How to get more Liquidity for Co-op Boards

Do you mean you're buying a $1.3 million coop? How are you going to put 30% ($390,000) down if you only have $180,000 in liquid assets?

I'm assuming you will have about $180K left after paying the 35% down.

Coops admissions committees look very carefully for sudden changes in balances in accounts. You'll have to provide statements for the most recent 3 months for most board packages. If they have questions, they may (but don't usually) ask for older statements. Trying to fool a coop board is a bad idea generally. If they catch you misrepresenting something they'll turn you down and if they feel what you did was fraudulent, you may lose your deposit for having failed to act in good faith. Many cautions here.

Ditto what kylewest said.

Triple your income is too much to pay. Add in your share of the co-op's underlying mortgage, and it's even more than triple.

Co-ops are for after you've stashed lots of money away. If you're reduced to trickery and finagling in order to swing it, best to look at other options.

Triple your income is too much to pay. Really? I actually have no idea but it seems low when you say it.

"My partner and i plan to buy a co-op this year at around 1.3K. our combined income is around 450K, no kids, no debt, great credit."

What do you mean you and "your partner"? Are you gay? Do you live with someone of the opposite sex your not married to? Sorry, to brak this to you, but in many co-ops, especially the upper end ones, this might make the board uncomfortable since your not a "traditional" family. Please don't attack me because I am just reporting the reality.

The rule of thumb is 3x gross = cost of house. But I am conservative than that.

I feel a mortgage double your HHI is fine if income is pretty solid. I'd just take $30K "gifts" to put in the account. Say it is a gift from family if asked.

The_P, you're about 20 years behind the times. After the last discussion about this (http://www.streeteasy.com/nyc/talk/discussion/8988-poll-how-much-can-we-afford-) I checked with my gay-law expert, who knows every case and personally knows hundreds of same-sex couples, married and not, most of whom live in co-ops. It's really not an issue. In fact, you'd be hard-pressed to find a board that was completely "traditional".

it depends on the board. A board on Park or 5th Ave. where most of the board memebrs are 65+ are not going to be open to gays.

Our co-op has found that gays use less water, so we agreed to up our limit to 15% in the building.

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In that case, they better be open to individual liability to a $100,000 fine for violation of New York State Human Rights Law for willful housing discrimination based on sexual orientation.

Quoting intended of The_P.....this software is really lame....

whatever you do to dress up your financial situation, do it so that it is not apparent in the three months of statements etc that most boards require

i have never heard of a deposit not being returned after a board rejection--in fact one rarely knows the reasons for rejection--and no board wants to be involved in litigation over financial representation of rejected buyers

i had a relative tranfer securities into accts of mine years ago to dress up for my first coop purchase--if your statements show the positions as stable during the three month period, you should have no issue, and who's to say that you intend to return the securities?

the real issue here is the tax accounting problems this can produce, as well as current, stringent procedures re this type of thing with brokers and banks---if this tranferis not returned prior to year end could be a real pain in the ...

gay? who wants to live in a building controlled by bigots? hopefully our city is over gay as an issue unto itself...and im straight...not that theres anything wrong with that

Two points: #1: just be prepared to explain all funds and anything else in the board package that you are asked about. You are expected to be completely conversant in the documents you submit. As a member of admissions committees in the past, I can tell you none was ever shy about asking about the source of funds however long they were in a given account if we couldn't tell from the fiinancials where the money came from.

