Question About All-Cash Offer on Co-op

Depends on where it is. In a typical, nice $500k 1 bedroom, three times the maintenance should be fine. You seem to be fine.

Thanks saiyar1. I'm interested in areas like Tudor City, Turtle Bay, Murray Hill, Midtown East, etc.

With that kind of post-closing liquidity; you should be fine on the numbers. The thing to worry about now is character -- since you are paying cash, you are not being vetted by a bank. Are your financial holdings in the U.S.? Is your source of income of good character? (it's illegal to discriminate on the basis of employment, but a board can turn you down if you've been running a business that illegally avoided taxes). Are your taxes and reference letters strong?

ali r.
DG Neary Realty

Thank you Ali for answering. My liquid assets are all in the US -- both bank accounts and blue chip stock. All my income is reported on my taxes. I paid off my mortgage in 2009 and was never late. I have sterling credit with no black marks whatsoever. My credit score is over 800. I would have no problem getting excellent reference letters. I am a very frugal person.

ali, are you saying coop boards normally turn down small business owners?

hsg9000, is it pre-tax income 3 times the cc?

So is it 3 times your net or gross income?

phuk co-ops !!!

Daniel and Caonima, my net/after-tax monthly income is at least three times the maintenance fee in the price range where I would buy.

The main thing is the whole financial picture. Since your paying cash and have good post closing liquidity, your off to a great start. Now, most coops fall in the category of wanting <25% debt to income ratio; not counting coops on 5th ave/madison ave here. Talking general. However, since its the whole picture the coop looks at, a d/i ratio of a bit nigher say <28% should be fine. Banks are a different story and may go noticeably higher.

But I agree with the comments that net income 3x the maint (assuming there are no other debt obligations), should be fine with the board. If you have thousands a month in other debt obligations that we dont know about, the picture may change.

Good luck

oops, deleted part of my own post somehow..meant to say, "most coops fall in the category of wanting <25% d/i ration. Some will allow up to <28% with good post closing liquidity, so you should be fine."

something is really odd here...my typed text that displays in the comment box is being cut off when it displays? this happening to anyone else?

try one last time:

-most coops want <25% d/i ratio in addition to meeting liquidity guidelines
-with good post closing liquidity, some will allow up to <28% d/i ratio

happened again, i give up

that ratio always perplexed me just calculating it. i have to ask

debt/income < 28% means debt maintenance (monthly payment * 12) / yearly income, correct? IT can't mean mortgage size / yearly income

Let me try a simple example and hope it appears as I type it.

Monthly Gross Income = $10,000
Expected Monthly Maintenance/Taxes + Mortgage payments = $3,000
Minimum Monthly Debt Obligations = $500
-----

3500 / 10,000 = 0.35 = d/i ratio is 35%

Your financials sound solid, but as co-op board president I'm already seeing a red flag here. Two years' worth of maintenance in escrow, with "plenty" of post-closing liquidity left over?

Cash purchase. No mortgage. Pre-emptive strike by offering two years' worth of maintenance in escrow.

As a co-op board president, I'm seeing a red flag here. Looks like you're doing everything you can to avoid too close of a board audit of your finances -- or something else.

Matt,

I do not mean any disrespect but I doubt the OP is buying a coop in Washington Heights. His financials sound too good for your neighborhood...

...and you as a coop president, you sound too arrogant, like you preside a Park Avenue coop - take it easy, it is Washington Heights where average salary is not more than $65K....

Wow, John75, obviously you didn't mean any disrespect, because you said you didn't mean any disrespect before you went on to disrespect Matt, but come on, please have some respect when you are trying to not mean any disrespect.

Thanks for your candor, Matt. I wanted an honest assessment and so that's why I posted my question. Because I'm new here, the system delays my posts so I addressed some of the issues you raised in previous comments that, as of this writing, have yet to appear.

As far as the "pre-emptive" strike, I wouldn't offer that at the get-go. From reading here at Streeteasy and another site, I learned that co-op boards sometimes ask for several years of maintenance in escrow, so I'd be perfectly happy to provide that upon request but would not offer it at the beginning of the process, so as not to appear "too eager."

A board would be more than welcome to look at anything and everything having to do with my financials. All my income is reported and all my assets are in the US. I can provide a complete paper trail. I've never worked in any kind of unsavory or illegal job so everything is above board.

I bought a house when I was self employed and offered to put 25 percent down. When the lender balked at the last minute, I upped the downpayment to 35 percent, which made the deal close. (I then paid off the thirty-year mortgage in eight years.) So I know that accommodating the other parties involved may be necessary to make a deal fly; hence, that was the reason I mentioned putting maintenance fees in escrow in my initial question.

