Rejection from board pre-interview

Vote them out.

Find out if there are other disgruntled apartments. I believe you only need a certain percentage of shareholders to call an emergency election.

When you say 'three apartments control the board' do you mean there are only three board members?

sue them

+1 on “Vote them out.” We completely revolutionized our building through the polite and legitimate process prescribed by our governing documents, and the Old Guard had no idea what hit them, even after we begged them to go of their own accord because humiliation is not productive for any community. If what you allege is true, chances are all that the shareholders need is someone willing to take the lead. Make it easy for them: Draft a white paper and draft a blank proxy so that they can give it to either you or another shareholder the trust if they don’t know you. Just stick to the facts. A potential hurdle: In your outreach efforts, you might find that a majority of shareholders don’t want young people/agree with what your board has done. There are a few reasons coops trade at a significant discount to condos, and the requirement that the community approve new entrants is at the top of those.

The same rules that prevent you from selling to whoever you want to prevent your upstairs neighbor from renting to a punk band.

Meh, a musical artist from a “loud” genre rents the condo above me. Not around most of the time, especially not these days, but when he is there isn’t much noise. Sometimes there is music, but happens during work hours and never blaring. I respect the man doing his work. No interest in “partying” at home, bringing on the party is his day job.

The loud jackasses invariably end up being the ne’er-do-well adult kids of absentee owners who blare the speakers at 11pm so loud you can feel the vibrations through 4 floors of concrete. That’s who the coop board should be screening. “Are you rich? Great! What do your kids do? Nothing, you say. Sorry, we’re gonna have to reject you.”

And the brothels are pretty quiet except for their customers banging on doors late at night

It was a metaphor.

Amen to this: "The same rules that prevent you from selling to whoever you want to prevent your upstairs neighbor from renting to a punk band."

And "YES!!!!" to this: "The loud jackasses invariably end up being the ne’er-do-well adult kids of absentee owners who blare the speakers at 11pm so loud you can feel the vibrations through 4 floors of concrete. That’s who the coop board should be screening. 'Are you rich? Great! What do your kids do? Nothing, you say. Sorry, we’re gonna have to reject you.'"

>> It was a metaphor.

I know, but so was what I said. These discriminatory practices have a way of backfiring. Another (40s-ish) owner in the building explicitly told me said artist viewed his apartment, but he explicitly didn’t want to rent to him. It’s a failure of imagination: as if some dude who sells out MSG would think it’d be fun to throw a rager in their apt.

You discriminate against young people with jobs, you end up with old people with ne’er-do-well adult kids. Worse yet, you end up with what slowly but surely becomes a retirement community. I know MCR is the only person under the age of 70 who actively likes it, but virtually everyone else dislikes what has become of her building & neighborhood. How does that happen? I’m guessing half the 70-year-olds don’t like it either: when they bought 40 years ago or whatever, they probably weren’t thinking they’d be stuck with just a bunch of fuddy-duddies as the only ones around 40 years later.

Did they have at least one to two years worth of post-close liquidity? Was there debt to income close to 25%? Credit scores? Google them. What type of work do they do?

Their

"Worse yet, you end up with what slowly but surely becomes a retirement community. I know MCR is the only person under the age of 70 who actively likes it, but virtually everyone else dislikes what has become of her building & neighborhood.n"Worse yet, you end up with what slowly but surely becomes a retirement community. I know MCR is the only person under the age of 70 who actively likes it, but virtually everyone else dislikes what has become of her building & neighborhood."

So true: I was outvoted on rejecting a ne'er-do-well adult child of a rich individual as a renter.

I fully own my prejudice against ne'er-do-wells who live off their parents' (or grandparents') money.

I also fully own my prejudice against those who stretch themselves beyond their means to maintain a fully-leveraged apartment in Mahnattan in addition to a fully-leveraged second home in the Hamptons/Aspen/Wherever. These are the folks who begrudge paying the doormen and handyman, despite the fact that they put the highest demands on those doormen and handyman. It is pretty clear the direction our building is headed, and I admit that had I known the full extent of it, we would not have doubled down in the building.

I do love our building and am resigned to its future, but I put this real estate purchase into the "oops" category.

