Open House Today 1:30-4:00pm - High Floor Corner 1 Bedroom - 407 Park Avenue South #18B

Finally, it's safe to speak your mind without being accused of attacking PAS, when you're just trying to offer helpful advice or experience.

i missed the last 250 comments. I assume everyone still thinks this apt is overpriced by about 100K considering the comps and 407PAS still thinks it is fairly priced considering the apartment's unique features. And that further, 407PAS still feels everyone is out to attack him and talk him into selling in a panic thereby sending the entire NYC RE market down another 20%, and everyone else posting here still feels he epitomizes the self-delusional, don't talk to me about reality seller who will never sell his apartment because he will never get a "market" bid?

Actually we think it's overpriced by $200K, after learning he paid $225K for the place in 2003.

I have followed this website for 2 years, and never did I feel it necessary to put forth much of an opinionated post, but my goodness I cannot believe what I have read here. I actually read through every post, and it is quite obvious to me that this place will not sell for much more than $400K. First, the owner has made himself out to be an obnoxious, selfish, bumbling idiot. I have bought and sold several properties throughout the years, and the cost of a "good" real estate broker will trump a FSBO everytime. This is THE prime example. Brokers will use this thread over and over when pitching FSBO's as example of how a person who "thinks" they are smart, actually does untold damage to their overall investment. I know because I am a broker and will do just that. Second, when you create a thread like this you invite criticism. Nobody on here is looking to puff up any listing. Most here would like to see this market continue it's downward trend to get in at early boom prices. When the owner goes on and on about how nobody else knows but him, he digs himself deeper and deeper. Most of us who follow this site agree we are at 2004-2005 prices. But thats today. I think its safe to say we went from 2008 prices to 2004-2005 prices as fast as 3 months October November December. Who is to say we wont have another catastrofic monetary event in the next month or two. Many say the next shoe to drop is the insurance industry, that effects just as many people as banking. If I were the owner of this place, I'd keep my mouth shut, drop the price to $409K, and hope like hell this whole thing blows over. If nothing happens at that price he needs to get a broker ASAP. The fact that he has the time to post all day and night on here shows how desperate he is to sell this place. 407PAS.....take it from a broker whose opinion you should respect (not all brokers are who you say they are), thats all im going to say. If you dont you will suffer tremendously.

Sticky -- you seem polite in other threads -- leave this guy to screw himself up, and , if you think he's stupid or whatever, let his words speak for themselves and let everyone make their own conclusion. It serves no productive purpose to hammer someone with epithets, although feel free to discuss substance. Frankly, I get just as irritated just looking at the idiotic sales listings just about anywhere that seem to not have noticed that the market has turned.

so..is that a douchebag discount or a douchebag mark-up?

well, I'm amazed at the connections attempted to be made at prices and brokers, that if sellers don't get as much as money as they want, it's all because of brokers - only advice I would venture to this seller is to do some math on renting the unit as an investment - calculate the owner's subsidy cost of renting at a loss, if he is mortgaged, and then weigh that against future costs in another apartment - $400K is just too much for a small one-bed with high maintenance on that avenue south of 34th - maybe he can keep waiting, though, and get a better apartment for $250K though?

$399K is probably appropriate to test the market. It is not a good area and the building's high maintenance is way too high. If within 2 months there isn't sufficient interest at $399, chop $50K and hope that attracts interest that might get between $350 and $399.

lowery: "only advice I would venture to this seller is to do some math on renting the unit as an investment"

Earlier in this thread, PAS407 stated that he thought he could get $2800-$2900 per month in rent for this apartment. Even taking his estimate as its word (dubious), given that the maintenance is $1655 per month, he's only leaving himself (roughly) $1200 in money he can pocket each month (assuming he has paid off his mortgage).

Of course, rental income is taxable, so that further reduces the amount he can pocket at the end of the year.