I know that another alternative is a condo or a sponsor unit; however, I haven't seen too many listings for either in my price range.

i remember seeing a FSBO post on craigslist, a 650sqft one bedroom HDFC right on W 145 ST subway asking 40K, monthly cc about $500(?).

if it's in that range, hsg's monthly after tax take-home is $1500, have a saving about $120K, he must be around 32 yrs old

>if it's in that range, hsg's monthly after tax take-home is $1500, have a saving about $120K, he must be around 32 yrs old

Don't forget about what Obama did.

I recently completed a similar transaction. My lawyer recommended that I plan to put 1 year of maintenance in escrow, but as it turned out, the board did not ask for even that. For most buildings, I would guess you should be fine.

What did Obama do? (This time, that is.)

It seems like all these coop PREZ MOFOS want you to have a mortgage and frown upon all cash buyers

"I do not mean any disrespect but I doubt the OP is buying a coop in Washington Heights. His financials sound too good for your neighborhood..."

FYI, his financials don't sound nearly as good as at least two all-cash buyers who've bought into my building.

And you know what? "Arrogance" is what protects buildings from potentially nefarious shareholders. You're welcome.

Matt,

Step back, relax, take a deep breath and try to realize for a minute that YOU LIVE IN POORVILLE WASHINGTON HEIGHTS!

Thank you.

Your wealthy Upper West Side Neighbor.

Fiduciary responsibility knows no neighborhood boundaries.

-- Your even wealthier Washington Heights neighbor.

Washington Heights Co-ops
Beds Listings Median Price
Studio 6 $177,000
1 BR 69 $269,500
2 BR 47 $425,000
3 BR 12 $662,000

UWS Co-ops
Beds Listings Median Price
Studio 37 $415,000
1 BR 142 $575,000
2 BR 119 $1,195,000
3 BR 61 $2,395,000

Do those Washington height co-ops include a hot dominican chick upon purchase ?

Um ... point, West34?

Thank you West34!

Yes, our poor friend Matt chose Washington Heights because he makes so much money that he could not park his wealth anywhere else but to the best neighborhood!

FYI, because it seems you do not know where you live:

http://www.city-data.com/city/Washington-Heights-New-York.html

Nothing beats a poor coop president - is it a HDFC building Matt?

Estimated median household income in 2009: $56,058

I make the median household income in a month! Matt, you got very wealthy neighbors up in Washington Heights! Just like you!

John, I'm very glad you make the WaHi median HHI in a month. I do roughly the same (usually a bit more). I chose Washington Heights because I had the luxury of having the capital to actually *choose* to live wherever I pleased, so I chose the building, apartment, and views I liked the most. I didn't feel the need to economically ghettoize myself around people in my same income bracket (or people who over-extend themselves to PRETEND they are).

Perhaps in the future you'd do well not to make assumptions.

I'm thinking, however, likely not.

Matt is a 1%er!

LOL Matt! You are funny! Keep posting!

"I chose Washington Heights because I had the luxury of having the capital to actually *choose* to live wherever I pleased, so I chose the building, apartment, and views I liked the most"

Your logic beats me. If you had the money to choose the building, apartment and views, why would you choose the ghetto Washington Heights when you could choose any other neighborhood?

Then again, maybe you are a drug dealer and your neighbors are your potential customers.

Now I get it!

co-op's are the basest form of democracy - that a co-op would red-flag someone who is offering to pay all cash and escrow 2 years worth of maintenance, and is otherwise presumably qualified, is just flat out crazy

though I must say i am impressed with anyone who has the time to put up 6,445 posts, have a lucrative job, run a co-op and have a life all at once - kudos - that is quite impressive

Re: though I must say i am impressed with anyone who has the time to put up 6,445 posts, have a lucrative job, run a co-op and have a life all at once - kudos - that is quite impressive

You left out all the hours and hours Matt spends on the A train heading back and forth to Chelsea and Hell's Kitchen - the neighborhoods he's admitted to preferring for social activity.

PS: John75 et al - most of us pegged Matt as a pretentious know-it-all but almost always wrong middle class snob years ago -- a board member who wouldn't admit 99% of current residents to his own 2nd tier building in a 3rd tier nabe. Now we just humor him.

But Matt, don't ever change!

JNNJ, I must agree wholeheartedly. It is shameful indeed that someone who wanted to buy something, and thus saved up their money diligently until they could afford to buy that thing _plus_ have some reserve funds stashed away on the side -- basically the epitome of prudence -- would be seen as _suspicious_.

