From Riverdale to Hudson Heights: A 3-year plan

1. Yes, it would be more difficult, and YES, boards like mine most certainly be looking at you as a potential "investor". Major red flag.

2a. Your income. Unless you can prove at least a 5-year track record earning at the six-figure level, it's going to be an uphill climb with any board.

2b. Your "excellent" credit, believe it or not, doesn't hold as much weight as it might have just a couple years ago; with so many people having trashed credit histories through no fault of their own just because they lost their jobs, people with good credit are viewed these days as merely "lucky". It's a plus on your balance sheet, but like your SAT scores, don't hang too much weight on it anymore.

2c. So assuming it's three years later and you're carrying some $80K in mortgage debt (and I'm assuming you have NO other debt), at $120K/year you'd be able to borrow an additional $160K. Unless you're somehow planning to squirrel away $300K as a down payment on that big one bedroom in Washington Heights, I don't see how you could possibly afford to buy another apartment.

3. Yes, Riverdale boards for some reason are inordinately difficult. And since most of the housing stock in the hood is co-ops, it's extremely unlikely you'll find any co-op that allows completely unrestricted sublets; that's contrary to the whole point of a co-op in the first place. People buy into co-ops so they're surrounded by other owner-occupants, not a bunch of renters.

I hope I was gentle enough. ;)

Add in 1) a transition problem: you can't get financing/approval for HH without a signed lease on Riverdale. Whoever rents Riverdale is presumably going to want to live there, and doesn't really want to wait three months for you to close on Hudson Heights, so in practice, you're living at your parents for three months in between the two deals.

Also, 2) you're making two gigantic assumptions. One is that these current low mortgage rates hold for three years, and one is that Hudson Heights doesn't go up in value relative to Riverdale.

No one can predict the future, but I think that both of those assumptions are wrong.

If it were me, I would buy a studio now (or a year from now, depending on how long it takes you to add to your nest egg till you feel comfortable) in a building you like in HH. When you buy, your costs won't be "cheap" -- but they'll be close to locked in (maintenance always goes up) at about what your current rent is. You then have the option to swing the studio to one-bedroom trade-up in about seven years, depending on what has happened to your income.

But if the market moves one way or another, presumably your studio and your target one-bedroom will move somewhat in step with each other.

ali r.
DG Neary Realty

don't buy a coop assuming you'll rent it out someday

Frankly, with only about $40K in the bank now, you're really not in a position to buy anything, anywhere. Find a cheap rental and start saving aggressively.

you can buy with $40K in the bank

You can buy WHAT with $40K in the bank?

A. You'll need to pay at least $5K in closing costs. Now you're down to $35K.

B. Any co-op board is going to want to see at the very minimum 6 months' worth of maintenance in the form of post-closing liquidity. Even at only $500/month, that's $3,000. Now you're down to $32,000.

C. You're going to need at least $5,000 to MOVE. $27,000.

D. It's just plain stupid for anyone, let alone a homeowner, to allow his savings account to dip below $5,000.

That leaves you a grand total of $22,000 for a down payment. And $22,000 is 20% of ... $110,000. Good luck trying to find anything in RIVERDALE for $110,000.

Matt - are you in fact incredibly stupid?

http://streeteasy.com/nyc/sales/riverdale-bronx/status:open|type:P1|price:-150000?sort_by=price_asc

NYCMatt
about 4 hours ago
stop ignoring this person
report abuse

2b. Your "excellent" credit, believe it or not, doesn't hold as much weight as it might have just a couple years ago; with so many people having trashed credit histories through no fault of their own just because they lost their jobs, people with good credit are viewed these days as merely "lucky". It's a plus on your balance sheet, but like your SAT scores, don't hang too much weight on it anymore.

This is completely assinine. I deal with buyers and renters every day. Not once have I heard someone with excellent credit considered "lucky". And the past couple of years doesn't excuse anyone for not paying their bills with landlords or owners, banks, etc. Where did you come up with this?

