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Of course, these deals are so lucrative not because it’s a closed market with insiders trading apartments but because you’re a true genius that figures out what everyone else couldn’t.
Just give it up. You literally lucked into a deal due to a heavily regulated market. I have a close family member invest early in bitcoin and cash out $7MM net but he’s normal and doesn’t tell everyone at the first opportunity because it shows how clever he was.
If you figured out some secret, have you done more of these deals? Why do you only mention this one? Maybe because this was the only one you lucked into?
retired and done . don’t want any more tenants to deal with . it was a decade long unwinding of those apartments….now i want only my investments that can be bought sold and swapped with the click of a mouse
The maintenance went up a lot in the past few years, mostly due to the coop insurance (I was told by the board ppl, and they said this is a problem for all the coops and condos in NYC). Our maintenance is $2,287/mo for the 925 sq apartment. That is reflecting the last increase on Jan 1, 2024. I was told that it may not rise as much in the future, but this is just a promise.
Our building is well managed with good financials. Very good people on the board too. And quite relaxed about the financing rules (only 20% down required). Also, pets are allowed.
That's an alarming figure, and one that I'd wager is a major reason for what you're seeing today. And maintenance fees only move in one direction (up, never down).
I'm curious to know the history of sales in your building (in terms of recent sales and what price point they were compared to what the monthly maintenance fees were given that you mentioned that fees have gone up a lot in the past few years). Here in Honolulu, the new super luxurious condos still have zero problem selling out, many buyers are paying millions of dollars (all cash) to make it happen. But other, still nice buildings with high maintenance fees and pending expensive maintenance projects (re-piping projects, etc.) are having a much harder time selling . . . at least compared to a couple of years ago when interest rates were much more favorable.
At ~$800k for a two bedroom condo in a prime part of Manhattan, that just doesn't seem like the price point for a building that people who have zero money issues are begging to buy in during these higher interest rates (compared to the last few years that people became accustomed to). We're of the income bracket where we can afford to buy that unit (even with the high monthly maintenance fees), but it's not one that we would buy in large part due to the maintenance fees (which again won't be going down).
** I misspelled the word "apartment", but cannot edit the heading
We trying to sell our 2br coop on the Upper East Side (great location, Whole Foods nearby, zoned for 2 amazing schools, Q line around the corner, 4/5/6 is 5 min walk, quiet, 24hr doorman elevator building, private garage), but no one is even showing up for the open house, even though we dropped the price several times, and it's now, honestly, way below market.
We are using a great RE agent who has sold lots of apartments in the past few years, including several in our building, it's listed on the MLS and StreetEasy, so obviously shows up on Zillow and other sites. The listing looks great (professional pictures the agency took). But the market seems dead, 3 people showed up for the 1st open house. Not a single one for the 2nd and 3rd, even though we dropped the asking price from 830K to 799K.
How to market this apartment to get people to at least visit and see it?
Co-op units have been at a disadvantage for a decade or more now; there's just so much new luxury condo inventory coming online. Still more is planned or being built across Manhattan including UES so there's that to consider.
Next comes fact people can use debt to buy a condo, but not usually fully a co-op. It will vary by building but few co-ops allow 100% financing.
Then there is fact whole board approval process for co-op just rubs certain people wrong way. Again with so much condo inventory coming online or in works people have options. This includes fact downtown Brooklyn isn't "no man's land" socially it once was considered.
Finally with high interest rates many people aren't buying anything atm. Yes, for those who can swing all cash deals that doesn't matter, but for everyone else...
banks consider coop loans risky since not only is a personal mortgage junior to any maintenance owed but it’s junior to any outstanding mortgage the building has .
so a personal mortgage is actually a second mortgage in the scheme of things.
banks usually charge a higher rate for coops or won’t loan at all .
we once looked in to what is called a reverse mortgage to purchase
that is where you put down about 40% and never make another mortgage payment again .
a side from the fact fees and interest rates were ridiculous on this method and are higher and ate up any equity you had in no time , they won’t do it on a coop , only condo or private home
The maintenance went up a lot in the past few years, mostly due to the coop insurance (I was told by the board ppl, and they said this is a problem for all the coops and condos in NYC). Our maintenance is $2,287/mo for the 925 sq apartment. That is reflecting the last increase on Jan 1, 2024. I was told that it may not rise as much in the future, but this is just a promise.
Our building is well managed with good financials. Very good people on the board too. And quite relaxed about the financing rules (only 20% down required). Also, pets are allowed.
is there a mortgage that the building has , that some of that maintenance is going for ?
keep in mind with a coop there can be two parts to its value .
it’s like the first investment coop we bought in 1987 in kew gardens Was 77k back then .
but the building had a mortgaging holding another 30k in value .
actual cost of that apartment was 77k plus the 30k the building held .
if it was a condo i would pay 107k . but as a coop i pay 77k and pay the other 30k thru maintenance charges .
as the mortgage gets paid down that equity shifts to me .
but some buildings took interest only loans so they may still have mortgages .
so you can’t just compare maintenance fees without knowing if a building mortgage is involved
the benefit of the coop structure originally was so renters in coop conversions who were basically renters because they didn’t have the resources to buy , could stand a better chance of getting a mortgage with out their bank being on the meat hook for the whole amount .
it took 15% of tenants to buy to get a conversion thru back then .
so by the building having their bank share in that mortgage banks loaned easier .
but over the years banks had to many issues with these same coops. since their mortgage was junior to the buildings mortgage and maintenance.
so coops went from easier to get mortgages to harder or more costly rates
Also, on the horizon is the heat/cooling improvements the city is putting on the books. If you have an older building and are buying for more than a quick investment or short term place to live, significant costs could be coming to your maintenance overcoming any savings from buying.
you can throw an address in here and see potential penalties . by 2030 a lot of buildings will be due for an upgrade anyway as equipment is always reaching end of life after a certain amount of years
What are the required liquid assets after closing? The interest rate rise has had a brutal effect. I'm guessing you're somewhere in the $6K/mo. zone for mortgage/maintenance. If your building requires 2 years (standard), that's another $144K the buyer will need to have at their disposal (not in retirement accounts, either) in addition to the ~$160K down payment/closing costs. That's got to be a drag on sales in this range.
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