We're looking at a condo in Harlem to purchase and currently doing due diligence along with our attorney. There's not much in terms of amenities: no elevator, no doorman, no common space other than parking and sidewalks. Each unit has its own heating and door from outside. Common charges are very low, like $120/month. Recent major renvations were that the roof was replaced as well as some brick... [more]
We're looking at a condo in Harlem to purchase and currently doing due diligence along with our attorney. There's not much in terms of amenities: no elevator, no doorman, no common space other than parking and sidewalks. Each unit has its own heating and door from outside. Common charges are very low, like $120/month.
Recent major renvations were that the roof was replaced as well as some brick point conducted.
When we asked for financials and minutes we received 05-06, and 06-07. Apparently the 08 financials are not done yet, and they're working on them? Isn't there a law about when they must be provided? Is this incredibly sketchy?
As for the minutes, we were told it was a self-managed building and the condo board has not met in a while. There were some minutes from 2006 which we read and were able to get feedback about.
I can't tell if the board is just really laid back because there is not much to deal with or if someone is seriously dropping the ball, or if something sketchy is going on.
Also the seller's lawyer remarked that we may have trouble getting financing without the 2008 financials for the bank. Does that sound accurate?
Any thoughts? Thanks.
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Response by columbiacounty
almost 17 years ago
Posts: 12708
Member since: Jan 2009
hilarious.
unless you are under the impression that you are getting the deal of a lifetime, I would suggest moving on.
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Response by MichaelG
almost 17 years ago
Posts: 24
Member since: Jun 2009
We really like the place, it has 19/20 things that we want. And we think that we're getting a pretty good deal, also we should qualify for the 8K if can close in time. I just can't tell if we're overreacting about this issue.
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Response by apt23
almost 17 years ago
Posts: 2041
Member since: Jul 2009
pressure the seller to get the board in line and get the paperwork done or you will walk. make seller realize sale is not possible to you or anyone without the financials and up to date minutes. but if you don't get them, i too suggest you walk. how would you feel if the minutes you never received happened to mention something dire -- like the foundation of the building was sinking. anything is possible in real estate.
Built on the cheap (HDFC) in mid-1990s, so roof and repointing already doesn't bode well. Have an inspection done.
15 parking spots leased to the 28 owners, so if you want one, check how they're divvied up.
The low CCs make sense for this kind of rowhouse condo.
I can see how a self-managing board, pulled from only 28 owners, might be slow. Plan on pulling some board duty yourself.
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Response by MichaelG
almost 17 years ago
Posts: 24
Member since: Jun 2009
NWT, You totally blew up my spot...I was trying to be discreet. That's okay though as long as your provide me with knowledge.
How do you know that its 15 spots for 28 owners? I have not seen that written anywhere. I don't believe it was HDFC, it was income limited initially, but no longer. We will certainly do an inspection before contract. I've heard 15-20 years for a roof, so I guess 13 years for a cheap roof isn't awful. The brickpoint was related to fire damage.
I want to be involved with the board, I just don't want to buy into a building that has sketchy financials.
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Response by columbiacounty
almost 17 years ago
Posts: 12708
Member since: Jan 2009
then move forward cautiously. no need to be unpleasant in any way. bank will require current financials and 2007 is not current. also consider as noted above that you may have to take an active role in the management of this building and that can be a huge headache particularly if you're seen as the pushy outsider insisting on financials and board minutes.
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Response by NWT
almost 17 years ago
Posts: 6643
Member since: Sep 2008
It was 15 spots in the condo declaration. They may have reconfigured.
HDFC for the original financing, then they go away, I guess. (No clue how HDFC works.)
The owner from 2001-2008 made the bucks here. Bought for $254K, sold for $570K. Current owner is really going to take a beating, selling in less than two years.
No idea what the place is worth today.
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Response by MichaelG
almost 17 years ago
Posts: 24
Member since: Jun 2009
CC, apt23, NWT - thanks for the info and recommendations.
NWT - Where can you locate the original condo declaration? And yes, sellers are definitely taking a loss.
The unit is block 1960, lot 1121, so do a parcel search on that to see the deeds since '95, etc.
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Response by MichaelG
almost 17 years ago
Posts: 24
Member since: Jun 2009
Great thanks for the help. I had been looking at ACRIS but did not realize what all of the documents were.
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Response by front_porch
almost 17 years ago
Posts: 5325
Member since: Mar 2008
not that crazy for 2008 financials to not be available yet, but they should at least be in process -- talk to the broker about getting an unaudited copy, and when the audited copy will come out.
ali r.
{downtown broker}
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Response by columbiacounty
almost 17 years ago
Posts: 12708
Member since: Jan 2009
so...when do you think it's alarming that there are no audited financials?
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Response by front_porch
almost 17 years ago
Posts: 5325
Member since: Mar 2008
CC, I'd say it's alarming if they're not in process now, and if an audited copy isn't available by the end of the year.
ali r.
[downtown broker}
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Response by MichaelG
almost 17 years ago
Posts: 24
Member since: Jun 2009
Thanks front_porch, I wasn't sure how out of the ordinary this was. Apparently they're working on them now. We told them we need them before we sign the contract.
