70% Down Payment Effect

"Why is 70% adventagious for a coop? Would this not ultimatly diminish the value of the individual units and reduce the flip tax collected for the general fund? Is there any advantage in buying into such a building?"

In order:

1. It keeps out the riff-raff.

2. Not necessarily. These apartments typically fall under the category of "if you have to ask, you can't afford it."

3. See #1.

From what I understand, these are imposed by the lenders. Due to various undesirable characteristics of the bldg. (e.g., the sponsor owns too many units, bad financials, low owner occupancy, etc.), lenders won't lend more than 30% of the purchase price.

I have seen some beautiful coops and condos with these requirements, and this is the explanation I was given by the brokers there. Since they basically have to look for cash buyers, you can find some bargains.

it is actually either what Matt said or Clinton.

one set wants the riff raff out and the other set is screwed because the building is not sold enough to get financing. at least with the later, as long as the sponsor is selling units, you can get to a point where the apartment will be worth more once the threshhold is met.

all are wrong

many of the most financially impeccable coops require all-cash---coop owners are communally exposed to one another, so the greater the minimum equity required, the less the exposure---be wary of coops with low equity reqirements, especially in bldgs with few units---can be a nightmare

True, but some all-cash co-ops will let you use your shares as collateral for a loan after the purchase.

E.g., check the UCC1/UCC3 pattern at the all-cash 834 Fifth.

This 'intentional' coop was built in 1952, The property is 60 Sutton Place South #15BN. The building looked to be in excellent condition with reasonable services. Not too exclusive or over the top desirable. Any insights?
I would think that this would do damage to the value of the building and make sales very difficult. I don't think there is any sponser involvment that I know of.

It's a 30%-down, 70%-financing-allowed building, so pretty standard. The range seems to be 20%-30% before you hit fancy.

All make good points, but historically, I feel that Matt pretty much nailed it. Many of these 50-70% down coops were converted long before most of us were even born. Although they didn't use the term "riff-raff", it was more like "mastering social grace" or "desireable lifestyle". Also, as I was told by elders, it was a safe bet that these were dull buildings. Come to think of it, that's probably why we lived in a house.

NWT...it's a 70% down, 30% financing building

NWT...I think you're right.

But the Corcoran listing says it's 30% down: http://www.corcoran.com/property/listing.aspx?Region=NYC&listingid=2294942

Halstead says 70% financing allowed: http://www.halstead.com/sale/ny/manhattan/midtown-east/60-sutton-place-south/coop/1924729

Not that they're definitive....

70% down payment should be enforced nation wide

By whom?

http://www.google.com/search?q=caonima

>The property is 60 Sutton Place South #15BN.

They allow rentals, and there are numerous apartments less than even $1MM. Can't be that exlusive.

It's 30% down...I was asleep at the wheel.

Falco, I thought you were dreaming about a terrace, not a balcony. Keep looking, it will happen