He probably won't get $2,800-2,900 for it in today's market, but close to it - it has a top floor view, a little balcony, is on a corner. Maybe the reason he's sanguine about his sales price in today's market is that he's comfortable with renting it out at $2,800. If the market is as terrible as some people on SE say and headed where some say it's heading, he may have decided he can profit off the downside of the market without cashing in any equity from this place. But I doubt it. I think it's a case of starting high and waiting in case someone will pay top dollar, before coming down gradually. And owners have a tendency to convince themselves of the added value of features such as being on the same corner as the #6 train, having two windows in the bedroom, top floor, etc. Who knows?

this ... will ... reach ... 600 ... comments

"Earlier in this thread, PAS407 stated that he thought he could get $2800-$2900 per month in rent for this apartment. Even taking his estimate as its word (dubious), given that the maintenance is $1655 per month, he's only leaving himself (roughly) $1200 in money he can pocket each month (assuming he has paid off his mortgage)"

Actually 407PAS said he still has a mortgage on this place way back in the thread. If you figure he put down 30% in 2003, he'd have a mortgage of $157,000. At 30yrs and 6.5% interest the payment is $992. Add that to $1,655 maintenance and you get $2,647. This apartment cannot rent for more than that. Not a chance. And on top of that many CO-OPS charge a premium to a shareholder for renting the apartment. He does not have the rental option. Besides, where will he live, a rental? He is about to waste another Sunday doing an open house. He will blame it on the brokers, streeteasy, the vast right wing conspiracy, etc. Ultimately the price is going to get another chop, then another. He claims to have all these "interested buyers" but geez if that is the case you'd think a guy with half a bit of salesmanship could get a serious dialog going. I mean he believes he's priced right, so where is the full court press? This is the one thing I dont get with FSBO'S. When an owner feels a broker is useless, clueless, overpayed, etc. he'd better be able to step in and do what he thinks a broker should. He is incapable of that. I fully admit MOST brokers are terrible. The reason is it takes nothing to become one. 95% of all the money made by brokers are made by 5% of the brokers. The other 95% of brokers are part timers, people trying it out, or living with mommy and daddy. There are some very talented smart brokers out there who move units. The sad part of it is most FSBO's are resigned to pay the 3% anyway. This guy talks such trash about brokers, he's been trying to sell this place since at least SEPTEMBER. He doesn't acknowledge it's damn hard to do this job if you are not a salesperson. I would love to see him challenge my argument, but unfortunately I got in the game here after he stopped posting. I acknowledge this site is full of broker haters and I think its very easy to hate us. All you need to do is interview enough of us until you get to a "normal" one. You will know him/her when you meet them. As for 407PAS, he will be too stubborn to do that, and while I certainly think a person can sell without a broker, you would have to be a truly special person to do it in this market without the experience and resources of a broker. 407PAS is walking a mile in our shoes now, its not so easy is it?

I'm half tempted to go to his open house myself to see if he's as pompous IRL as online.

"I'm half tempted to go to his open house myself"

Don't expect cookies if you go - that would be asking too much.

I am willing to bet that the poster will soon get closely aquainted with a broker LOL

Selling in this lousy market without professional help is crazy.

I'm pretty tempted myself to go. I'm curious about the lobby and what the doorman is like. After all, for $1655 maintenance, they have to be amazing.

You guys have hazed him pretty hard. Shouldn't you say some nice things so he comes back. He has at least provided an interesting debate at his expense, you know.

Here's one for 470PAS: right up the street from him in the nicer part of PAS north of 34th:

http://www.streeteasy.com/nyc/sale/357052-coop-20-east-35th-street-midtown-south-new-york

- about the same size
- in a MUCH cooler prewar building
- way better architectural features
- listed at $430,000 BUT just dropped to $399,000 on the broker's site
- maintenance is a very appropriate $721!

470PAS: your competition is starting to figure out the current market -- when will you? Your little terrace notwithstanding, you are COMPETING with listings like this one! The clock is ticking.

That's not a one-bedroom. It's a studio. What they're calling the bedroom is the 7x10 dressing room.

What architectural features? Those sad little railings by the step-down?

I never understood the step-down feature.
Why did they build like that?
To have lower ceilings?

West 34th's coop example has a true foyer, whereas PAS's entrance opens directly into the living room. That's the architectural feature.

PAS's is larger & has more exposures & a balcony (not a terrace, which is more desirable than a balcony) so if not for the high maintenance I'd still say his is better. But yeah they're both overpriced.

My point is that they are BOTH entry level apartments for first time buyers -- probably sinmgles -- in the same neighborhood. Obviously they are not "comparables" by definition. But if you look at the pricing history you can see what's happening:

10/11/2008 Listed in StreetEasy by Brown Harris Stevens at $475,000.
11/28/2008 Price decreased by 3% to $460,000.
02/11/2009 Price decreased by 2% to $449,000.
02/20/2009 Price decreased by 4% to $430,000.
TODAY -- reduced to $399,000!