I mean, surely HSG9000 isn't just showing up with a suitcase full of small bills and refusing to say where he got the money, right? He's going to have bank statements and tax returns to show how he earned it. If you have enough cash to buy the home you want, why waste a ton of money on pointless bank fees and mortgage recording taxes? And Matt, you live in one of the few reasonably-priced areas in Manhattan. If there's one place where regular folks are going to be able to pay cash, it's your 'hood.

I'm not saying he didn't make the money legally.

I'm just saying it raises a red flag, and warrants closer inspection.

Due diligence has helped my building dodge a few bullets over the past several years.

Matt .. what many of you MOFO CO-OP BOARDS do behind closed doors to potential buyers is bordenline racist ..and you phukin know it.

No, I "know" of no such thing.

There's a big difference between due diligence and being pre-disposed to question/red flag someone who offers to pay cash, etc. Tax returns, bank statements, the board application and interview are plenty enough to make a determination - and frankly, its offensive to hear that it would be a red-flag BEFORE even looking at actual information, no matter what neighborhhod the co-op is in. There's already enough hurdles to be cleared in order to be able to buy into a co-op, no need to add another based on pure conjecture.

These CO-OP MOFOS probably red flag potential all cash buyers by going thru all their statements to see if they declared all their damn cash. They act like they are the phukin IRS

Hey Matt -- what if the applicant is super cute -- is that a positive or a negative?

What people continually fail to understand is that buying into a co-op is NOT purchasing an apartment; it is applying to be a co-investor in a multi-million dollar NYC real estate enterprise. One would be a fool to not vet a prospective partner.

Keep going Matt - 6447 posts! You sure have a lot of free time for a "millionaire" in Washington Heights!

West34 is right: Matt, please do not change!

One would be a fool to not vet a prospective partner.

Buyer comes in all cash for a place 1.5 mil ... what the phuk you got to lose ?

The last time i was here, I swear I thought Matt was a VICE president.

Privacy. Security.

Washington Heights co-op boards have no business scrutinizing the financlais of buyers. IF I'm a drug cartel or arms dealer and I come to the closing with a suitcase full of $100 bills, you take the money and mind your own business.

That's cute, Socialist.

And I tell you where you can stuff your suitcase full of $100 bills.

Look at the list of rules I spotted hanging in the lobby of Matt's co-op:

http://realestate.aol.com/blog/2013/01/11/landlord-from-hell/?icid=maing-grid10%7Clegacy%7Cdl2%7Csec1_lnk3%26pLid%3D255984

SO Matt, how are you enjoying your view of New Jersey? The people whio live in those buildings in Fort Lee that you look at every day make way more money than the people in your WH co-op. And on top of that, on the NJ side, nobody gives a sh*t about your money.

And if you live in WH, don't hang out in Chelsea too late. The last express A train leaves at 10 pm. After that, it's all local baby.

So all of the rich people including the socialists from prime Manhattan make fun of the outer boros and Manhattan above 96th Street? How rich do you have to be to get into this special club?

and sorry Matt, but when you sell your co-op, you can't market your fire escapes as a "balcony." Don't even try it.

"What people continually fail to understand is that buying into a co-op is NOT purchasing an apartment; it is applying to be a co-investor in a multi-million dollar NYC real estate enterprise. One would be a fool to not vet a prospective partner"

That's not in dispute - its being pre-disposed to red flag someone because they offer all cash - at the very least, the presumption should be favorable and welcoming, and not uh oh, this person is a [insert prejudice here]

NYCMatt is being totally stright up with yet you attack his because you don't like the truth.

Perhaps that's because people don't agree with the idea of a person, in a postion to make decisions which directly affect the lives of others, maybe be making jugements before having all the facts. Just because its the truth doesn't make it acceptable or right

The coop board has no duty to the general public. Wishing any different isn't going to get you approved. falcogold1 is telling it like it is.

no, people are attacking Matt because he is the president of a co-op in Washington Heights, but acts like he is the president of a co-op on 5th Ave.

Your point is clear Socialist, people on 5th Avenue are better than people in Washington Heights.

Right on Socialist!

Greensdale: what you fail to understand is that there is a different set of rules at a 5th avenue coop compared to a Washington Heights coop (sorry, I puked in my mouth when typing "Washington Heights coop".....

Anyway, none says that people living in 5th avenue are better than people living in Washington Heights (although IMHO, a banker is always better than drug dealer Matt). What we say is that people living in a 5th avenue coop are far more wealthier than people living in a Washington Heights coop, that's why different rules apply because different financials are at play....This is just a fact, people living in a 5th avenue coop make millions compared to people living in Washington Heights where the yearly income is what $50-$60K! If you fail to understand this, greensdale, you need to go back to elementary school...it is a very simple concept really...If you put your mind into it, you may be able to understand it...

