HDFC without reserve, all cash deal, going up for auction
Started by velogrrrl
almost 16 years ago
Posts: 7
Member since: Jan 2010
Discussion about
Hi, I'm trying to figure out what to do. I'm looking at an hdfc (that is all i can look at- it is what i can afford). It is an all cash deal because they haven't had their finances certified. my understanding is that it is because the president of the board is occupying two apartments (against hdfc rules) and so is trying to protect themselves. I can just barely make an offer on the place with... [more]
Hi,
I'm trying to figure out what to do. I'm looking at an hdfc (that is all i can look at- it is what i can afford). It is an all cash deal because they haven't had their finances certified. my understanding is that it is because the president of the board is occupying two apartments (against hdfc rules) and so is trying to protect themselves. I can just barely make an offer on the place with savings and help from a sibling. I don't think the coop has a reserve fund. That makes me nervous. on the other hand, it is affordable, in the neighborhood i currently live in (the neighborhood i want), and I like the layout and space.
How worried should i be that it doesn't have a reserve, and does anyone have experience with auction sites? how is this different than a normal sale and are there significantly more cost to the buyer on an auction?
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Response by NYCMatt
almost 16 years ago
Posts: 7523
Member since: May 2009
I think if you can barely cobble together the money (with help from a third party) for the purchase, you have bigger worries than the BUILDING'S finances.
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Response by notadmin
almost 16 years ago
Posts: 3835
Member since: Jul 2008
"they haven't had their finances certified. my understanding is that it is because the president of the board is occupying two apartments (against hdfc rules) and so is trying to protect themselves"
wow, i wish i were a RE lawyer sometimes. no idea how uncommon is it for a building not having their finances certified, nor the real reasons why this would be so (i wouldn't buy that president of the board "gossip" per se).
but... i've seen several sponsor sales on HFDC "all cash" (wondering why on earth only all cash deals are possible) in which the asking is around $150-200k and the recorded amount was around $50k. do not overbid!!! maybe you are one of these lucky low ball bidders.
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Response by nyc10023
almost 16 years ago
Posts: 7614
Member since: Nov 2008
Your risk appetite has to be huge. If all in, my cost for the apt & mtce was equal to rent for 3 years, then I'd bid that - 3 years. Think of it as rent paid upfront. If you walk away from it with zero after 3 years, same as rent.
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Response by notadmin
almost 16 years ago
Posts: 3835
Member since: Jul 2008
exactly right nyc10023. i'd bid 2.5 years of equivalent rent plus make sure i'm able to rent it if i were to move out of the city. if i get rejected, then i'd bid 3 years, but stop there. it also depends on how high the maintenance is (and where it might be heading towards, in this case is higher, no doubt).
keep in mind velog that most households that satisfy the income restrictions (your competition) have a barely positive savings rate nowadays, and negative during the last several years. so cash is king and there's not a whole lot of competition for you out there.
i'm seeing more and more of this HDFC becoming available for some reason. it might be that there's more listing transparency thanks to street easy and the internet in general. another explanation i've heard is that sponsors are having a hard time paying maintenance fees. but i don't know whether this could be the case with a HDFC.
best of luck with your bidding! unfortunately, i have no clue about bidding online. i'm even surprised that something in nyc is being sold that way.
I think if you can barely cobble together the money (with help from a third party) for the purchase, you have bigger worries than the BUILDING'S finances.
"they haven't had their finances certified. my understanding is that it is because the president of the board is occupying two apartments (against hdfc rules) and so is trying to protect themselves"
wow, i wish i were a RE lawyer sometimes. no idea how uncommon is it for a building not having their finances certified, nor the real reasons why this would be so (i wouldn't buy that president of the board "gossip" per se).
but... i've seen several sponsor sales on HFDC "all cash" (wondering why on earth only all cash deals are possible) in which the asking is around $150-200k and the recorded amount was around $50k. do not overbid!!! maybe you are one of these lucky low ball bidders.
Your risk appetite has to be huge. If all in, my cost for the apt & mtce was equal to rent for 3 years, then I'd bid that - 3 years. Think of it as rent paid upfront. If you walk away from it with zero after 3 years, same as rent.
exactly right nyc10023. i'd bid 2.5 years of equivalent rent plus make sure i'm able to rent it if i were to move out of the city. if i get rejected, then i'd bid 3 years, but stop there. it also depends on how high the maintenance is (and where it might be heading towards, in this case is higher, no doubt).
keep in mind velog that most households that satisfy the income restrictions (your competition) have a barely positive savings rate nowadays, and negative during the last several years. so cash is king and there's not a whole lot of competition for you out there.
i'm seeing more and more of this HDFC becoming available for some reason. it might be that there's more listing transparency thanks to street easy and the internet in general. another explanation i've heard is that sponsors are having a hard time paying maintenance fees. but i don't know whether this could be the case with a HDFC.
best of luck with your bidding! unfortunately, i have no clue about bidding online. i'm even surprised that something in nyc is being sold that way.