Imagine my horror when I found out the board doubled the underlying mortgage just two months after we went into contract on the new place. That lead me to get involved in building management, and what that involvement revealed is that many of the newer shareholders are living well beyond their means, while many of the older shareholders are content to deplete shareholder equity in the building because they won't be around that much longer and don't overly care what they are leaving their heirs.

Quite the mix we've got; does not bode well for the future of the building. I foresee continuing reduction of human service to accommodate continuing increase in debt service. I lump this into the "oh well" category because we have no problem opening the door for for ourselves and taking out our own garbage, but there is grumbling among many of the newer shareholders who voted to decrease the size of the staff while tapping into the LOC regarding the "unhelpfulness" of the staff. Part of the joy of board duty is explaining to shareholders that the actual duties of the doormen and porters are defined by the union contract, not by the shareholder's whims. I have zero patience for those who want "servants" but don't want to pay for them.

How did the ne’er-do-well adult turn out, were you right or wrong?

Your story jogged my memory about who lived in musical artist’s apt prior. It was some guy in his late 50’s or so that we eventually concluded was a ne’er-do-well offspring of someone rich. Charming MO was the following. After working out in the gym (lazily, of course), he’d take his disgusting ass to the pool, remove his shirt & shoes but with nasty shorts, and jump in for one lap. No showering, not even as a courtesy showing if someone was in the pool. Then after toweling off, he’d go to the hamper with his soaking towel and drop it on the floor next to the hamper, despite hamper door being open all the time. Once when he did this, and I was already out of the pool, I looked over to the lifeguard and gave a WTF expression, and the lifeguard explained that’s how some people are. Yes, that’s how losers are.

I had repressed that trauma for some time now. Thanks for bringing it out, I’ll send you the therapy bill.

Sometimes it's the older folks who cause the most noise... in my first NYC apartment there was a cranky old lady who lived next door to me who was hard of hearing and seemingly never slept. The result was 24/7 blaring TV through our shared wall. Since I lived in a studio this essentially meant a permanent soundtrack of Price Is Right, Jeopardy, Jerry Springer, and Morton Downey Williams to enhance my living experience. And don't get me started on the 'fun' grandparents who let their oft-visiting little darlings rampage around like a herd of buffalo...

MCR, give deets on “well beyond their means” on the new shareholders please! Wealth, income, expenses of composite/typical one.

This, BTW, is why I have disdain for so much of the “mass affluent”:

https://www.nytimes.com/2020/09/18/business/housekeepers-covid.html

It’s Morton Downey Jr and Montel Williams, bramstar! Yeesh, you would think after that permanent soundtrack it’d be etched into your memory properly. Clearly, you need some remediation via YouTube.

The failure-to-launch adult child (daughter of owner’s friend) broke her lease when it became apparent Covid was a thing, and the apartment is now for sale. Check out the listing and the owner, and you will likely chuckle.

The apt is for sale well below cash put into it. It is listed below last sale price despite its undergoing a “no expense spared” renovation. It is a beautiful little gem that will undoubtedly attract a buyer, and all the information is now in the financials for prospective buyer to understand what they are signing up for.

Unfortunately for me and anyone else committed to the long term financial health and quality of our building, I expect this little gem will attract someone stretching themselves to the max who won’t examine the financials to see they have purchased a ticket on The Titanic.

Oh well.

Profile of “Living beyond their means” shareholders in our building: Single income finance professional with spouse dedicated to considerable work of raising multiple children, which then leads to multiple nannies, all of whom travel regularly to the second home in the Hamptons in Range Rover for weekends that they are not on fancy vacations. Private school tuition plus seriously expensive extra-curriculars. They are outraged that the staff does not want to help them watch their children, walk their dog or go the extra mile for them in any way.

On ne’er-do-well apt, I looked and am chuckling. Why did owner bother buying the place? And is owner effectively sucking down non-payment on the broken lease, because it’s a friend?

>> spouse dedicated to considerable work of raising multiple children, which then leads to multiple nannies

Wow, that is serious dedication. I wonder term is left for those raising multiple children while also holding down jobs tending to household needs of others.

(I know you left that nugget in there for me on purpose, knowing I couldn’t resist.)

