessments of 300-500 to cover those repairs. If you take into account that this place is 1300 sqft and that maintenance for such a place in a full service bldg. would be 1900 or so, whereas here the nominal maintenance is 1100, well, the fact that the real maintenance most of the time may be closer to 1400-1600 doesn't seem a deal breaker. What worries me is the possibility of bigger problems occurring, or some other owners being unable to pay the assessments, etc.

Kylewest, it would be a higher comp indeed, but not high for this market. 600 psf in the border between WV, chelsea and meatpacking.

tromp, the nyu money is just to leave right? you don't need to buy tomorrow?

i'd be the first to admit that moving with children is difficult, but give yourself some room. prices have FINALLY started coming down downtown (pithy, no?), and interest rates aren't headed up any time soon (although they will indeed head up, so you should be proactive). if your kids are already enrolled in a school, i assume they can stay there if you move? what are the ages of you children, because that would affect timing.

you need (or very much want, and i can understand the QOL issues) to find a place in a good school district that is relatively close to all your potential needs. there is a lot of room for price decline in Gramercy, which given your needs would be my first choice for you. I don't know what the middle school options are for Murray Hill, but certain parts there if the school is ok could reap huge apartments at less than $600 psf shortly.

so consider your options. you and yours can still walk to NYU from Gramercy or Murray Hill. your kids can remain in their schools (i think).

all the best, and i'm not saying that i totally disdain this idea in the slightest. i took a huge risk years ago, in a building a broker told me would never "rehabilitate" and those apartments appreciated 7 times or more. but only you know your risk tolerance. and what we're all telling you is that there may be other options where you are comfortable and these issues don't arise.

I have to say that I strongly disagree with a lot of the numbers dwell put up, and this is based on actual experience in a similar Coop in GV (3 buildings, originally 1852 Italianate brownstones, now 15 unit coop).

New Boiler was $50,000.
New Roofs I agree at $15K to $30K
Repointing front facade: if they are brownstones, there really is no repointing since there's no exposed brick exterior: painting will be about $30,000, re-brownstoning over $100,000. But even if it is brick, odds are that simple repointing won't be all since there will be decorative elements such as lintels which you don't have to deal with in simpler more modern facades.
Vault leaking: $40,000
New Sidewalks: $10K to $15K

Since 1995, this Coop has spent over $250,000 on capital stuff NOT INCLUDING THE HALLWAY RENOVATION (because that was cosmetic - but was another $80K to $100K for the 3 buildings). And there is a fairly urgent need to paint the front facade above the first floor which hasn't been done or paid for yet (and will probably be another $40,000)

And as I alluded to in prior posts, I agree with KW that the ability of the others in the Coop to pay is a BIG issue. For example, in the Coop I talk of above, EVERY TIME anything needed to be done which required an assessment, both the prior and the current owners of the largest unit in the building creid poverty, that it was bankrupting the building, etc. and pushed for more and more debt on the building which turned it from one with slightly high mtc into one with too high mtc because of the usual feeling of many shareholders in many buildings that somehow "coop money" is different than "shareholder's money" so mortgages get taken out and then funds get wasted because there's this "free money" laying around.

Apropos of nothing, I'll throw in that in down markets, buildings on 2 way cross-town streets become increasingly difficult to sell and fall in value more than the market as a whole.

AR, the kiddes are 5 yrs & 3 months. I just keep thinking of all those blasted S T A I R S.

Are you sure they are BOTH circa 1910? The reason I ask is that the capital costs for the Coop are the capital costs for the Coop, and if one building is older and needs a capital expenditure of $50,000 to fix something, it doesn't matter if you live in the other one, you still pay your share of the cost. Also, Is it one set of building systems or 2 (i.e. does one boiler service both buildings?). One reason I ask is that if you have one boiler servicing 2 buildings which were built at different times and were originally piped to run off of the boiler in that building, you typically have lots of problems with the boiler and water hammer and other realated issues, because one pipe steam in 100+ year old buildings is not only a bitch, but something that almost no one understands (even guys who are supposed to be "experts" in boilers and service and install them on a regular basis. I was forced to become a bit of an expert in one pipe steam heating as a result of this. Go read Dan Holohan's "The Lost Art of Steam Heating" and follow the discussion on his website heatinghelp.com (side note: I haven't looked at that site in a few years: Dan's really upgraded it a lot since then)

30yrs, that's a great book! I have the 11th printing, from 2000, so must've gotten it just because it sounded interesting. It really is.