It's the price chopping. 407PAS will be doing the same thing soon. And he is in a race with this coop for the same TYPE of buyer. There are trade offs in everything. Personally, if they were the same size (one is 575 the other 500 maybe), I'd take the prewar, and 20 E35th is a great building.

407 Park Ave South - Apt: 18C as in Caesar ;-)
http://corcoran.com/property/listing.aspx?Region=NYC&ListingID=1467394
$349,000 was $365,000 Lowered 2 days ago (3/29)

SELLER providing 2 Yrs MT. CREDIT where MT. REDUCED TO ONLY $600/Mo. This is the best studio apartment currently on the market. Incredible unobstructed bright eastern exposure from the main room and the kitchen make you feel on top of the world. With a renovated kitchen, bath, built-ins and amazing storage it leaves nothing for you to do but move right in. Full service elevator, doorman building located on the corner of Park Avenue South and 28th street, an elevator ride from the subway and just about any NY attraction.

Does anyone else get the impression that NWT = PAS407? Check out NWT's comments at the very beginning of this thread--a whole lot of over the top cheerleading for PAS407.

Actually they are about the same size. So between the two I'd definitely take the prewar as a single occupant apartment -- but I'm afraid of heights! :-)

LOL, I think you're right about NWT = PAS 407.

NWT: "You've got the pricing nailed, for both the building and the neighborhood. Especially since the other corner one-bedrooms don't have that second window in the bedroom. BTW, that's a great refrigerator choice. Like how the freezer door is same height as the adjacent counter."

PAS: "Thanks NWT. You've got it, this is the only one bedroom in the building that has a second window in the bedroom. Light from two sides is more even and pleasing than light from one side. Yes, the fridge is wonderful, I paid $3500 for it and will be sorry to leave it. Liebherr makes a quality product. I love not having to bend down to get things out of the fridge. The freezer is on the bottom."

OK, how does NWT know about the other bathroom windows in the building, and more importantly, WHO THE FUCK COMMENDS THE CHOICE OF REFRIGERATOR?!

Fuck it, his Open House starts in a little over 2 hours. Who's going with me?

LOL..This reminded me of this thread... http://lxtv.com/openhousenyc/video/9537

Sorry, no, NWT<>407PAS.

I do like his refrigerator, and said so. Of all my inconsequential comments here, that doesn't rank way up there. I think he did a good job on the apartment, and said that, too.

A cursory look at the floorplans of the building's corner one-bedrooms will show which have two windowed walls. It makes a difference.

Overall, though, the apartment doesn't need defending. 407PAS may be overoptimistic, or not. We'll know when it sells.

For the record, I like that fridge, too. And I am so totally not 407PAS.
How many comments now?
Tina
(Brooklyn broker)

Since when is selling an apartment a crime?

That said, I think he'd do much better with a broker.

"Fuck it, his Open House starts in a little over 2 hours. Who's going with me?"

I would go if only there were cookies. But you know those greedy SOBs that attend open houses - they're not really there to look at the property, what they really want is the FREE FOOD.

Oof. He's going to be heartened when there's a bigger crowd at this week's open house. Gotta be at least 75% folks who have seen this thread and want to know if he's equally annoying IRL.

pls give full report of OH ;-)

LOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOLOL!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I WENT AND WAS THE ONLY PERSON WHO SHOWED UP!!! He held up a sign in sheet for me, and I couldn't help but notice it was EMPTY!

I'd prefer to keep the discussion focused on how $489K is a ridiculous amount of money for a 650sf coop of standard (definitely not luxury) quality in a so-so part of town ... but ... BUT ... let's just say 407PAS was everything you'd expect in person, from the his comments on this thread. Tall, white, skinny, glasses, funny voice ... you'd think he was an accountant or geologist or proctologist. I didn't want to give myself away so I didn't haggle the price or press him about how much he had paid.

I think he was screening out StreetEasy visitors. He had the front desk staff ask me where I had seen the ad before letting us up (I brought a transexual friend with hot pink hair to throw him off guard, rofl!) I said the New York Times.

The apartment was clean and not cluttered but he definitely should have paid more attention to staging ... there were lots of bare walls that could have used artwork or something. WORST OF ALL NO COOKIES!