Owner bought place for their own adult child who then decided they did not want to live there, so they decided to rent it to friend’s daughter for less than monthly maintenance. I cannot imagine they are going after daughter or friend for breach of lease, but I don’t have any information on that. I suspect (but do not know) they were doing it as favor to friend and the lease payments were not material to them.

@Inonada - The sense of entitlement and cluelessness would be shocking but for the fact I was raised in that culture. As everyone can now see, I abhor it, but many I have known my whole life have never set food outside it. They are just shocked that being who and what they are they can’t seem to make it work in NYC. It MUST be the city’s fault!!!

On Range Rovers and the mass affluent, I’ve got a problem with them too. Didn’t really think much about them until this past summer, until a few friends kept commenting on how they started showing up earlier this year. E.g., usually in April it’s all pickups & Jeeps, but this year all the Range Rovers started showing up early. At XYZ establishment last night, it was all Range Rovers. I took this to be mass affluent speak for “rich people”.

So my wife & I got curious. When afforded an opportunity, we like cars and try to find something fun to rent: for example, for this summer a Jeep w/ no top was the right version of “fun” at the beach. But sometimes we do more expensive cars.

We always looked at Range Rovers as some lame SUV like all the others. Do they really cost that much to deserve this attention, and if so, why? We looked it up and were disappointed to see they only go for $90K, which is let’s say double some mid-end Audi SUV.

It’s as if the mass affluent sheeple are completely clueless to income inequality. Who the hell cares about some 2x difference in price, this is mice nuts! If you’re gonna comment on the cars of rich people, go find some real rich people who own some actually expensive cars. Not some leveraged accountant who just made partner, or dentist, or whatever, please. Musical artist above me rolls in white Maybach, driven by his buddy from high school. If you gonna signal, do it right!

(If you don’t know what a Maybach is, my doorman explained it best: it’s just a Mercedes now, except it costs 4x as much.)

I believe sometimes parents think apartments are paperweights which stop their crotch goblins from scattering. I also believe most people don't respect free stuff but only things which they have some personal investment in.

I used to mock those who bought Humvees; in this age of civil unrest, not so much . . ..

@30yrs - Yes, I actually give the adult child credit for declining the very generous offer his parents made him, and the parents' plan backfired as the adult child now lives overseas. Needless to say, I can relate.

But one last note on this subject: I am not a parent, so I don't know what what emotions are involved there. I think that has got to be the toughest job in the world, particularly when you would do anything in your power to steer your child toward what you view as "the right path," and your child chooses a different one. My parents actually sacrificed quite a bit in terms of what they probably would have preferred to do with each of their lives to give my siblings and me every opportunity in the world, and if every parent were to do that, the world would probably be a much better place. So, as much as I might disagree with my father on various values, please understand that I believe he was an extraordinary father to me (understatement), and it is not the worst thing in the world for anyone to have their parent or anyone else offer them "free" anything.

On behalf of the mass affluent: I'm sorry, we're the worst. The Range Rovers illegally parked all over my neighborhood are starting to rival the placard abusers, and that's saying something. The "Karen" memes, that housekeeper article, the flight to "good schools" (or as I call them, schools with just enough diversity to not feel bad about keeping everyone else out)... yup, those are the people I grew up with, much as I try to avoid them IRL.

(I've been paying my housekeeper to stay home since Feb.)

Now that they're panic selling, I'll admit there's some schadenfreude attached to my low-ball bids.

On the housekeeper point, here is how a conversation with one of my FedSoc (former) cronies went:

Crony: It is outrageous that the government is forcing my housekeeper to buy health insurance. She can't afford it and doesn't want it.

Me: She doesn't want it? Doesn't she have three kids? Are you sure she doesn't want it?

Crony: Well, either way, she can't afford it.

Me: Have you studied at all the employer-based aspect of health care insurance in our country? What do you think about that?

Crony: Huh? That's not an option for her, because she doesn't have an employer.

Me: Um, aren't you her employer?

Crony: You are not seriously suggesting I offer our housekeeper healthcare insurance? We pay our housekeeper the wage determined by the market, and the market is not even close to requiring that we pay benefits in addition to hourly wage!

