Buying in an all rental building

i dont the owner will want to sell as he will have to go through enormous legal steps to separate the unit, create a conodo or coop, etc. Also you will never get a mortgage on a unit in an all rental building.

Banks dont like giving mortgages on units in buildings with more than 25% rentals.

its not going ot happen.

Thanks petrfitz for your reply.
I would be buying cash, so no need for mortage.
Would legal costs be prohibitive even for a property purchase price >$2m?

Assuming the owner would be willing to sell (which I doubt), I guess the issue I see here is lack of control. If the owners wanted to sell the whole building in 10 years when the market is better to a condo developer, I am pretty sure they could (even if you had voting rights you wouldn't have control).
I am sure you could write into the contract that they would owe you "fair market value" should this happen, but this is still difficult to determine. I think the ultimate risk of the owners selling the entire unit to a developer who wants to gut the units would be too high for me ..

Also, if you ever want to sell, not many people would want to buy such a unit ...

I don't think that the legal costs amount to much. But as an investment goes, when you ever want to sell it there will be way less people paying all cash -a big disadvantage if you ever need liquidity- so maybe the price should reflect this.

I could be interested in a all-rental building, actually, as they probably have less restrictive rental policies (would they?), and I spend only 2 months a year in NY. Let me know what happened.

Imagine owning a coop apartment in a building where the sponsor owns 99% of the units. That is effectively what you are proposing. I would not find that to be an attractive place to be.

This sounds like the worst idea ever. Why would you expose yourself to risk like that?

If you really want the apartment, you'd be better off trying to convince the owners to convert. Talk to your neighbors. If enough are interested in buying it could be worth approaching management.

IMO it's unlikely you'll get much of a response, though, especially in this economic climate. But hey, you never know.

The way I see it is that you gain absolutely nothing. You give the owners >$2m & you're still in a rental bldg with zero control. I'd suggest that you start looking at coops & condos in your immediate vicinity since you apparently want to buy something; the prices are softening as we speak.

jrd - sponsors have no voting rights. so if you live in a building with 99% sponsor ownership, you would have complete voting rights. To make this deal happen the sponsor would essentially have to give away his control of the building to 1 owner, set up a budget that the 1 owner would have control over etc. So this is not likely to happen.

He maybe could not go co-op but go condo and the voting rights would not be an issue because the building owner would not be a sponsor. Even still, this is very unlikely to happen for many reasons.

I'd also think you'd have to figure out ongoing overhead/maintenance. These items are covered by your rent, but if you own, what would your obligations be if the building needs a new boiler or the roof needs repair? or if the building's owner wants to refurbish the lobby to attract new tenants?

These issues are typically covered by condo/coop arrangements.