handy-man / fixer upper - bidding, inspection - HDFC building

Also, it may need to have some electrical work done -- not sure if the plugs are grounded.

Your focus should be more on the building and less on the apartment. How are the financials? Is there transparency where it's needed? Are audited financials even available for the most recent year, or are they "delayed"? What are the resale restrictions, and when do they sunset? How many rent-regulated apartments are there? How new are the systems, what will need replacing soon, what are the capital reserves like, and at what rate are they funded? Does the evil UHAB (a non-profit) have its claws in the building?

HDFCs require research on a deep deep level.

Your broker will give you no useful assistance in any area that matters. It's good to doubt what he says.

Thanks Alanhart - the broker is a seller's broker. Points well taken, we're just collecting info now. Also a first-time buyer -- will the broker be likely to let us look at the financials and such *before* we make any offer?
It times out of the HDFC program in 8-10 yrs.
However if we assume all else looks good... any thoughts as to what offer we'd make?

How do you find out hen a building "times out" of HDFC?

tandare--does this unit happen to be in washington heights? if so, i can give you quite a bit of info. i own several prperties in HDFC buildings.

eah -- most apartments we've seen (of the ones that have been HDFC) have been in Harlem / low Washington Heights -- 144th Street up to 158th Street. And am planning to go to see one at 2440 Amsterdam Ave.

Susanbnyc -- depends on building - coop docs will reveal it.

eah, I'm looing at several hdfc properties in Wash Heights and would love to hear your insight: writerchicknyc@yahoo.com

eah - if you wouldn't mind, I too would like to hear any thoughts -- tandare@hotmail.com

I have a property, tandare, on 157th and Broadway. Excellent area. If you have any specific questions: eholloway@mac.com

You can sometimes find the relevant documents (for sunset clauses) on ACRIS. You'll need to dig through legalese in the documents, though.

My other advice in considering an HDFC, besides demanding unusually high standards of transparency and fiscal responsibility, is to get a sense of the mindset of the board and other owners. Are they staunchly committed to encouraging affordability, or are they eager to maximize their individual equity? Do they have a sense of the standards by which "real" coops operate, and what constitutes "fair"? Note that they could decide to continue (as a private corporation) to keep resale restrictions in place beyond the sunset period, or they might have taken on a mortgage/grant that requires doing so.

Also, in case you need to sell before 10 years from now, how is the flip tax calculated: sale price or profit, with or without transaction costs, tiered by duration? Are n In a sinking market, you could get triple-whammied.

Understand the positives and negatives of unsold units -- number and disposition plan. Unlike real coops, there's no sponsor holding ownership of these. So your board needs to provide the shortfall, if any, between rent-reg rents and operating costs. But it also eventually gets the equity value of those units. It can sell them or rent them out, and again each coop will take a different approach re: market value or "affordability" -- sometimes by choice, sometimes by external requirement. Unusually low maintenance fees are often an indication of revenue flowing from this; you need to determine if it's sustainable, or will lead to deferred maintenance/operations -- because you can be sure your co-owners live entirely in the "now" (it's the mindset of the poor) and will be unwilling to raise their monthly fees.

Be prepared to walk away if anything of this sort makes you uncomfortable. Don't be mesmerized by the "too good to be true" pricing. Have a good lawyer who understands these programs (but is not referred by the broker or building, or (of course) the diabolical UHAB.

I have found "too good to be true" pricing usually indicated income restriction. My experience with HDFC buildings is that htey want to build community and discourage investors. I usually have to convince the board that I am all for improving the building/area and have no intention of exploiting the building. Also, you'll find when you meet the boards that the "HDFC" staus is largely moot. They keep it so people can get the Community Works interest rate which if often quite a bit lower. HSBC has one of the best programs.

eah, are you saying that if I see a place and my husband and I make more than the income restriction, that we should make an offer anyway and present the board with an argument that as teachers/non-profit people we will invest in the building and community, etc?

If the income restriction is held up by the board you can appeal to them...if it is a true city HDFC than you might have an issue. It's very tricky to figure out what's what. My unit on 157th st was in an income restrcited HDFC, or so I was told. My property manager was able tos peak to someone on the board via their real estate agent. We negotiated terms and the board voted to let us buy the unit. Also, sometimes you can put in an offer under one person (say you make 50k but your your wife makes 150k)...there are tricks. There's no doubt, the people in the building WANT to bring in the right people and often it is the "new" people fighthing the "old" for control.

lookingforhome: I just bought into an HDFC, and their income cap comes up when the price comes up, i.e. their income car now is $500000. Not bad.
By the way, there are a few HDFC buildings on west 106 (not far from Central Park!) that have this formula, too. That's why I bought in: because of HDFC, the maintenance is very very low but the property prices are coming up and up.

stakan - i totally agree. in the right building you can find incredible value.

Also, one other important thing: I bought below w 110. As of today, it does make a huge difference. The appreciation potential is phenomenal, even in a slow market, as it is literally the last "buyable" patch on the Upper west Side. Basically, New Yorkers know it but out-of-towners perceive everything above w 96 as an unknown. My gain!

I have to say, I have found huge value over the years in Washington Heights. All my properties have appreciated quite a bit.

I'm confused about who has authority over income restrictions in an HDFC building - the board, UHAB, some city agency?? I am going through the closing process on a unit in such a building and my income last year was way higher than the limit (however, next 2 years i will be in grad school and make almost no income). In any case, the broker tells me he has sold units in the building and that the board has ignored income restrictions. I've confirmed the sales on ACRIS. Could it be true that the board may ignore restrictions? Isn't there some superior governing body that administers auditing, enforcement, penalties? No info on this on the web.

I'm concerned about (a) getting approved, and (b) being able to sell at a decent price ~4-5 years from now, which would be impossible if the income cap of $24k/year (in this building's case) is enforced. The building became an HDFC co-op in 1995.

Thanks in advance for any info and tips!