Me: Well, at least the you pay HHE taxes (Social Security, FICA, FUTA and DC unemployment insurance) for her, so I guess if she can hang in there until Medicare kicks in, at least she will have health insurance for herself.

Crony: What? Paying HHE taxes is for chumps. We make sure to keep her under the hours required to trigger those taxes.

Me: Um, I am over at your house quite a bit, and I find it hard to believe she is under the minimum that triggers those taxes.

Crony: That is Mr. Crony's department; he handles all the money (btw, Crony clerked for Antonin Scalia; Mr. Crony clerked for Justice Kennedy).

Me: Have you ever thought about any of this beyond what Mr. Crony tells you?

Crony: Why are you being so mean?

Me: We are having a conversation; I'm not trying to be mean. I am trying to understand.

Epilogue: Subsequently Mr. Crony and I got into a number of conversations that made Crony uncomfortable at our very regular social interactions. Despite her very considerable brain power, Crony always deferred to Mr. Crony (who, I will admit is incredibly smart and is a true master of debate). Mr. Crony now holds a very senior position in the Trump Administration. I call him "Bill Barr's mini-me." As for Crony, I call her "The Commander's Wife."

These people, both of them, were dear to me, but I have severed ties with them over fundamental value differences, and I don't regret it. I miss them and it makes me sad thinking about all the real life moments we shared, but it was the right thing to do for me.

So @inonada - Thanks for triggering that memory. I would send you the therapy bill, but you and the SE Community are already shouldering it by reading these posts. :)

So who's worse - Mr/Mrs Crony and all the others who have never spared even a passing though for their housekeeper, or me who doesn't employ any housekeeper and thus is not a "job creator" because I brush my own john?

BTW, regarding Range Rovers, we're seeing more of them because they slapped the name Range Rover on a variety of unremarkable middle-class cars such as the Evoque, Discovery, and Freelander. AFAIC, only the original Range Rover (from $100K to $250K) and pre-2020 Defenders count.

Land Rover is a Great British truck manufacturer, their 'Range Rover line' has been a great marketing coup. Sort of reminds me a little bit of Rolex, great marketers.

Was going to comment on how far off we've strayed from the original topic of this thread.... But here I am talking about rolexes and range rovers.

My view has always been that if you're driving the car yourself, you don't have enough money. One employs a driver, dressed in an appropriate uniform (which you supply as their full-time employer), available with the car, on call 24/7. Anything else is just pretend. (the two exceptions: you are allowed to drive your mistress around in your own sports car, or you drive your own race car.)

Coop maintenance is always in first lien position. You never have to go after other assets to collect. Aside from the amount of financing, most other Coop requirements rarely save future difficulties because it's changes in people's circumstances which tend to cause those. I remember SMFH when 77 7th Avenue rejected a CPA because "he changed jobs too often" - 3 times in 10 years, each time moving from one Big 8 accounting firm to another, which (from personal experience as an Arthur Andersen alum) was not an uncommon way to speed up advancement.

It will probably not surprise you to learn that I have my eye on The Vermeer. One of those D-lines will have to budge sooner or later. Hope they've learned their lesson, because job changes have played a big role in amassing the figures shown in my board package.

Aaron2, here’s the real order of things:

1) Musical artist whose driver’s uniform is a white t-shirt (to match Maybach) and badass gold chain.

2) Penthouse owner whose driver who is off-duty NYPD or something like that, dressed in ill-fitted suit atop NYPD belly. Given who owner is, seems woefully under-secured, but those are the blessings of the civil state of affairs in the Western world.

3) Saudi-ish prince guest of said penthouse owner, who is borrowing penthouse for the night, with 2 Escalades packed with 5 security personnel each, along with another 5-10 security personnel hanging out by entrance, packing heat and dressed as if they are auditioning for the roles of Jules & Vincent in Pulp Fiction.

>>>It’s Morton Downey Jr and Montel Williams, bramstar! <<<

Yeah I realized my mistake after posting. It's all just a complete blur at this point anyway :-b

RB>> (I've been paying my housekeeper to stay home since Feb.)

You are a good man, RB. You have single-handedly restored my faith in the mass affluent. (OK, I’m kidding: most of my mass affluent friends are like this too.)