Overall a nice starter apartment--the cork flooring is nice and double exposures did let in lots of light even on this grey afternoon--but not a half-million dollar apartment in 2009, not by a long shot. He should totally price at $399K and consider himself lucky to get $350K because by the end of this year tiny 1 BRs like his won't go for more than $300K.

RE: 407PAS was everything you'd expect in person, from the his comments on this thread. Tall, white, skinny, glasses, funny voice ... you'd think he was an accountant or geologist or proctologist.

It's really cruel, but I actually did laugh out loud when I read this.

I wonder what would have happened if you said you heard about it on Streeteasy?

maybe PAS will come out of hiding and tell us what sticky looks like now :)

wow. i just want to chime in that just reading a handful of these comments pretty much turns my stomach. this guy is just trying to sell his apartment. some of the posters, the haters and criticizers need to vent their jealousy/loneliness/whatever elsewhere because it's disgusting. why would you go to the guy's open house for no other reason than to be cruel about it? get a life. good luck to the seller... try to ignore the haters.

they have a life and they're living it. don't be a scold

sorry but i'm having a hard time understanding why someone would go to a person's open house for the sole purpose to write a cruel post about it on streeteasy.

avery - since you only read "a handful of comments" you don't fully understand the depth of the post. why does someone go to a zoo? just to stare at animals??? "get a life." someone who jumps in to a conversation halfway and starts judging people in the conversation needs to worry about themselves. i would say "needs to get a life" but that is so outdated that likely only an accountant, geologist or proctologist would say it today.

i stand by what i wrote - it's horrible that someone would go to an open house just to make fun of it.

Hey I could have been much worse. The apartment has some good qualities that PAS listed and I more or less agree with.

The sole purpose wasn't to write a cruel post. It was to verify that there's no way in hell that apartment is worth half a million smackers AND to meet a delusional seller who would insist it is worth that much. Here he is calling our suggestions of how much his apartment is worth "laughable" whereas at his asking price he has literally NO ONE besides me coming to his open house.

He lives only a $6 taxi ride away so why not?

hey jackasss...

these guys have beef with each other...stay out of it...not your damn business. what are you? the protocol police? let them be. their issue.

i don't think sticky made fun of it at all. he was actually pretty agreeable on a lot of the things the owner claimed of the apartment...it is just the value that they differ on. we all know that they market will decide the price and there just might be someone out there who HAS TO have it for $475K. as i said way back when, it is really the owner's pompous know-it-all attitude that kept this post going long after it needed to. i love the fact that it lives on now long after he has disappeared.

wow. just wow. if it's not my business, then don't post on a public website. i won't post here again... i wouldn't want to anymore after reading some of these comments.

avery - you are entitled to your opinion and take on the situation. which comments did you find so offensive? i am just curious.

priceless-avery is taking his bat and ball and going home....obviously, far too sensitive...oh well, can't say that I'll miss him.

Hey I say Avery can call me every dirty name in the book, I'll sleep just fine. The same right that lets me call Larry a douchebag lets him call me a jealous lonely hater.

sticky - it would have been kinda funny if you got into an in-depth 20 minute conversation about the refrigerator.

avery is a true classic. he has left in a huff and has no sense of irony...only a sense of self righteousness. you didn't even hurt his feelings. i think the fact that you may have hurt someone else's feelings have upset him beyond recourse. oh well.

p.s. apologies to sticky for previously accusing you of being agent rachel...i feel about her the way you feel about 407PAS except more!

ROFL HE TRIED TO!!! He walked me around the place and when he got to the kitchen he began extolling the virtues of the fridge. I had to cut him off and mention that I live off the microwave or restaurants. (I could burn cereal.)

Frankly I don't see the point in trying to dazzle me with a fancy fridge. If I were in the market for a one bedroom, I'd rather pay $300K and install my own $3600 fridge than pay $489K for a one bedroom that came with a $3600 fridge, wouldn't you?

Oh, here crescent22, if you must know what I look like,

http://i44.tinypic.com/2vw8px2.jpg

At some point this becomes just really nasty. I think we're beyond that. I think it's time to let this go. Really. Enough.

Sticky, didn't you use the C word the other day? I'm very fond of anglo-saxon expletives myself, but decency has some limits.