"This is completely assinine. I deal with buyers and renters every day. Not once have I heard someone with excellent credit considered "lucky". And the past couple of years doesn't excuse anyone for not paying their bills with landlords or owners, banks, etc. Where did you come up with this?"

Aside from various business journals, conversations I've been having with other board members.

wellheythere ... most of those listings are more accurately termed as "live-in kitchens."

Matt, OP stated $100k studio in Riverdale..

kinda shocked they exist at that price considering Riverdale, but I guess it's still way uptown bx holla..

If OP rented at 3 years at $1,100 no rent raises, that's $39,600..

highly subjective but if I were OP I'd do it (assume 40k is cash only, not SEP-IRA, and he finds a co-op that allows sub-lease post 2 yrs), considering he admitted he hasn't been saving..

OP when the time to move to WaHi comes, depreciation on your BX prop is your friend, just talk about recapture if with your CPA, but if you're set on nyc shouldn't pose much an issue

How do you know he needs $5K to move?
How do you know he can't get a studio for $100K?
How do you know he can't get a condo somewhere for 5% down as a "qualified first-time buyer"?
How do you know he doesn't like live-in kitchens?
I would not want to be in this rental market.
A self-employed person could also do some homework at county courthouses, find out when the auctions are.
OP thinks outside the box, is creative, self-confident, determined and optimistic.

"How do you know he needs $5K to move?"

EVERYONE needs at least $5,000 to move.

***
"How do you know he can't get a studio for $100K?"

Excuse me. A LIVABLE studio.

***
"How do you know he can't get a condo somewhere for 5% down as a "qualified first-time buyer"?

I wasn't aware that banks were still stupidly offering 95% mortgages.

***
"How do you know he doesn't like live-in kitchens?"

He said he's gay.

Matt, you need to get out more. There's a whole wide world out there. You may have been young once too, and if you can remember that far back, there's things like U-Haul, friends' cars and muscles.

Yes, you can get 95%. There are new condos that advertise that, at least ("for qualified first-time homebuyers").

I gather you don't want this prospective buyer anywhere near your coop, but try to encourage him to at least aspire to be one of your applicants someday. It's so unseemly to hold Hudson Heights out as Fifth Avenue.

NYCMatt: The whole point of my post was that there are lots of properties in the <125k range in Riverdale/Kingsbridge. A quick SE search shows 78 listings in Riverdale/Kingsbridge under 150k, 17 of those are under 100k. And let's face it, it's a buyers market and those are asking prices. So yea, I can buy now, have plenty of savings leftover, and dazzle the coop board with a 10:1 income/debt ratio (assuming $1000/mo mtg/mtc). Speaking of income, I don't have the past five years all at six-figures (I was still in grad school five yrs ago) but I'm on an upward trajectory, past 3 yrs solidly over 100k and going up. Business is booming! DO you think I really need five years of 100K+ income to get approved for a 100k co-op?

All of you predictably jumped down my throat at the thought of renting out a co-op, especially one in Riverdale. You have to remember that's my PLAN B! I'm not buying an "investment property" for the sole purpose of renting it out. My original plan is to buy, then SELL when I'm ready to afford Hudson Heights. Hopefully the market will recover... I'm not making predictions. If I can't/don't want to sell, then I'll sublet Riverdale and try to buy in HH.

Put aside for a second your opinion on whether or not I'll be able to sublet a place in Riverdale. Many Riverdale co-ops have rentals available (not just sponsor units). So yea, I know the rentals exist... I wasn't asking if they do... It's been done. Case closed. Check SE right now... there are plenty of rental listings mostly in co-op buildings. I was wondering which buildings to avoid because of Riverdale's reputation.