George>> So who's worse - Mr/Mrs Crony and all the others who have never spared even a passing though for their housekeeper, or me who doesn't employ any housekeeper and thus is not a "job creator" because I brush my own john?

Cronies & co., by far.

As I was brushing my own john, etc., for hours on cleaning days over the past months, I couldn’t help but smirk at the collective hourly rate wealthy people were now effectively spending on housekeeping services.

"So who's worse - Mr/Mrs Crony and all the others who have never spared even a passing though for their housekeeper, or me who doesn't employ any housekeeper and thus is not a "job creator" because I brush my own john?"

Per my value system, Mr/Mrs Crony, but I understand and respect the counterarguments.

And @inonada - A number of people did not even think to give their housekeepers leave to stay home, let alone continue to pay them while they stayed home. Per my value system, not cool, but they would argue the contrary, and I accept that it is not my place to tell others how to live their lives as long as they are obeying the law. The only upside of DJT Presidency is that it has enabled me to more easily identify those people without whose company I am better off.

>> Per my value system, Mr/Mrs Crony, but I understand and respect the counterarguments.

Maybe you shouldn’t, if you are seeking to more easily identify those people without whose company you are better off.

BTW, the housekeeper thing is not DJT-specific. The Friday before the shutdown, we gave our housekeeper a month’s worth of pay ahead of time just in case everything shut down, which she wasn’t expecting. After a couple of weeks when it became clear she wouldn’t be coming for a while, we checked in to figure out how we could continue to pay her. We also wanted to pad her pay to make up for anybody who was unable to pay her for whatever reason, so we asked who else has been paying her. Answer: no one. A lot of her siblings are housekeepers too, answer there was zero-ish too. I’m sorry, but I’m not having my friggin’ housekeeper going to a food shelter during a pandemic, but that’s not what others in heavy-blue Manhattan were thinking about.

Wow - I don't know anyone who has admitted to not paying their housekeeper during this time period. We learned from our housekeeper (you'll learn how in the next paragraph) that her other clients in DC had asked her to continue working through the pandemic, and she did continue working for them continuously.

Apparently people in DC were so gung ho to keep their housekeepers that she filled our time slot (even though we were paying her to not come) with a new client such that when we asked her in early July if she would feel comfortable coming back to work, she said she'd have to find a new time for us because she was fully booked.

We were confused and asked her if she wanted us to just find another housekeeper (she has been with us for 19 years, gets paid vacation of 6 weeks per year, and gets regular pay regardless of whether we have been at the house any time recently). She said absolutely not because she'd rather work for us than anyone else.

I said I was somewhat hurt that she had continued to accept our payments despite the fact that she had filled our timeslot with other work; she responded that times are tough and we just let it go. She is a great service provider, but I still have mixed feelings about this kerfuffle.

P.S. - "Maybe you shouldn’t, if you are seeking to more easily identify those people without whose company you are better off."

I don't like those who believe the counterargument and don't spend time with them, but I respect their right to make/believe it, as well as its potential merits in economic theory. Note that I stress potential because quantification is impossible; I don't buy the counterargument, but I can't prove that it is without merit in the same way they can't prove it has merit.

P.P.S. - I assumed (perhaps wrongly) that George's question was a proxy for minimum wage debate, so my comments about argument and counterargument should be viewed in that context to the extent anyone is actually following this discussion.

Amazing how a discussion about coop boards turned into a debate about rich New Yorkers before careening into politics . . .

Coops are a microcosm - debates within our coop board parallel those going on at every level of government. We have some shareholders who think the doormen and porters are overpaid; they want to fire them all and go with non-union workers or go without any doormen or porters at all; others have no problem with either the wages paid to or service received from the doormen, and some have no problem with the wages but believe performance can be improved upon. Super fun meetings.

nyc_sport>> Amazing how a discussion about coop boards turned into a debate about rich New Yorkers before careening into politics . . .

Let’s see, rich New Yorkers in positions of power displaying disregard for financial pain inflicted on those close to them, to satisfy their whims.

Now please go read what the OP wrote in the first post on this thread.