#2: the gay thing is and isn't an issue, and again I speak from personal experience in 20 years of NYC coop real estate in Chelsea, lower Fifth Ave, and GV. There are disparities for gay people in the application process. All of a sudden, it becomes relevant how long you have been together. A 6 month relationship is viewed differently than a 10 year relationship by coop boards because they look for stability. While this is an understandable factor, in a sense, it is also unfair since a hetero couple married only 4 months wouldn't come under this same scrutiny. No one is going to ask how long they've been married (illegal question). In addition, if a couple isn't married (and given that NY makes it illegal for people to marry in the state, most gay couples are not married--many feel chasing civil rights around the country is offensive), a board may ask for individual letters of reference. Personally, I drew the line there, said we're a union as much as is possible without leaving and returning to this state, and that I'd sooner walk away from the contract and sue everyone involved than submit individual versus couple references. The broker who suggested it backed down instantly and it turned out not to have been a board requirement or issue at all. Finally (I have to get to work), a married couple's financial docs are usually simpler than two same-sex people if for no other reason than same-sex people must file separate tax returns. In the end, though, very few boards--including at high end coops--will give gay people a harder time these days. What they want is stability--both financial and social. A long-term same-sex relationship that bears all the indicia of a marriage is what will matter more. Of course there are exceptions, but they are not the rule. There are plenty of gay people in every lower Fifth Ave 'gold coast' coop, there are tons of gay people on Park and upper Fifth, and in most every coop around Manhattan. The challenges and inequities the laws pose are offensive and indefensible, but even if it takes a bit more work, a coop board is not likely to be the major stumbling block. Bank financing? That's a challenge worth considering.

What we need to simplify this mess and take the anxiety out of gay couples wondering if they'll be rejected for not being married is obvious. We need gay marriage in NYS. Pathetic Iowa offers it and we don't. The Dems in Albany can't seem to do much else--maybe they can at least get gay marriage passed.

While I agree with KW that we need gay marriage throughout this country, I think it's a slightly rosy view of the world that "there are plenty of gay people in every lower Fifth Ave 'gold coast' coop, there are tons of gay people on Park and upper Fifth" ...I work for a firm based in Chelsea, and I don't think either of my gay sponsoring brokers (one married, one not) would agree that there's that little discrimination.

However, to get to the OP's question, your financials are probably fine as is. Take the $13K gifts from your family as housewarming gifts, but a) it's deceptive to pad your account with $100K and b) in your situation you don't need to.

ali r.
{downtown broker}

- and never think twice about going out on a limb financially to purchase real estate because EVERYBODY knows that real property only increases in value.

sounds like your liquid is way way way too low, unless that is 180K after closing

>>While this is an understandable factor, in a sense, it is also unfair since a hetero couple married only 4 months wouldn't come under this same scrutiny.<<

Yes, but a hetero unmarried couple would.

I'm on a co-op board with fairly strict requirements.

1. buying something 3x HHI is fine.
2. putting down 30-35% is good.
3. having 180k left over is fine, not great, but fine
4. gay issue not an issue.

don't bother with the gift stuff.

should add -- you know what I'd like to see with that low cash reserve: job stability. if you and/or partner have been at your job 8 yrs, that's a lot better. there are a lot of people who can make 450k this year, lose a job, and not find themselves in that position again, especially in a creative field. that's why the old professions are new again. my board would like nobody more than the city's top plumber or dentist.

abcdefg - well I just got another board turndown, buyers were psychiatrist and attorney, solid income, solid liquid after closing...

boards are out of control right now in my opinion!

UD: I think we are seeing a confluence of 2 Board stupidities: they don't want to see prices down in their building, but they think the market is going down, so at the same time they don't want to let transactions at lower prices go thru, they don't want to let transactions at higher prices go thru either, because they know the risk of buyers of such defaulting.

UD--is it possible the board was concerned psychiarist could have paitents coming to the building? Remember the incident a couple of years ago when mental health professional was murdered by patient. Ridiculous, but compared to some thing board issues, it almost sounds sane.

If I were on a board, and I was, I would tend to look questioningly, but by no means eliminate, at unmarried hetero couples but not gay ones. Difference is heteros CAN get married and have obviously CHOSEN not to for whatever reason. Same sex couples have no choice but to remain unmarried (or travel by as KW said, that is not an acceptable option for many). When, and I say when not if, the law changes I would think that same sex couples who have come so far as to purchase property together would choose to make their union legal.

"In that case, they better be open to individual liability to a $100,000 fine for violation of New York State Human Rights Law for willful housing discrimination based on sexual orientation."

It is virtually impossible to prove discrimination in court. Unless you have the board presdient saying on hidden camera "I don't want any damn queers in my building" or something similar, you don't have much of a chance of prevailing.

no...application clearly asked this question and was clearly noted use as primary residence. In addition, employment questions answered the location of the buyers office where they held practice.

