My partner and I were looking at an apartment in Sunnyside and have gotten pretty serious in the negotiations. But then we realized that the building sponsor owns more than 50% of the building, so a lot of banks won't do that loan since it doesn't meet Fannie Mae guidelines. In fact, only one out of the six major banks we asked so far will even consider making us a loan. We thought we were getting... [more]
My partner and I were looking at an apartment in Sunnyside and have gotten pretty serious in the negotiations. But then we realized that the building sponsor owns more than 50% of the building, so a lot of banks won't do that loan since it doesn't meet Fannie Mae guidelines. In fact, only one out of the six major banks we asked so far will even consider making us a loan. We thought we were getting a good deal at $257 per sq ft. The maintenance is pretty reasonable as well. However, we don't plan on living there for more than 5 years (if that), so we are worried that when it comes time to sell, it might be very difficult for future buyers since it's so hard to get a loan. After two years We should be able to sublet indefinetly if we need to.
The sponsor needs to sell 5 or 6 more units to get below 50%, but so far they have not shown any signs of selling.
So what do you guys think? Is it a good investment? Is it worth the risk?
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Response by bugelrex
over 15 years ago
Posts: 499
Member since: Apr 2007
How much is the rent + CC?
Not taking into account tax deductions, if its less than the mortgage with 20% down then it a good deal period.
If its more, then it should be a place you want to live for a long time (not flip or make money from rent)
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Response by ab_11218
over 15 years ago
Posts: 2017
Member since: May 2009
if you're planning on living there less then 5 yrs, then walk away. selling those types of coops is extremely difficult. most of the time, they trade at 20-40% discount. this % goes up with the sponsor ownership. also, most of the deals are for cash. only during the roaring 2004-6 period would banks lend to some of those coops, but not many.
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Response by luckyhusky
over 15 years ago
Posts: 3
Member since: Aug 2010
I think we should be able to break even on the mortgage with the rental income if we sublet the apartment. But since it is a co-op, I hear that even renters have to go through board approval. So it becomes harder to rent and you can't charge as much.
How much is the rent + CC?
Not taking into account tax deductions, if its less than the mortgage with 20% down then it a good deal period.
If its more, then it should be a place you want to live for a long time (not flip or make money from rent)
if you're planning on living there less then 5 yrs, then walk away. selling those types of coops is extremely difficult. most of the time, they trade at 20-40% discount. this % goes up with the sponsor ownership. also, most of the deals are for cash. only during the roaring 2004-6 period would banks lend to some of those coops, but not many.
I think we should be able to break even on the mortgage with the rental income if we sublet the apartment. But since it is a co-op, I hear that even renters have to go through board approval. So it becomes harder to rent and you can't charge as much.