Also, I'm more interested the part of Riverdale bordering Kingsbridge, close to the 1 train. The nicer parts of Riverdale (up the hill, near the Metro North in Spuyten Duyvil) undoubtedly have the tougher boards. I particularly like 6035 Broadway, which is 1 block from the last stop on the 1 train and across the street from Van Cortlandt Park. There is currently a 550sf 1BR listed at $119K, 545mtc. I know that's a priced a little higher than I originally posted, but I also posted that I was looking for studios, which are obviously less expensive. There's also a 900sf top-floor 1BR with park views at 199K which looks amazing. I know that's a bit out of my range right now.. but wow!

I love the post about "live-in kitchen" hah! never heard that before. But that's what I have now... I will need at least 400SF in my new place. So, yea a straight studio with a separate galley kitchen will be fine.

I see a good opportunity in Riverdale: I can buy a place NOW and spend $800-$1000 out of pocket. That's much cheaper and smarter than renting, even in this tumultuous market. The best time to buy is when you can afford a home that you like. I am seeing some really great places at sensible prices... so for me that time is now. Especially given the extremely strong rental market and the ridiculous prices being charged all over the city including in my building. My question wasn't about whether or not I could afford to buy now... but what will happen down the road if I buy and decide to hold if it's not the right time to sell but I'm ready to upgrade.

NYCMatt: My most recent move cost me around $1,000 using FlatRate. Remember, I'm moving from a roommate situation in Chelsea to a studio on the Upper West Side. I don't have much stuff.

ali r: I'd love to buy a studio in HH. That's a great idea. But you just get a lot more for your money in Riverdale... but I'm definitely looking at all options. Yes, if I were to rent out the co-op, I'd sublet a rental for a few months during the transition period.

So, now can you guys please answer my original question:
IF for some reason I don't want to/cannot sell Riverdale in 3 yrs:
I know that the mortgage/maint on Riverdale will count as DEBT in my debt/income ratio when trying to buy another place. What portion of the rental income will count towards my income? I know that even the toughest boards will count some percentage.

Or if you can't stomach the fact that it's a co-op, imagine that it's a condo... how does the co-op board/bank view a condo, or other rental property when evaluating debt/income ratios?

thanks!

>Matt, you need to get out more.

1 - Matt spends a lot of time on the subway to Washington Heights
2 - Matt's employer is messing up his body clock

ha ha ha, "everyone" needs 5k to move. That must be a joke. Our last move was bonded and the whole shebang for half of that.

OP, as much as I love HH, I would seriously reconsider the neighborhood if my work took me to the UES regularly. It is a serious PITA to get there; a neighbor who does it daily resorted to driving after trying every combo of subway/bus/walking.

Don't buy a coop.You have enough to finance a nice condo (much more flexible if your life situation chages: moving, marriage,etc).Get a preaproval letter from a mortgage broker and start looking: with that credit score/income you will have NO problem.
Chinese movers can do it for 500$ (I moved an entire loft for that price).

Maybe the answer is to start by renting in Riverdale. First off, it will tell you if it is where you would want to own while saving you $800-1000 per month. You should be able to park there for free or cheaply. You will also learn which buildings you like. There are a bunch of condos in Spuyten Duyvil area as well as the White Hall and the Hayden House, amongst others. I also think prices might come down at some point because there is a LOT for sale in the various buildings. There certainly seems to be no rush in that neighborhood.

Another question - Do you want to live there? Riverdale is a pretty sleepy community. Always has been and probably always will be. But if you want access to the north and west of the city it can't be beat as a city neighborhood and it has plenty of transit choices. #1 train, which is a 10-15 minute walk from most parts of Riverdale, 20 from others, or a bus ride, but is fairly slow going into the city since it is a local, though you can switch to the A at 168th. There are express busses and Metro North, and on a weekend you might rather drive to Manhattan than use mass transit. 10 minutes to the UWS.

>Chinese movers can do it for 500$ (I moved an entire loft for that price).

"Chinese movers can do it for 500$ (I moved an entire loft for that price)."

If you have nothing of value, then go for the Chinese movers.