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Response by columbiacounty
almost 17 years ago
Posts: 12708
Member since: Jan 2009
why is a year from the end of the fiscal period a reasonable time for financials? its not like there is some complication associated with this...it is cut and dried assuming that normal financial records are kept on an ongoing basis. there is no price break on the audit fees so how can it not be a bad sign if 9 months later they're still working on it? what is the date on the prior year audited financials?
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Response by MichaelG
almost 17 years ago
Posts: 24
Member since: Jun 2009
The most recent year that I have has a date of early August. The year prior to that it was mid April.
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Response by columbiacounty
almost 17 years ago
Posts: 12708
Member since: Jan 2009
same firm?
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Response by MichaelG
almost 17 years ago
Posts: 24
Member since: Jun 2009
For those 2 years it was the same firm. In fact they added another CPA on their stationary for the second year. I'm assuming they're going with the same people still.
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Response by columbiacounty
almost 17 years ago
Posts: 12708
Member since: Jan 2009
ask the seller or their broker if they can put you in touch directly with the guy handling the audit. worth a shot if you're still interested in this place. could be a reasonable story although the odds are that the building failed to provide data when necessary; many smaller accounting firms will slot an audit for a particular time--if you miss your date you go to the end of the line.
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Response by MichaelG
almost 17 years ago
Posts: 24
Member since: Jun 2009
thanks for the suggestion. I just found out they weren't available so I"m going to give it a couple of days before I start pressing for the reason why they're so late.
hilarious.
unless you are under the impression that you are getting the deal of a lifetime, I would suggest moving on.
We really like the place, it has 19/20 things that we want. And we think that we're getting a pretty good deal, also we should qualify for the 8K if can close in time. I just can't tell if we're overreacting about this issue.
pressure the seller to get the board in line and get the paperwork done or you will walk. make seller realize sale is not possible to you or anyone without the financials and up to date minutes. but if you don't get them, i too suggest you walk. how would you feel if the minutes you never received happened to mention something dire -- like the foundation of the building was sinking. anything is possible in real estate.
Sounds as if it's http://www.streeteasy.com/nyc/sale/374015-condo-2543-eighth-avenue-central-harlem-new-york
Built on the cheap (HDFC) in mid-1990s, so roof and repointing already doesn't bode well. Have an inspection done.
15 parking spots leased to the 28 owners, so if you want one, check how they're divvied up.
The low CCs make sense for this kind of rowhouse condo.
I can see how a self-managing board, pulled from only 28 owners, might be slow. Plan on pulling some board duty yourself.
NWT, You totally blew up my spot...I was trying to be discreet. That's okay though as long as your provide me with knowledge.
How do you know that its 15 spots for 28 owners? I have not seen that written anywhere. I don't believe it was HDFC, it was income limited initially, but no longer. We will certainly do an inspection before contract. I've heard 15-20 years for a roof, so I guess 13 years for a cheap roof isn't awful. The brickpoint was related to fire damage.
I want to be involved with the board, I just don't want to buy into a building that has sketchy financials.
then move forward cautiously. no need to be unpleasant in any way. bank will require current financials and 2007 is not current. also consider as noted above that you may have to take an active role in the management of this building and that can be a huge headache particularly if you're seen as the pushy outsider insisting on financials and board minutes.
It was 15 spots in the condo declaration. They may have reconfigured.
HDFC for the original financing, then they go away, I guess. (No clue how HDFC works.)
The owner from 2001-2008 made the bucks here. Bought for $254K, sold for $570K. Current owner is really going to take a beating, selling in less than two years.
No idea what the place is worth today.
CC, apt23, NWT - thanks for the info and recommendations.
NWT - Where can you locate the original condo declaration? And yes, sellers are definitely taking a loss.
Go to http://a836-acris.nyc.gov/Scripts/DocSearch.dll/Detail?Doc_ID=FT_1960004564296 then to View Document at the bottom.
The unit is block 1960, lot 1121, so do a parcel search on that to see the deeds since '95, etc.
Great thanks for the help. I had been looking at ACRIS but did not realize what all of the documents were.
not that crazy for 2008 financials to not be available yet, but they should at least be in process -- talk to the broker about getting an unaudited copy, and when the audited copy will come out.
ali r.
{downtown broker}
so...when do you think it's alarming that there are no audited financials?
CC, I'd say it's alarming if they're not in process now, and if an audited copy isn't available by the end of the year.
ali r.
[downtown broker}
Thanks front_porch, I wasn't sure how out of the ordinary this was. Apparently they're working on them now. We told them we need them before we sign the contract.
why is a year from the end of the fiscal period a reasonable time for financials? its not like there is some complication associated with this...it is cut and dried assuming that normal financial records are kept on an ongoing basis. there is no price break on the audit fees so how can it not be a bad sign if 9 months later they're still working on it? what is the date on the prior year audited financials?
The most recent year that I have has a date of early August. The year prior to that it was mid April.
same firm?
For those 2 years it was the same firm. In fact they added another CPA on their stationary for the second year. I'm assuming they're going with the same people still.
ask the seller or their broker if they can put you in touch directly with the guy handling the audit. worth a shot if you're still interested in this place. could be a reasonable story although the odds are that the building failed to provide data when necessary; many smaller accounting firms will slot an audit for a particular time--if you miss your date you go to the end of the line.
thanks for the suggestion. I just found out they weren't available so I"m going to give it a couple of days before I start pressing for the reason why they're so late.