Hillman Coop maintenance costs

this building has some of the most stable and cheapest rates in the city. $1000 per month is high for a true 2 bedroom in this building. Most likely you are looking at a property where 2 units were combined.

How is the area? I know is close to Chinatown but how is it at night? Is it save and quiet?

it is as close to Chinatown as is Soho - actually Soho is closer.

It is very safe, and quiet at night. One of the best areas for families in the city. The building has a great private playground.

Many of our friends live in these buildings and they love it. Dont want to leave the area.

Thanks for comments. As for the area, I'm still debating what I think of it. It's close to good LES cafes, restaurants, the Essex St. Market, etc., but the actual strip of Grand St. is a little dreary. The well-kept gardens around the buildings perk it up.

I'm becoming convinced that it's pretty safe. And East River Park is getting spruced up which is a good sign.

It's an 8-minute walk to the F train, a bit longer to the B&D on Grand.

The apt is definitely not a combined unit--it's a typical Hillman 2br layout.

As their magic stream of initial flip-taxes runs dry, you'll see an even more magical explosion in maintenance costs.

alanhart - you are wrong. Flip tax is ongoing. How does it run dry? Also these buildings have probably been the most stable and un-speculative in Manhattan.

Also I do not own or plan to buy in these buildings so this is an unbiased observation.

Yes, I know, their boards are too selective for that.

The initial flip tax is something like 45% -- a huge windfall. Subsequently, it's 5% ... very nice, but not enough to make up the difference as the rate of initial flips diminishes.

wow Alanhart you are completely comfortable with putting out "facts" that totally erroneous and acting like you are correct. Please do not give advice to people when you have no idea about what you are saying is true.

http://www.coopvillage.coop/hillmanHC/hillmanByLaws.html#VI.5

Transfer Fees. (a) Pursuant to the authority conferred by Article 3, Section 8 of the Proprietary Lease, every sale of Shares of Stock in the Corporation shall be subject to payment by the seller to the Corporation of a transfer fee determined as set forth below. Full payment of the transfer fee shall be a pre-condition to the Corporation's obligation to permit and effectuate the transfer of any Shares that are sold.

(b) For the first sale of any apartment after reconstitution, the transfer fee shall be:

(i) 25% of the gross sales price for first sales made within 3 years after reconstitution;

(ii) 15% of the gross sales price for first sales made in the next 2 years; and*

(iii) for first sales made thereafter (i.e., subsequent to the first five years after reconstitution).

(A) 12% of the gross sales price if all the following conditions, in the conclusive determination of the Corporation’s Board of Directors, have been fulfilled: The agreement to sell has been signed by all parties and received by the Corporation’s Management Office on or before April 15, 2003; the Corporation’s sale application forms and supporting documents have been completed and received by the Corporation’s Management Office on or before May 15, 2003; and the closing of the sale has been consummated on or before June 30, 2003; or

(B) 17.5% of the gross sales price if all the conditions set forth in clause (A), in the conclusive determination of the Corporation's Board of Directors, have not been fulfilled.

(c) For the second sale of any apartment after reconstitution and all subsequent sales of the apartment, the transfer fee shall be 5% of the gross sales price regardless of when the sale occurs.

(d) On all sales or transfers as to which a transfer fee is to be paid, in no event shall the transfer fee be less than a minimum transfer fee. The minimum transfer fee shall be calculated as if the shares were sold for the applicable Minimum Transfer Fee Sale Price(s) set forth on Schedule A annexed hereto and made a part hereof. The calculation shall be done by multiplying the applicable Minimum Transfer Fee Sale Price for the applicable type of apartment by the transfer fee rate that applies to the sale as per paragraphs (b) and (c)