By the time you're over 35, however, you're likely to have outgrown your disposable Ikea furniture and need movers who are used to handling expensive items.

well, OP may have Ikea furniture, or none at all
an interesting implied definition of "gay" you posted, Matt, someone who could NEVER live in a live-in kitchen. I guess that leaves out of the definition of "gay" many, many, many single males I've known over the years. I wonder what they really were. They surely gave me the impression they were homosexual, at least.

Well i mention the chinese movers for lack of a better term.
I'm 46. my bf is 29, chinese.I'm compulsive and need to plan everything.So as I travel a lot my bf was "in charge". yet the day before the moving no arrangements had been made.I was nervous,he was not.He called on the spot and secured the truck/movers for the next morning.cost: 250.
The movers were on time,father son and another.Father is an engineer (true?).they did a fantastic job.I do have very expensive art including original wooden buddhas that are centuries old.loft furniture can be big and some had to be moved thru the staircase (6 floors).no complaint.it took 10 hours (midtown to midtown).
we fed them and gave an extra 250.
I say all this because there is no need to spend thousands when u don't have to. I now use chinese pros for almost everything (window dressing, furniture repair,and of course fresh food, massages, facials...):midwest prices in the middle of it all.

I find it amusing that NYCMatt is always so proud that he is over the age of 35. Good for him, a real accomplishment. Except that now the body clock gets messed up more easily.

"an interesting implied definition of "gay" you posted, Matt, someone who could NEVER live in a live-in kitchen. I guess that leaves out of the definition of "gay" many, many, many single males I've known over the years. I wonder what they really were."

Crack hos?

I don't understand the purpose of the Riverdale apt? Is it to lower your housing costs? Why not rent in Riverdale - same result, and you're not tying up your savings.

i found Matt's gay comment hilarious albeit ironic.

...considering many a gay forgo a 1BR or even 2BR abode way uptown where he lives to live in a pricier "live-in-kitchen" in hell's kitchen to be much closer to work/sex/restaurants/sex/Grind boys/more time saved relaxing vs sitting on an express train for general relaxing/sex/etc..

using his mentality the gay dude living in a house in westchester county, must look at the same gay dude in a 1BR in WashHi to be a "crack ho"?

right.

"using his mentality the gay dude living in a house in westchester county, must look at the same gay dude in a 1BR in WashHi to be a "crack ho"?"

Gay "dudes" don't live in houses in Westchester County unless they're pretending to be straight.

"Gay "dudes" don't live in houses in Westchester County unless they're pretending to be straight."

yes because no gays work outside of Manhattan..

and all gay dudes who prefer to live in Hell's Kitchen can economically do so..

why any gay priced out of Hell's Kitchen would move to Astoria, Grove/Jersey City, Washington Heights, or even Yonkers is downright self-loathing.

I agree, you should leave your gay card (or entertainment card, considering your career/uptown abode) if you choose to move north of 57th street whether for economic or personal reasons.

At least SOMEONE is catching on ...

and yes I'll agree with you by wrongly stereotyping my people that if things permitted we'd probly all want to live in the West 50's of Manhattan..

.. and if unable to live inside the coveted 'nabe some of us buy larger units (even extra space unneeded) to overcompensate for the fact when you tell your friends what uptown stop to get off for your dinner soiree, hoping their brows stay level.

kudos to OP for not seemingly caring so much about such things.

actually hol4, a lot of gays seem to already live uptown. particularly if they're couples. imagine they do it for the same boring reasons us straight couples do it for: space and leaves an enormous amount of income to travel, own a second home, buy art, etc. i hope this trend continues as it has really changed my social life. it's wonderful to have dinner parties in my area instead of trekking out and around the city. I do however agree that a very, young single man who loves to party might dismayed at the lack of clubs.

What nyc10023 said: an interim Riverdale apt unnecessarily complicates meeting your goal.

At your income assuming you pay taxes, you should be saving $15-20K a year until you retire. The problem with your plan is that you're thinking to drop your housing expense by ~$1K a month to help boost your savings, and then go back to spending $2K a month in the form of a purchase. Long-term, that leaves you stuck without proper savings.