I am rather new to SE, but I think using personal insults about an individual serves no useful purpose, and just muddies this site. Stick to substance. Far worse, going to visit an apartment, and then posting comments about the way a person looks is beyond the pale, and reflects way worse on the person doing it than the person described. By the way, I don't actually see why you think tall, white, skinny, glasses is somehow something wrong.

I think this person is probably asking too much for his apartment but he is actually, if you think about, just one example of hundreds or thousands of sellers, and big deal if he is defensive, repetitive etc.it is truly no reason to go to his home and then write a catty post about it.

In an attempt to get away from the nastiness, I'd like to get back to my under-over question. That is, I'm setting the over-under on the sale price of this apartment at $350,000.

What do you think?

Keep in mind that $350,000 represents 50% appreciation since 2003. And it's also about $70,000 than the break-even point for renting vs. buying (based on PAS407's estimate of the amount of rent he could get).

i agree that things can go too far (although i think i personally never went there), but a while back this thread became very much like
The Howard Stern Show:
some people tune in because they love it and can't get enough of it
others tune in just to see what will be said next
and then others are offended by the content, complain about it and refuse to turn the dial.

If the guy had put out a couple macaroons or something to munch on, maybe Sticky's brain would have been so flooded with endorphins that he would have made an offer. Just my 2 cents.

In the spirit of finding common ground, can we all agree that macaroons are delicious?

An apt comment Sniper. Interesting that you "think" you never went there, not sure what to make of that.

I've been working on my taxes, tuning in here for distraction, but I went from amazed at the volume of posts with a neutral view, to sympathetic to the view that the price is wrong, to irritated (when PAS407 personally attacked me because he didn't like my substantive comment), to sympathetic to this poor guy because there is so much vehemence toward him.

Meant to say: "an apt comment slope 11217"

Honestly, the reason 407PAS deserves all this is because of his stance against rent control and rent stabilization.

You sew what you reap.

Oops..Ignore my correction...It was sniper that made the "apt" comment. People commenting so fast I can hardly keep up.

so my comment isn't apt? awww.

jim - i will tell you what to make of it. i think i never went past what the guy was asking for. you and others may "think" differently. that is all that was meant by it. everyone has a different perspective.

btw - that was great when he "attacked" you, just like he ended up "attacking" everyone else who sort of felt sympathy for him at one point but then dared to utter a false word.

Only 90 more comments to get this to the magical "666" number - pretty "apt" I would say. Keep chiming, people!

Sorry 100, not 90.

LOL..Sniper, when you wrote "i agree that things can go too far (although i think i personally never went there)" I thought you were saying, given the context of the discussion of someone actually visiting the apartment, that you were referring to not having "went there" to the apartment. Maybe I read in haste.

It was amusing when he attacked me. Self-discrediting, and utterly irrelevant, and indicative of how he drove some % of the SE population slightly ....bonkers, in a way that started to remind me of Bush Derangement Syndrome. My take, after all this, is that the guy's current monthly out of pocket (maint plus mort) would rent him an equally good or better place, so he would be thrilled to actually cash in all those phantom capital gains he has been giddy about for the last three years, .....but now it may all be evaporating.

Posting will stop when it converges with the sales price!!!!!!!!!!!!!!!!!!!

"My take, after all this, is that the guy's current monthly out of pocket (maint plus mort) would rent him an equally good or better place, so he would be thrilled to actually cash in all those phantom capital gains he has been giddy about for the last three years, .....but now it may all be evaporating."

Suggesting the value of the apt may be "evaporating" constitutes a personal attack. Suggesting that he take an offer at around $400K is also an "attack" on him and his precious asset, b/c this is an "absurdly low price". Suggesting that a $130K gain in only 5 years of ownership (on an initial 270K investment) similarly is met with outright contempt. At least, in the eyes of 407PAS - long live delusion!!!

ahhh. i see how that could be misinterpreted. i could never go to the house but i do think it is kinda funny that sticky did.

This has gotten so wacko, and I wasn't in at the beginning, so I was curious and just went and read through the first say 40 or so posts to see when this turned into something confrontational. Objectively, it starts with lovey-lovely all is wonderful fluff, then two or three posters make simple, substantive points about the market and the apartment (including maint) and PAS407 overreacts with generalized comments about people on SE hating, and being negative, etc...so,,,I think PAS407 started this fight. I didn't read far enough to see who started with the personal insults.