If you find this sort of behavior unacceptable, my advice is to sniff it out early and not get involved with such people. If you think it is acceptable, I don’t have any advice for you. I suppose I can say is that if you are involved with toxic people, be prepared for when the toxicity is spewed your way. However, that is of little help to the OP in this matter, but perhaps it’ll be helpful in the future

OP>> The couple that "bullies" the other apartments laugh that they can turn down anyone they want. I was never too concerned because they always end up accepting the applicant but now I'm met with a denial with a simple email stating "we denied your applicant".... I lost my job and had to move across the country for family reasons. This decision is placing a lot of financial pain on me.

I'm happy to continue the chitchat about The Vermeer and/or its peculiarly conservative board. Some curious listings in there, including a pair of adjacent 1BRs with different owners, whose listing agent is nonetheless advertising as a 3BR/3BA combo deal!

@MCR about your co-op's mortgage, what LTV threshold tipped you from "hmm guess I don't own my whole apartment" to "uh oh, I need to vote this board out asap"?

It was the fact that it is interest-only at current LTV of 10% combined with the explanation given by the President of the coop board combined with simultaneously raising the flip tax combined with announcement of expensive capital improvement that uniquely benefitted the apartments of 3 out of the seven board members plus some additional shenangigans (2 board members engaging in under-the-table rentals while demanding sublet fee from a rule-abiding shareholder, and don't get me started on the storage spaces).

Our old coop board was the paradigm of the stereotypical inept coop board that operated purely in the interest of its members without regard to other shareholders and didn't even understand that doing so was "wrong." The president was shocked/SHOCKED that anyone found her or any other board member's conduct problematic after "all the work they had done for the coop." We had tried multiple times to get explanations and additional information on a number of issues before instituting the coup and were summarily ignored at every turn, culminating in my receiving a letter from the coop's lawyer that I had no right to the information we were requesting (um, maybe he should have done a google search before doing that?)

Once I got onto the board and dug deeper, my head really exploded - origination fee of over $100,000 up front for the interest-only mortgage (board had never looked at appraisal or loan docs, but rather deferred entirely to managing agent, which had been the managing agent for our building for literally 80+ years); managing agent contract had been on auto-renew since 1937 (I kid you not) with the managing agent setting its own fee each year with no questions asked by the board and no contract defining what they were supposedly doing for us. The icing on the cake was that on top of the monthly fee that the managing agent set for itself and charged us, we paid for "additional services" on top of the monthly fee each month. Again, no contract anywhere spelled out what these were, and nobody on the board even blinked at charges on the monthly report like $7000+ for "printing and storage" on the very first monthly report I reviewed (that was happily reversed).

It would be one thing were we in a "hot" building or a "hot" area, but I don't predict a lot of appreciation for our heavily-staffed-bouteque-prewar coop over the next decade, and the capital repairs that were being neglected while board members were improving their own apartments bordered on criminal in my book.

It would also be another thing if I felt that our shareholder population could handily shoulder assessments or pay-off the mortgage in one fell swoop down the road (as we can and as shareholders in our building historically could), but I was not getting that sense at all from some of the newer shareholders, and the sense I was getting turned out to be correct when I did a listening tour).

The good news is that our shareholder population is entirely engaged now, and we will figure out the path forward through the processes prescribed by the governing docs. While I prefer that we stay a full-service coop, there is a gaining faction that does not want to pay for that, and I absolutely respect that they might prevail. That is the joy of buying into a coop; you are buying into a little town where your preferences can be outvoted. I have no problem being outvoted at all. As long as the process is transparent, I fully accept whatever we become, and I am delighted that transparency and democracy are on full display in our building these days, even though I suspect I am not going to like the outcome at the end of the day.

RB,
I remember another rejection where some empty nesters were moving from a large house on Long Island and the board rejected because they decided they must be using the unit as a Pied-a-Terre which they didn't allow, even though they said it was going to be their primary.

MCR,
You're lucky there isn't a garage with significantly less spaces than the number of units in your building.

Thanks MCR,

Re garage spaces - this is a solved problem in auction theory. Of course, that presumes the powers that be are interested in efficiency rather than crony favoritism.

Given the emotion generated by the corruption in allocation of storage space in our building, I cannot even imagine the emotion that garage space could inspire.