My suggestion is for you to see if you can save $20K a year while spending $1850 on rent. So that means $20K saved, $22K on rent, and $30K for everything else. If you cannot do that, you are overstretching yourself long-term. If you can, then you'll have your downpayment in 3 years. But don't make plans to properly save just for 3 years to enable a purchase, and then go back to under-saving.

The world is going to end in 2012 anyway.

Whoever dies with the most money wins.

Whoever dies with the most toys wins.

Yeah, seriously, what good is the money if you don't use it on toys. inododo once again with ill-fitting advice.

Oh, but he could have rented the toy.

The point of my post is that there are lots of properties in this price range in Riverdale/Kingsbridge (78 under $150k, 17 under $100k!). And let's face it, it's a buyers market and those are asking prices. So yea, I can buy now and have plenty of savings leftover, and dazzle the coop board with a 10:1 income/debt ratio (assuming ~$1000/mo mtg/mtc).

Example: 6035 Broadway looks decent. Apt 2H is a 500-sf studio (about twice the size of my current 250sf live-in kitchen) current price: $85K, $350/mtc. Put 20% down, comes out to $750/month out of pocket, about $1,100 LESS than what I’m paying now. It’s across the street from the 1 train = easy commute to the West Side. Hop on the MetroNorth at W225th for East Side access.

You guys predictably jumped down my throat when I mentioned the possibility of renting out the apartment in the future. Please remember that’s my Plan B! I’m not trying to buy an “investment property” for the sole purpose of renting it out. If I wanted to do that I’d save some more $ and go try to get a condo (the cheapest condo in Riverdale is currently $184K). PS there are tons of rentals in Riverdale co-ops… so some boards do allow rentals. Anyone know which boards are easier than others?

The reason I asked about keeping the property is because what if property values continue to slide (as they might) and I’m ready to move in 3-4 years? I won’t want to sell at a loss… but if I keep it, how will the rental payments be counted towards my income? It looks like banks use 75% of the rental income.. but what about co-op boards? (Yes, I realize the mortgage/maint will be counted on the “debt” side.)

NYCMatt: I’m moving from the Upper West Side, not West Hollywood. $5,000 in moving costs? Come on. I don’t have a collection of ming vases like the one you have up in the Heights. Also, do you really think I need to show $100K+ income for five consecutive years to purchase a $100K co-op? I have better job stability than anyone I know; my income comes from 20-30 sources (my students) rather than just one. And yes, I have one of the only jobs on Earth for which SAT scores do in fact matter (luckily my SAT scores are fantastic!).

hol4: Nothing says “fabulous” like a walk-up studio in Hells Kitchen. LOL. Just kidding… but on a 400K budget there’s not much else, besides possibly a straight studio in World Wide Plaza (I’m not opposed to it, but I really want to purchase at least 1 bedroom, I plan to stay a while.)

After reading a few comments I’m starting to rethink Washington Heights. Although I think the neighborhood is great, my commute would be horrible as one person mentioned. Can anyone suggest an alternative to Riverdale that would give easy access to the East AND West Sides? Brooklyn/Jersey are just too far. I was thinking Queens but getting there from the West Side would be a pain. That leaves us with the Bronx…

I walked around Grand Concourse near Yankee Stadium at night and felt completely safe. Beautiful art deco buildings. Gorgeous parks and government buildings. Does anyone else see the potential in this nabe? Currently on the market is a 90K studio at 800 Grand Concourse with valet parking!

ms_71 - yes, I see potential in that nabe - the transportation advantages over Wash. Hts and Riverdale/Kingsbridge are too obvious to mention, but we don't talk about that here. The good thing about Wash Hts and Inwood is that there are two lines, so if you get fed up with one you can try the other. The bad thing about those areas is that both lines go down only the West Side of Manhattan, but it's not a terrible thing. Still, put yourself across in the Bronx and you've got the direct Lex option, and it's even geographically a little closer.