(e) If a tenant-stockholder sells the shares allocated to his/her apartment to a purchaser who is not, at the time of the closing of the sale, the tenant-stockholder of another apartment in one of the Affiliated Cooperatives (as hereinafter defined) and buys the Shares allocated to another apartment in any one of the Affiliated Cooperatives, the tenant-stockholder will be required to pay only 50% of the applicable transfer fee or, in the case of a sale subject to Section 5 (b) (iii) (B) of this Article VI, a transfer fee of 7.5% of the gross sales price, and the balance of the transfer fee otherwise due will be waived. However, if within 5 years of that transaction that tenant-stockholder sells the shares that were purchased and does not buy the shares allocated to another apartment in one of the Affiliated Cooperatives, that tenant-stockholder will be required to pay the other 50% of the previously waived transfer fee or, in the case of a sale subject to Section 5 (b) (iii) (B) of this Article VI, the entire balance of the previously waived transfer fee, which is payable to the cooperative that was originally entitled to received the transfer fee, and must also pay the 5% transfer fee due on the second sale to the cooperative in which the second apartment is located.

(f) If a tenant-stockholder, who is not buying the shares allocated to another apartment in any one of the Affiliated Cooperatives, sells the shares allocated to his or her apartment to a purchaser who is, at the time of the closing of the sale, the tenant-stockholder of another apartment in one of the Affiliated Cooperatives and the purchaser is buying the Shares for the purpose of residing in the apartment of the selling tenant-stockholder, the selling tenant-stockholder shall pay only 50% of the applicable transfer fee or, in the case of a sale subject to Section 5 (b) (iii) (B) of this Article VI, a transfer fee of 7.5% of the gross sales price.

(g) If a tenant-stockholder sells the Shares allocated to his/her apartment to a purchaser, who is at the time of the closing of sale, the tenant-stockholder of another apartment in any one of the Affiliated Cooperatives, and buys the Shares allocated to another apartment in any one of the Affiliated Cooperatives, the tenant-stockholder shall pay only 50% of the applicable transfer fee or, in the case of a sale subject to Section 5 (b) (iii) (B) a transfer fee of 7.5% of the gross sales price, and the balance of the transfer fee otherwise due will be deferred, and the tenant-shareholder will not be required to pay said portion of the applicable transfer fee until five (5) years after the date of the sale. However, if within 5 years of that transaction, that tenant-stockholder (A) sells, makes a gift of, bequeaths or otherwise transfers the shares that were purchased, (B) sublets or permits anyone not a member of the tenant-stockholder's immediate family to occupy the apartment that he or she has purchased (except as permitted by Section 235-f of the Real Property Law) or (C) adds the name of any other person other than his or her spouse (or any person entitled by law to be treated as a spouse) as co-owner of the Shares allocable to the purchased apartment, the tenant-stockholder must immediately pay the deferred 50% portion of the applicable transfer fee or, in the case of a sale subject to Section 5 (b) (iii) (B) of this Article VI, the deferred balance of the applicable transfer fee, which is payable to the cooperative that was originally entitled to receive the transfer fee, and must also, in the case of a sale or transfer of the second apartment, pay the 5% transfer fee due on that sale to the cooperative in which the second apartment is located.

12% & half off for insiders.

It was 25%, then 15%

Not sure why such a horrified reaction. AH's theory is correct, the numbers are a little off. The flip tax on the first sale post 1997 is between 12 and 20%, but is 5% on subsequent sales. So, there will be diminishing returns on the flips, and I suspect that the resale activity in the past 13 years outpaced the flips in the next 13 years. This means money must come from somewhere else.

Very interesting. I'm not convinced that maintenance will have to rise so much. 5% is still a lot of income, and it seems to me that there are still a lot of original tenant families in these buildings, and they'll still have to pay the 15% (but I'm reading quickly, may have missed something)?

Still, this is giving me pause, and I already was pausing.

Hillman is nice but I think the apartments are bigger in Seward Park and East River. East River is the nicest but far from the subway although there are buses.

I like the Deco-esque Amalgamated the best.

NYC_SPORT - you dont know about underlying costs. They may not have to "make up" the decrease in flip taxes if say the underlying mortgage is paid off, or if the lower flip tax allows for more sales and therefore similar revenues.

The point is that most of the users on this board are panicky out siders who think they know whats going on. Any reason to talk yourself out of buying....

