Am on verge of entering contract

What's the maintenance like? Cheap maintenance + funding repairs with assessments has some benefits versus expensive maintenance and large reserves, depending on your philosophy. High maintenance + assessments is a killer, though.

Pay particular attention to the capital improvements that are coming up. Those which were recently done obviously should be okay for a while. Especially look at whether the facade has been maintained. Local laws require very extensive facade work lately and it is EXPENSIVE. The reason you are paying close attention to the capital improvements plan is that each project will be costing you money. Your budget, if you are buying in this building, sounds like it MUST include several hundred dollars a month that could be needed for a special assessment. If a special assessment would kill you financially, then this building is going to be a problem for you since it seems likely they will be imposing them often. But I have little hard info here, so take this with a grain of salt and see what the financials and minutes reveal.

Listen to Kylewest.

If you plan on staying for 7-10 years, congrats.

Thanks so much for your helpful comments. Maint is on high side ( about $2.50/sqf - floor plan is not correct, so guessing at size). Utilities are included in maint. Recent assessments have run about 100 - 150 a month. Will get longer term picture shortly. I just built that amount into my expenses (plus 5% maint increases each year). That I can handle. However, if huge projects needed that would cause $500 or more assessment monthly- well that would make me uncomfortable. I'm pretty fiscally conservative, so while I could afford that - it would really cut into my ability to save and have a life.

And I do plan to stay for the long term

You sure you want to get into a situation where $500 is going to make or break you? Seems like a stressful way of living your life. The city is meant for dating, sex, and spending. Not saving. If you want to save, buy a property outside the city for 1/4 the price.

kylewest is correct, as usual.
The facade work ran my building 80k. (It's not that big of a buiding so others may cost more.)

When was the elevator last replaced? The lobby and/or laundry room, hallway redone?
My building raised the cc. and began billing an assessment of over $100, to be continued for 3 years.

Good luck,new2RE.

Thanks so much Truth. Elevators done last year, water towers replaced this year and major project (building pointing done for some $3 million or so about 6 years ago). Hallways done last two years, but are pretty bad. Carpet will definitely need to be redone soon. The Lobby of this pre-war is beautiful and laundry room is fine (co-op operates this and making small profit). My lawyer said the upkeep on building is really good and he was surprised that there were only a few, minor citations filed with building apt for building this size (over 400 units). I will be going through the minutes on Monday. I will definitely be looking for issues pointed out by KW.

new2re, I would measure the apartment first (to be generous - middle of the exterior wall to middle of the exterior wall, every thing included including closets and interior walls). Also, maintenance is very high. Ii should not be any more than $1.75 per sq ft for a full service building. Hope you are getting a big discount in price per sq ft for the area due to high maintenance. Also, assuming the one you considering is an alcove studio (called junior one??). In my view, for most people these tend not to be long term living arrangements. If I were to be in your shoes, I would consider a condo not a coop so that you can rent it out if your needs change.

Thanks to all of you for your sage advice. I ended up walking away a month ago because the answers I got were pretty unsatisfactory. When asked about recapitalizing the reserve fund, the managing agent responded that they just refinanced and the additional borrowing would go to the reserve fund. Was not really happy with this response - isn't this rationale how the US found itself in so much trouble? The seller's agent just contacted me and offered a lower price, still not interested. I found another great apt - will be back on this board shortly to ask some questions and get some feedback. Thanks again

Good luck with the next one,new2RE.

There's always something better for you out there these days.

new2RE, sounds like you made the right decision!

Sometimes buildings where maintenance is already on the high side are better off borrowing to boost reserves. It can be the least of all evils when the alternatives are big assessments or raising maintenance to unsellable levels. Of course, it's better to avoid these situations if you can. Congrats on your decision.

Good decision. Once maintenance fees get over $2.00/sq.ft. you enter a realm that is not healthy. I wouldn't sign on for that. $2.50/sq.ft. is nuts and can only get worse. Couple that with low reserves and history of assessments and you have a lousy recipe for preserving longterm value or peace of mind. RE decisions are part emotion, but much much greater part common sense and math. You give a good example here of even were one to fall in love with a place after 3 years of searching, there is never a reason to abandon good sense and buy into undesireable financials in a building.

Call me if you're looking to get a mortgage when you purchase.

Close my loans with Wells Fargo.

Ellen Silverman
Mortgage Broker
Tel: 212-786-9682
www.esfunding.instantlender.com

I feel like I did the right thing. KW - you are so on target. My final decision was made when I realized that I would worry about how the building was being run and why, despite much shareholder discontent, the board composition had not really changed in almost a decade, Many thanks to all

It will all be good for you,new2RE.

new2RE, what building was it and where did you end up living?

Truth-thank you for your advice; it definitely played into my final decision. The bldg was 320 east 42nd. I have not entered into a contract on the new apt

Lad - thank you as well

The prices in that building are very low, no? I think the quality of the prewar character to the building is properly discounted for the slightly high maintenance. Barring any serious maintenance issues with the building, it looks like a decent value. It does have a high number of apartments listed that have been on the market a long time. Maybe that reflect entrenched management concerns. A building can be managed to boost value or it can be managed to the benefit of insiders.

I don't think the prices are low enough, given maintenance and assessments. I just felt there was risk involved and the price did not compensate for it. Clearly, I am not alone on this. The building is beautiful and the staff is great.

I notice that in the building description, no subletting is allowed for any purchaser after 2002. Not even after you live there for a period of time. I live in a co-op but would never buy if no subletting was ever allowed.

Question Please:
When considering formulas for calculating monthly maintenance, are there other variables that will come into play?
Such as a high floor, or a terrace, or?
Or are the calculations based solely on square footage, or number of shares in a corporation?

lovetocook - yes, no-one buying after 2001/2002 is able to sublet. This is one of the risks that needs to be factored in, particularly since these apts are small.

nDnD - the co-op states maint as per share amt. In addition to the size of unit, the number of shares designated to a unit (usually set when bldg went co-op) will increase for positive attributes.

That's why new buildings are better.

thanks n2

In coops, the number of shares were usually increased by floor, so t
an apartment on a higher floor has higher maintenance than the exact same apartment lower down. Terraces usually add substantially to maintenance (and somewhat unpredictably ) as the "formulas" used for share allocation are, and were, very Lucy goosey and seem to differ widely.