"Liberal" Co-op Liquidity Requirements

20 months of what? Either way you will be fine if the co-op is that liberal. The most liberal will just look at your paycheck and say, ok, s/he can pay the maintenance. No requirement.

My bad: I meant 20 months of mortgage and maintenance payments in liquid assets (cash & stock).

If you have financial trouble, just rent out a room on AirBNB, your co-op won't care.

If anything, board/listing broker might steer you to putting a little more down -- at the "expense" of shrinking your liquid reserves -- to lower your DTI. But you should be good.

ali r.
{downtown broker}

Thanks Ali! Do you think that the DTI is too high? Isn't standard less than 25% for housing costs and less than 30% total costs?

Lz3, every board is different -- they really really are -- and I would trust your broker. That said, I can imagine a board that would want to see DTI =25% but be fine with only one year of reserves.

ali

You will be fine. I've seen several 20% buildings allow less than 2 years liquid.

Thanks all. I was also just told that for the past year, the Board has delegated approval to the Managing Agent. Does anyone have any experience with that? It is a smaller co-op building (about 30 units) so I found that is kind of surprising.

Lz3:

1. not a shocking development
2. many boards in small coops lack the expertise that experienced managing agents have

Thanks RB. Makes sense. I'm hoping that means that the "lag time" between submission and approval will be shorter because I don't have to actually wait for the Board to schedule an interview. My current lease ends 10/1 and hope to be in contract by the end of this week (fingers crossed).

Lz3 - Hang in there and keep a good thought. Keep in mind that, while the co-op may have the managing agent review the financials (and to rbi's point, many do due to lack of financial expertise), you will most probably still need to schedule and attend an interview with the Board. (But, once you get to the interview, it's yours unless something really crazy happens.) Good luck !

New2m3,
Thanks for the well-wishes! I was told that two of the most recent purchasers in the building received only managing agent approval and did not have to meet with the Board at all. I have never heard of such a thing but it sounds like it could expedite the process.

Not sure if we can call it a trend yet, but I'm in your camp!

Let me get this straight. This is a building where the board apparently doesn't care about the financial soundness of shareholders, doesn't care about owner-occupant percentages, and can't even be bothered with performing its fiduciary duty of vetting new prospective shareholders? RUN. As far away as you can.

NYCMatt, my attorney has reviewed the financials and the building is in great fiscal shape. Local 11 work was recently done, mortgage was refinanced last year at a great rate and they converted from oil to gas in 2012. from my broker's discussions with the seller's broker, whom has sold several units in the building, it seems that they delegate many decisions to their MA (like reviewing a buyer's qualifications and approving them) but for capital projects, they get and need Board Approval. That may seem odd (and it is) but it appears to be working.

"the building is in great fiscal shape"

For NOW. Don't expect that to last.

NYCMatt, given your experience, what can a MA miss on reviewing applicants that could negatively affect the building? My thought is that if they don't do their job then they will be ripe to get sued by the Co-op Corp and that such a lawsuit could negatively affect their business/reputation.

Lz, the fact that you're even asking that question frightens me. Stick with buying in New Jersey.

NYCMatt, I understand that a MA may have less of an interest (i.e- it is not a shareholder and doesn't have to live/pay for a deadbeat or a "crazy" neighnot) in keeping out questionable candidates but I presume that they review the financial documentation fairly close, do DTI calculations and generally follow some sort of approval model that has been adopted by the Board. Further, from what I read on here, unless you are drooling or insult someone pretty badly, if you are brought in for an interview, you are generally good. I understand that 5 minds are usually better than 1 but do you think there is a real statistical difference between co-op defaults for shareholders who gain entry in non-alternative means such as MA approval only or purchasers of Sponsor units? And again, from what I was told, all other issues, capital improvements, finances, etc. are decided by the Board. Anyone else have any thoughts?

Stop overanalyzing this. There isn't enough data recorded or even data to be recorded for non-traditional co-op approvals. A managing agent doing it is likely to give approval because none of the emotional aspects are involved.

Right. Leaving it to the managing agent forces the board to codify just what the requirements are. It really boils down to meeting the financial criteria and not being a litigious crackpot. That can easily be verified by the managing agent.

On the other hand, it's the board's responsibility to vet buyers, so just blowing it off seems to be going too far.

Thanks for the responses. My latter question stemmed from NYCMatt's doomsday prediction. Nothing more.