The nice thing is that our coop is small enough that it really is like a hilarious dysfunctional family - even though you might disagree with your crazy uncle (or he might disagree with his crazy niece), you neither like nor dislike each other; you just accept and co-exist, exchanging pleasantries and an occasional laugh along the way.

I can understand why this structure is intolerable for some, but it does not overly bother us, and the price differential between coop and condo was too large for me to ignore. The market is efficient in this respect.

That's the problem:
You see Coops with a small number of spots charging >50% off market rates and everyone on the Board has one.

I hope the business judgement rule gets overturned because as it stands the board gets to decide it's business judgement is to self deal and courts won't do anything about it.

Lpchicago... Feel free to reach out to me, the end of your post sounds pretty desperate. Maybe we can figure out a way to get this sold without a brokerage commission.

Keith
TBG

RB, I feel like the Vermeer's board is more transparent than it used to be. I had a client who really liked a high-floor unit there that we ended up passing on, but it's it in contract now, so the building's relatively low maintenance charges are definitely pulling somebody in.

We've done a couple of deals there (Vermeer), I think both were somewhere between three and five years ago. Both got through the board and are still living there. I do remember they were very strict regarding a 25% debt to income ratio along with post-close reserves, I can't remember if they wanted to see one year or at least two.

On another deal I distinctly remember that the buyer's DTI was 26%, and the listing agents who seem to get a lot of the business in the building insisted that it would need to be 25%. Other than that the process was fairly routine.

Keith
TBG

Keith & FP, what DTI do you typically see at different price points? Let’s say $1M / $2M / $4M, and let's define “typical” as median, meaning half-ish of the buyers have DTIs higher / lower than that.

I don't keep specific data on this, although I could go back and look at everyone's financial statement. However I feel the majority of the buyers I work with have a debt to income ratio below 20-25%.

As an example, we have an accepted offer on a $3M, three bedroom in The Village. DTI is 17%.

Of course there are a lot of variables of how they got there. Sometimes significant cash gift from a family member. Financing significantly less than the required minimum etc.

I have clients closing on a home this week that have an income just north of 1M per year, purchase price 2.195. Maybe I just attract very qualified/sensible clients ; ) but nobody's going broke buying their home, happily.

Thanks, Keith.

Thanks, Keith.

As an aside, the management company of our building explained that it is a very demanding and lengthy process to switch staff from union to non union.

Well, I feel like I work with a lot of buyers who feel like they are problematic for co-ops, and they want my expertise to push them over the line. Sometimes it's because they are members of groups who are nontraditionally welcome -- that's a broad catchment that includes employment, and so I'd put my Hollywood people here, as well as people who didn't grow up in the co-op system. But other times it's because they don't meet every board's financial ratios. So I'd say I have a fair share of buyers with DTI 25% to ...30something percent?

ali r.
{upstairs realty}

I would say 70% of my clients are in finance/ 20% in tech, primarily Google.

I am not in a Manhattan building but am fascinated by this discussion. My small Brooklyn coop was defrauded by its own treasurer 25 years ago (literally cleaned out the bank account and moved to Florida, declared bankruptcy and walked out on first and second mortgages), so we decided to have all 7 owners on the board. For the first 20 years I was here, we were all the middle of the middle class, teachers and comparable. We paid as we went, because that's how much money we had, and renovated stairs, replaced heating system, etc. Now we have two or three affluent owners who actually think we defrauded them by not doing more expensive renos before they moved in! We will soon need façade fixes and proposed to increase maintenance to pay. "Why not just have an assessment? Surely you can all cough up 10K. Now! If you don't have the cash, get a HELOC! And if you don't have enough money maybe you should move!" Luckily there were still enough of us old-timers on the board that we will do it all starting in the fall. Don't get me started with the big cars in the tiny parking lot and the second houses. I am getting a first-hand experience of gentrification (25 years ago I was the gentrifier) and entitlement. One guy couldn't understand why he had to break down his own delivery boxes for recycling day. Didn't we have servants for that?

P.S. We do have a guy to put out the garbage and shovel snow, and a lady who mops and vacuums the common spaces a couple of times a month. When she got COVID, we kept on paying her.

Fascinating