Am I alone in thinking that PAS407 can come back if he wants? he has been surprisingly true to his abdication of his role in this drama, but now we (and he) know it isn't going to die until the apartment sells, which I estimae as roughly 392,365 posts from now.

l o l

I tried to help the guy, the next thing I know I "attacked" him. He didn't want any objective opinions - he just wanted everyone to tell him how wonderful his apt was and what a great deal it was. Whatever...now it's just diverting entertainment.

I hope PAS407 comes back. It's less fun without him and his amusing comments. For example:

Everyone else: It's insanely priced because [insert 4 or 5 completely persuasive reasons.]

PAS407: But there are TWO windows in the bedroom!!! Two windows!! And the fridge is amazing!!! And the maintenance is 65% deductible!!! And, in any event, the price already accounts for the maintenace!!

I mean, seriously, this is gold.

Is his reason for selling buried somewhere in the 300 posts he wrote?....I still think he wants to cash in his paper gains....and live in a similar place for the same monthly cost...which implies that he thinks at a minimum that further apprectiation is not going to happen, and more realistically, that he also knows the market is cratering.

Biggest issue is the high maintenance. High maintenance means distress or poor management. Doesn't mean that it is based on recent bad decisions, take General Motors ... legacy problems are something no buyer should want to assume.
At 5% interest rate or about 3% post-tax rate, an extra $100 per month in maintenance equals $40,000 of price equivalency. ($100*12 / .03).
The higher the maintenance / the higher the fixed cost, the lower the purchase price. Probably further magnified because the maintenance doesn't yield amenities and likely could be a source of distress for other residents, meaning the overall environment isn't as positive.
Unfortunately also, this is a marginal area, and likely that the year the building was built leaves a bit to be desired - not pre-war and not recent.

By the way, biggest disaster is 581 comments on something rather unremarkable.

As for the building, the lobby is so-so (dated look but at least has double-height ceilings) and the common corridors are hideous ... grandma wallpaper and popcorn ceilings.

However, I did notice Les Halles (which I love) is immediately below the building and there's a 24-hour Duane Reade and 24-hour McDonald's (I only would go there for an Orea McFlurry) in addition to the 6 subway right outside the door. The neighborhood is marginal but has its amenities. Overall I wouldn't hate living there, aside from the fact that there's no supermarket in the immediate area (2-block radius). It has a decent amount of retails & dining, way way better than, say, the Far West Side near the Tunnel or Harlem. All along I've not been saying the place or area is horrible, the problem is just the asking price is more appropriate to a large luxury studio or one bedroom in a Prime area like the Village or Meatpacking.

mattcab - interesting thoughts because earlier in this thread i think 407 and someone else who owns in his bldg. try to convince posters that because of the maintenance there should be a higher price on the apartment. also, adding two posts to the pile does make you part of the problem, not part of the solution - you realize that, no?

Besides windows in both the bathroom and kitchen, and the counter height freezer, another big selling point (even beyond les halles) is proximity to Resto - terrific lamb ribs!!

this thread is AWESOME!
thanks, all!

yeah, but after you have the padded wagon come and take away the old guy who you would see screaming at the brick wall everyday, you realize you start to miss that guy.

Les Halles is one of my favorites. I really enjoy the coq au vin for lunch at the downtown location.

Good Morning Merry Sunshine: Ohhh my goose, proximity to McDonald's is a positive attribute? Even if you're only buying that synthetic ice cream chemical stuff, the rich smell of the whole menu will coat you, perhaps even if you're just walking by. To each his own.

Mattcabb: If the maint. in this place is , for the sake of argument, roughly 600$ per month above the norm (and it might be even more above the norm), by your calc that means you should wack 240,000$ off the price, if I follow you. [It may not be true but some have said that in the late 80s you could get an apartment for nothing if you would agree to pay the maint.]

mattcab, your price equivalency arguement is full of weaknesses. you are totally forgetting about the duration of the investment. if you plan to stay in the aprtment for 5 yrs, every extra 100 dollars of maintenence should reduce the price by $6000 ( 12*100*5). with your arguement, i can sell you a property for 100k ( lets say), pay the 100 $ extra maintenance for you for a year and ask you to sell me the property back at 60k and make a profit of 40k in one year.