"the gay thing is and isn't an issue, and again I speak from personal experience in 20 years of NYC coop real estate in Chelsea, lower Fifth Ave, and GV. There are disparities for gay people in the application process. All of a sudden, it becomes relevant how long you have been together. A 6 month relationship is viewed differently than a 10 year relationship by coop boards because they look for stability. While this is an understandable factor, in a sense, it is also unfair since a hetero couple married only 4 months wouldn't come under this same scrutiny. No one is going to ask how long they've been married (illegal question). "

As a gay man and co-op board VP, I admit there is a double standard at work here.

The problem is, the two partners in a heterosexual marriage are viewed as one legal entity, while the two partners in a homosexual union are viewed as two separate units living together. The reason why the heterosexual marriage of just four months is viewed as more "stable" than the homosexual union of 20 years is because of the difficulty of dissolving the marriage versus the union.

Heterosexual divorce requires a great deal of time and money as well as the involvement of courts and lawyers. Homosexual breakups involve only someone moving out the next day.

"My partner and i plan to buy a co-op this year at around 1.3K. our combined income is around 450K, no kids, no debt, great credit.

We plan on putting 30-35% down and are are looking at monthly around 6.5K

we have around 180 in stocks and cash.

Should we ask our family for temporary gifts of 13K (or whatever the limit is)?

Is there an issue with the money "seasoning" in our accounts. ie., should we let it sit there for a couple of months before buying?

Is there any way for our parents to just plop 100K temporarily into our acct as a temporary loan."

I'll address these issues one at a time, the way a co-op board would:

1. Your "combined" income is $450K. What do you two do? How equal is the income distribution? How volatile are your jobs? Is that salary alone, or does that figure include bonuses? (A growing number of boards these days, including ours, no longer allow bonus money into the income calculations.)

2. "We have around 180 in stocks and cash". The co-op board is most likely going to want to see at least $100K in liquid assets after you've made your down payment and paid closing costs. So what you really need in liquid assets today to buy that home with just 20% down is $360K.

3. Which brings us to the next point, which is how are you going to make up that $180K shortfall? You may certainly ask for "gifts" of money -- there's nothing wrong with that -- but engaging in fraud vis-a-vis having parents "park" their funds in your account and lying about them being your own funds is unlawful (you'd be signing your name to a lie on notarized contracts), and even if the scheme DID work, could result in the board voiding your proprietary lease and eventually forcing you out.

"It is virtually impossible to prove discrimination in court. Unless you have the board presdient (sic) saying on hidden camera "I don't want any damn queers in my building" or something similar, you don't have much of a chance of prevailing."

So in your mind then it's perfectly all right, then, to violate that particular law? Just trying to understand how you look at this....

Given how this thread seems to be casually accepting the inevitability of serious Human Rights violations in some of the most prestigous addresses in the world, I think it might be time for the next Manhattan Attorney General to set up a couple of sting operations....Cyrus? Mr Vance? Yes?

"First off, thats just dumb. DUMBO borders Brooklyn Heights, it borders Downtown brooklyn, if you're talking about walking."

Don't be such a drama queen.

It's not like we're doing water-boarding. We co-op boards are often saving applicants from their own stupid actions.

Ooops. I meant to respond to this silly quote:

"Given how this thread seems to be casually accepting the inevitability of serious Human Rights violations in some of the most prestigous addresses in the world..."

abcdefg - well I just got another board turndown, buyers were psychiatrist and attorney, solid income, solid liquid after closing...

boards are out of control right now in my opinion!

____

I agree they often are! But nobody wants lawyers. We've had two problematic shareholders in our co-op's history -- both lawyers! We would never turn a lawyer down for just being a lawyer, but I've heard of just that.

"is it possible the board was concerned psychiarist could have paitents coming to the building? "

"no...application clearly asked this question and was clearly noted use as primary residence. In addition, employment questions answered the location of the buyers office where they held practice."

I still know of plenty of cases where Boards either assumed or feared that they would end up seeing patients in the building, and routinely reject psychiatrists as a result.

Didn't an ex-patient kill a psych on the UES recently?

"It is virtually impossible to prove discrimination in court. "

Although you do know it has already occurred, right? (Coop Board members being held personally liable for discrimination - racial).