John, you make $56k per month?

So basically, you cannot act like you run a 5th avenue coop in Washington Heights! No banker or wealthy individual for that matter will buy up there so one will need to evaluate the applicant by the neighborhood's standards. If for example the apartment costs $200K, you cannot expect the applicant to make $250K a year in order to approve him!

That's why we make fun of drug dealer Matt - because he pretends to be someone he is not in real life or actually, he would have loved to be in real life. Unfortunately, a 5th avenue coop is miles and miles and miles away from him, both financially and geographically....what's left to him is the attitude, but sounds silly when you do not actually live the lifestyle!

Coops are private real estate clubs. They are intitled to create their our rules and regulations which only apply to members of that club and potential new members. The better the club (location, finances, quality ammenities) the harder it is to become a new member. I have been dissapointed more than once to find that a coop demanded 2X or 2.5X liquid assets post closing (on 50% down properties). To your point, I just views a prop fairly priced at 1.9MM. To qualify, I must have available liquid assets in excess of 4.75MM.
No membership for me...

in the all cash down situation you still need the minimun post closing liquid assets. You would still need to have a monthly income that is at least 4X monthly carry charges. The advantage here is there is no mortgage so that you might qualify with a lower total income.

John, do you make $675,000 per year?

There are actually some major differences between a drug dealer and a bnaker. One makes money selling shady products illegally throught the world, and the other is a drug dealer.

Why do you hate bnakers?

"John, do you make $675,000 per year?"

Approximately. Before taxes and without the year-end bonus. Why? From what I gather, there are people in here far wealthier than me...

That's before the bonus, got it.

Certain bankers are focused hard working individuals who have found themselves in the enviable position of creating fishy schemes that produce great profits with no copability. In other words...do great crime with no risk of direct incarcertion or penelty. HSBC is a perfect example. Great premeditated crime with no penelty to the criminals. Sure, 1.9B fine but we never heard about how much money they made or what happened to the bankers who signed off on the deals with DRUG DEALERS, TERRORISTS and GOVERNMENTS OF ILL REPUTE.

Yo jnnj .. let me ask yo simple azz something. How different are the MUDAPHUKA BANKERS who phuked the NATION with ghost mortgages to the drug dealers who phuked washington heights, harlem with their drugs ??? WELL MUDAPHUKA ???

Different?
Those bankers are ivy (or top tier) educated professionals who via their acedemic cleverness and lack of moral compass duped not only the country but, the world. When they were caught, they got to keep their ill gotten gain without even the threat of prosecution. Drug deals (who do not need to attend ivy league colleges) supply a chemical to those with chemical additction. They risk prosecution, incarceration and social isolation.
We celebrate banking criminals.
BIG DIFFERENCE

"Yes, as through this world I've wandered
I've seen lots of funny men;
Some will rob you with a six-gun,
And some with a fountain pen.

And as through your life you travel,
Yes, as through your life you roam,
You won't never see an outlaw
Drive a family from their home."

Believe it or not, you don't have to be a banker to make over a million dollars a year (or thereabouts).

Some sound very jealous..

@Falco ...there is no Difference because they both PHUKED OVA THEIR CUSTOMERS AND DIDN'T USE PROTECTION !

Hi MIBNYC, you are a very colorful character. Lord knows we need more of them around here.

LOL ...I try.

Its true you could make a mil and not be a banker.Netting 700k a year ain't bad after uncle sam screws ya

You want to try to outdo caonima?

You want to try to outdo caonima?

Caonima ?? Sounds like a medical condition

perhaps

I did all cash and also provided a dollar in liquid for each dollar that the coop cost. It was 7 figure coop so I had 7 figures in liquid set aside.It was midtown upscale but not glitz. Income 6 times yr maintenance. No debts. I recommend good letters of reference, you must show proof of each dollar income with some tax form and company receipt of services, then for past years, all significant cash flows in your accounts should have an explanation. (Get your Fico score also.)To see a million dollar deposit without this evidence is a red flag. Then have a CPA forensic accountant audit all statements and prepare report to board. If you do this, then you have a good base to move on in the approval process. Don't forget to have all done electronically and to have each financial account supported by a letter from the institution, etc. my process took about two months. Good luck on your purchase.

Heavens to betsy! Are we to assume that Matt is .............. a ...................... homosexual????? I thought they were banned from Washington Heights. But what the hell do I know...............

A "thank you with a cherry on top" to AlphaShark for your detailed answer. Your advice was extremely valuable. For some reason his/her reply is not showing here, but it is showing on the subscribed version of this discussion. (Perhaps he/she is new, as I am, so it's taking a while for that response to be approved.)