Hi 30yrs., These 2 buildings are not brownstones, just plain brick townhouses with their share of decorative elements but not a lot of them. My info is that both are circa 1908. Your experience with the 3 GV brownstones works great as a template. 1995 to 2009 is 14 years. The expenditures were 250,000 capital plus 90,000 cosmetic for 3 buildings. That's 340K total. For 2 buildings that comes to 226,000 total, which is 16,000 per year, or 1,600 per unit per year provided that everybody pays. If the assessment were permanent and regular (which of course it never is) that comes to $134 per month. Even twice as much would be doable, if you keep a personal reserve fund waiting for the assessments to come, as they will. In fact, according to the realtor, right now there is a $300 assessment destined simply to replenish the fund.

The problems come, I guess, because the assessments are not a regular $160 every month but rather $500 or $600 all of a sudden for 12 months, and people live already beyond their means the American way and some are not willing or able to get that extra money at the time, and that becomes a burden, a source of conflict, etc. However, in terms of sheer numbers, it doesn't sound like the coop you're using as an example ever came to the point of asking its more responsible/prudent shareholders to come up with $1500 per month for a year, or anything like that. What's the worst money crunch you remember?

aboutready, unfortunately the NYU money has an expiration date 6 months from now. That date (March 31st, 2010) is also the date by which you need to vacate faculty housing, in order to be eligible. I'm currently inquiring with them whether they would grant me access to the money for an additional year if I commit to vacate by the date they want. It's a possibility and I'm sure that would put me in a better position. But this crisis may take soooo long to run its course, with a double-dip recession and whatnot, the deleveraging that has to occur is so monstrous that it may take until 2012-2013. I generally pity those who bought in 2009. My fear is that buying in 2010 or even 2011 may not be late enough, and that you'll buy and see you house lose value ipso facto. And, alas, here I'm considering a purchase... it's so weird. Then again, because of NYU's help and given my price range somewhere between 650K-800K, what I always wonder is if the rest of the leg down will be more than 15% and therefore more than what NYU's money would do for me...

Ah, that old, lovely habit of deciding the most important dilemmas by way of a coin toss...

tromp - "in contract" IS FORMAL, FINAL!!!! 2-3 months is waiting for the coop board to look at your documents and schedule an interview, and for you to get your financing. Yes, things can go south from there (board turns you down, you can't get financing, though these days I don't know if mortgage contingencies are still being written into contracts).

Please, Tromp, talk to someone who is knowledgable about buying real estate in New York - a live person - not just all these incredibly helpful people on SE. You are a babe in the woods - and you need in person advice. And possibly someone pounding on your head to make you listen

OK - EVERYONE - NOW POUND ON ME FOR BEING TERRIBLY NASTY

OP: "Question: the 2-3 mos that properties typically spend "in contract" (per Streeteasy) is a period, I guess, when there's an agreement but it's not a formal, final one. That's the time when your attorney is hard at work and you still can back up."

Oh, gosh. Tromp, this is so far off it is frightening. ph41 is correct. There is no such thing as the agreement "not being formal." When you sign the contract you are essentially locked in other than a possible out if you have a mortgage contingency clause (that is, if you don't get financing you get your deposit back and there is no sale). ALL due diligence must occur BEFORE you sign the contract. After the contract is signed, there is virtually nothing for your attorney to do until closing. All the heavy lifting comes BEFORE the contract. A average contract specifies a closing date 30 days from signing. Each party can usually extend that date as a matter of right by 30 days. If both parties agree, the closing can be delayed even further. That is why most deal close 2-3 months from the signing of the contract--not because a lawyer is running around learning things.

You may be confusing the negotiating period which his non-binding. The back and forth on price, the agreement on a price, the reviewing of the contract by each side's attorneys. Until the contract is signed by both, there is no formal agreement. Typically, parties come to an agreement on price and general terms. Then the seller sends the buyer a contract. Buyer's attorney spends on average no more than 5-10 business days dickering terms in the contract and conducting due diligence on the unit/building. The seller will expect a signed contract no more than 2 weeks after sending it to you. During this period, neither party is obligated to the other in any way. When you send the contract to the seller with your signature, the seller usually takes a couple of days to get it signed and deliver a copy to your attorney. During the next months, you are setting up financing, scheduling moves, coordinating the closing with your attorney and theirs (there are a zillion parties present at closing and all must be coordinated--you, seller, agents, banks, managing agent, lawyers).

On a related note, what kind of negotiations can happen after you sign the contract?

If we wanted to have an inspector view the apartment, is there any help in having it done after we're in contract? And I know we'll do a final walkthrough at or before the closing. If there is a problem at that point, for example the washer has broken, is there anything that can be done at that point?