About renting the coop, I offered you that advice because of the risks many people don't see, and I knew it was only your Plan B. If the economy tanked so badly you were stuck with the studio, it would be every bit as much of a white elephant offering it for rent as trying to sell it. If it were to come to that, you might wind up kicking yourself for not having just stashed more cash in the bank rather than trying to build equity in a coop. I wouldn't take the discouraging words from board members too seriously.

And about "gay" and "live-in kitchens," that's a laugh, because not only was Hell's Kitchen almost entirely walkup tub-in-kitchen mini-apartments until the recent building of highrise luxe apartments, but .... what on Earth do people think apartments were like in the Village back when it was a "gay ghetto"? How about Chelsea. What a laugh. Well, it's nice to see that the movement has progressed so much in 30 or 40 years' time that people no longer remember that the "ghetto" part of "gay ghetto" referred to more than just homogeneity of tenant, but also to the decrepit state of housing.

"Also, do you really think I need to show $100K income for five consecutive years to purchase a $100K co-op? I have better job stability than anyone I know"

Yes, you do.

And as a board member I've heard the old story about "job stability" from everyone from doctors and lawyers to corporate and media types to educators. Guess what? NO ONE has job stability. Show us a track record, though, and you might have a shot.

Good luck.

"what on Earth do people think apartments were like in the Village back when it was a "gay ghetto"? How about Chelsea. What a laugh. Well, it's nice to see that the movement has progressed so much in 30 or 40 years' time that people no longer remember that the "ghetto" part of "gay ghetto" referred to more than just homogeneity of tenant, but also to the decrepit state of housing."

I never considered it.

Then again, I've always been fortunate enough not to have done the "starving artist" thing in NYC.

NYCMatt: Everytime you post something it makes me want to save save save more money so I can afford to purchase a condo and thus eliminate any possible interaction with a co-op board like yours! Can someone else please comment so I'm not left to think this way?

And regarding track record? Five yrs ago I was still in grad school thus wasn't making the same $$ I'm making now. Since I would only need to be making $50K to clear 4:1 ratio (based on $1000/mo mtg/mtc) my impression is that I should be fine as long I'm above that level for the past few years. Why would I need to be at the 100K+ level?

"Why would I need to be at the 100K+ level?"

You were the one crowing about your six-figure income. You tell me.

And I was referring to your getting past the Washington Heights board -- presumably after you'd already purchased in Riverdale and have $100K of debt on your back already.

NYCMatt: I thought you were saying that I'd need to have 100K+ for five yrs to buy a 100k apartment. That didn't make sense.
In three years' time I'll have the kind of track record you're talkin' about.

"In three years' time I'll have the kind of track record you're talkin' about."

Hopefully.

Can anyone suggest an alternative to Riverdale that would give easy access to the East AND West Sides?

Try Pelham Parkway in the Bronx.

"Can anyone suggest an alternative to Riverdale that would give easy access to the East AND West Sides?"

Brooklyn Heights.

ms_w71

Matt is only one member of one board. Don't fret it. And yes, I totally agree that it's worth buying a condo to not have to deal with a certain attitude. By the way, coops have sponsor sales, in which boards have no say. And the run-up in prices in HH coops is recent. It was such a bargain only a few years ago compared to now that there are doubtless board members who would not today meet their own criteria. You need to concern yourself with how to qualify to a lender, and self-employed qualify for mortgages all the time. Just show income for however many years satisfies them. And a corollary of Matt's statement that no one has job stability (I agree with him 100%) is that what's true for the self-employed is just as true for W2 employees.

"Can anyone suggest...."

Obvious - the West Bronx anywhere from 149th Street to Norwood, where you have the B/D and 4 within walking distance of each other. Or the East Bronx neighborhoods serviced by the 2/5. Or Central Harlem, halfway between the 4/5/6 and the 2/3. But Bkln Hts still wins, or somewhere around BAM.