These buildings are stable and nice places to live.

So petrfitz, what do you think was "made up" here re: the flip tax? Curious.

underlying mortages paid down, would also look at excess fund banked over the years, more units being flipped on a regular basis (i.e. i dont mind selling if I pay 5%, dont want to sell if I have to pay 25%....)more movement of internal owners - 1 bedrooms having kids upgrading to 2 bedrooms, etc

Sure, but what about the point that flip tax income got a nice bump in the early years and how are they going to keep mtce low with the decrease in flip tax income.

refinancing at historic lows.....etc etc

you are making an assumption that higher flip taxes in early years created more revenue than is being created by flip taxes now.

Sure. And can you correct me otherwise?

1997 = $200 * .2 = $40k 2010 = $700k *.05 = $35k

You forget volume?

nope - there is more turn over in these units now then ever before. so more sales and more flip taxes at 0.05% than there were at %20. also most of these buildings have paid down the building mortgages and refinanced at significantly lower rates.

Please provide argument and data for the opposite....

Is there an OL source for the financials? The bottom line is, petrfitz, I don't know and I am willing to admit and backup with anything I find. You don't live there, and unless you're Jacob Goldman, I don't see how you know what each line item is either.

If there are potential buyers, I would advise you to talk to the Loho Realty people. I don't know them but I know they do a lot of biz in the co-ops and would be better able to advise you as to the real financial picture. They've also sold a lot of product, so should be very familiar with the financials.

Abcat: talk to Jacob at Loho. www.loho.com. I am not affiliated in any way.

yeah talk to a broker they will tell you honest information. I prefer to talk to the numerous people I know that live in these buildings and are active on the boards........

Oh, and if you're going to throw numbers at me, do 'em properly.

1997 - 200 X 0.25 = 50k

2010 - 700 x 0.05 = 35k

15k diff. So hell ya, better have a lot more volume.

It's summer, go for a run/walk outside and yes, I know they have wifi outside.

Abcat: don't take their word - they do so many transactions, they should let you peek at hard copies of financials if they won't let you have a copy.

how do you account for the fact that most of the initial sales were within a family at $1 or significantly lower than market rates? where as now almost all sales are not within a family and at market rates?

am I am outside - sitting on my roof deck looking down at you

"within a family at $1 or significantly lower than market rates?"

... actionable if the board approved a sale like this. Taking food from the mouths of penniless little old ladies.

Oh, and get back to your roofing work. Torch that tar.

Hm, very interesting tempest stirring about this, I had no idea feelings ran so high--it sort of replicates what happens to my brain when I start obsessing about real estate. In any case, I appreciate all the feedback.

I have talked with Jacob, but wanted other voices since he's very committed to the neighborhood and buildings and making a living of course. And I'm thinking of making what feels like a big leap into a new neighborhood for me.

I live down in this area- in Seward Park Coops. The area has changed much but there is still the occasional group of loudmouth kids and crazy types that roam the streets at odd hours. I believe Hillman and East River is runned by Heshy Jacob, under what I believe, his sole control. Seward Park was under Jacob but is now on its own managed by Greenthal. Seward has been run like crap until recently when a new slab of board members took control and the building is now operating much, much better in all ways under this new leadership. It could use a renovation to its lobbies tho.

I believe these building have always had artificially low maintenance because of the high flip taxes support, which is, of course is financially imprudent. But what you save in mortgage you ultimately pay back in flip taxes so you can think of it as coming out even at the end.

I would be careful dealing with Loho, which does not always have the best reputation in terms of being on the up and up about things. I would contact Neal Young and Jeremy Bolger at Halstead who does alot down here
http://streeteasy.com/nyc/profile/823844-neal-young
or Karen Skurka at Elliman, who used to be active in this area
http://streeteasy.com/nyc/profile/819240-karen-skurka

I second pface's opinion on JG. I get bad vibes from that guy.

I've always heard the same thing, and let's face it, LoHo's coziness with the boards of several large complexes of several large buildings each cannot be a natural or healthy thing.