At the Open House, did Larry have cupcakes and fresh bread baking in the oven? Oh noooo, he's tapped out from paying the maintenance!

RE Maint: If I assume that the main. is excessive by say 600$ per month, and I assume that the excess is 100% tax deductible, and I assume that I can invest cash to yield 4% gross (taxes on which will be effectively offset by the deduction on the maint. of 600$), then to generate 12*600 , I would need to set aside $180,000 , which is the amount I should pay LESS for this apartment compared to an equivalent apartment with main of 600$ less per month.

I look at it like this because I am a cash buyer. In reality, low interest rates today make it possible that the 4% yield on cash is too favorable an assumption, but I used that money because we are talking in perpetuity.

I ran the numbers thru my mortgage pricing spreadsheet. Assumes 25% down and 5.5% 30 yr mortgage, and maint deductible at 65%:

Here's what the monthly carrying costs would be if the maint was "correct" at $1055:
Price $489,000
Mtg $2,082
Target Maint $1,055
Total $3,137
After Tax $2,548

Here's what the price should be in order to equalize the after tax carry costs with actual maint $1655:
Price $344,000
Mtg $1,465
Actual Maint $1,655
Total $3,120
After Tax $ 2,557

So all else being equal, he needs to drop the price $145,000 to equalize for the higher maint. That's $24,000 per $100 in maint. I did this fast while on a conf call so no guarantees on accuracy.

Note: I assumed a taxable income (prior to mortgage interest and maint deductions) of $150,000, and marginal tax savings of 25%. These should be reasonable assumptions for a 1st time buyer.

Note: West34's calculations support my argument for the under on the under-over that I discussed earlier (that is, will this apartment ultimately sell for more or less than $350k?).

I say UNDER. He's at $850psf now and it'll just take him too long to chop his way down to $600. By then the market will have passed him by.

west34, i have a proposition for you. i will sell the place at 489k, pay you 600$/month maintenance and buy the place from you one year later at 344k. You should be indifferent based on your analysis. I will make 145k in one year on this transaction.. do you see what is wrong with the analysis...

Um, bansalpr - there's nothing wrong with West34's analysis...

He/She wouldn't buy it at $489k even if you paid him 600k for a few years, because the exit value is 344k. He would pay you $489 and sell for $344k on year later if you paid him 600k per year into perpetuity.

What the hell does one year later have to do with anything? Maint is payable forever. For the sake of comparison I amortized (more precisely "de-amortized") over 30 years, the life of the mortgage.

Try this -- go to Excel, type in $100 360 times in a column. Now enter the formula =NPV(int, payment string), where int = the monthly interest rate, and the string is the complete stream of 360 $100 payments.

That gives you the NET PRESENT VALUE of a stream of 360 $100 payments. get it? PS -- dont argue present value of a payment stream with a former actuarial consultant.

By the way, the NPV of a 30 year monthly stream of $100 payments is $17,000! so for $600 it's $102,000

well, buster2056, what is perpetuity? 15 yrs, 30 yrs or your investment horizon? one cannot take 30 yrs worth of maintenance and convert it into upfront. Even upfront mortgage points are calculated using duration of mortgage and not life of mortgage. i can say i will keep the place for 60 yrs and thus the place should be worth only 80k based on 600/month perpetuity for 60 yrs.

bansalpr, West34 is correct in his analysis. A buyer of this unit will spend at least $600/mo more than he/she needs to, based on a similar apartment with a reasonable maint, hence increasing the effective cost as the extra maint money could be used to reduce the borrow costs of the mortgage. The only way for the seller to entice a rational buyer is to reduce the purchase price to a point where the buyer is indifferent to taking out a larger mortgage to purchase a property with a normal (~$1.25 sq/ft) maint or taking out a smaller mortgage and paying higher maint.

PAS407's apartment is a high price AND a high maint. I don't see a rational buyer making a purchase. Which is an argument for using a broker as their specialty is getting people to make irrational purchases ("buy now or be priced out forever", "real estate only goes up")

You only asked that to get the 600th post.

The question was: how much is $100 in excess maintenance worth in purchase price? Well obviously that depends upon how long you're paying the maintenance. duh. Given the fact that the normal mortgage assumption is 30 years, one would assume that you're also paying that extra $100 for 30 years. If you're only buying the place for a year then OBVIOUSLY the price differential ISNT $140,000. jeeze