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A friend of mine is looking at purchasing in those mega-block post-WWII co-ops in the East Village and the Lower East Side and I'm turning towards the wonderful people of this forum for their experiences and general comments about these. The co-op charges are often quite low compared to other co-ops in Manhattan which is nice. One thing I noticed is many of them are quite far away from rail transit or any commercial and entertainment centers (as in a solid 15 to 20 minute walk) as well as generally not that great in appearance with their Corbusier sort of towers in a mostly unusable park kind of design. Another is that quite a few are in bad flood zones, but they were told that Sandy didn't actually hit them too terribly.
What are your experiences of these sort of housing and what are things to know or look out for?
Aren't they usually limited equity deals. You can by them more cheaply that free market coops, but you can only sell for a limited profit. Also don't they usually have long wait lists?
Aren't they usually limited equity deals. You can by them more cheaply that free market coops, but you can only sell for a limited profit. Also don't they usually have long wait lists?
Besides Mitchell-Lama, what are "limited equity deals" in co-ops?
^
There were a number of this type of coop started by labor unions and other non-profit organizations. I know Penn West (near Penn Station) is one. There are others started by Jewish organizations on the LES. They're not necessarily government sponsored. They likely get property tax breaks because of their status.
Also, there were programs where residents of city owned buildings could take them over as coops, again on a controlled sale basis:
Cooperative village sales prices are mainly due to the location (ie. far from transportation and commercial activity). In addition, the area isn't the most appealing and the buildings/apartments leave something to be desired. The reason for the low maintenance fees is because of the high flip tax imposed on sellers - not sure of the exact percentage currently but sellers can expect to pay back to the co-op upwards of 5% of the gross sales price when selling.
Overall, if you're looking for size and affordability in Manhattan then it's not a bad option. However, from an investment standpoint I'm not a huge fan. Over the years, the board has attempted to artificially inflate sales prices by rejecting any sales that they felt weren't high enough. Combined with the high flip tax, I wouldn't be too optimistic about achieving any real appreciation value.
Hope that helps. I'd be glad to discuss in more detail if you have any further questions. Thanks.
Best,
Andrew
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Andrew Steiker-Epstein | Licensed Real Estate Salesperson
The Corcoran Group | 30 Irving Pl, 5th FL | New York, NY 10003
O: 212-500-7000 | C: 215-431-1408 | asteiker@corcoran.com
I'd run away from buying any co-op in NYC. I have had bad experiences with the ones I have purchased and lived in. If your friend is really set on purchasing, make sure they have a trusted and educated professional review the building's financial statements and see what certified public accounting firm prepared the audit.
It's rare for a building to be run by a management company that truly cares about the tenants and the building. Most management companies figure out ingenious ways to scam the shareholders. The board members are usually in cahoots with the management company.
This is not the say there are no well-run buildings. There are!
I'm not very familiar with the buildings on the LES and downtown but I know a few people who bought in the buildings east of Grand Street and sold for a tidy profit. Timing is important if it's for an investment. But, if it is a long-term living situation
A good building will have:
A very large reserve fund for repairs and maintenance.
Is 100% owner-occupied by shareholders.
I'd run from buildings that are conversions, are partially owned by the sponsor and have had a trend of adding assessments to the monthly maintenance charge.
It's rare for a building to be run by a management company that truly cares about the tenants and the building. Most management companies figure out ingenious ways to scam the shareholders. The board members are usually in cahoots with the management company.
Any shareholder getting scammed is letting it happen to them. Boards get elected. So that means shareholders are not speaking on it. Sorry for your co-op experience, but mine has been the complete opposite - living in a co-op and being on the Board of Directors (with no prior experience of being on a board) has been a definite knowledgeable experience...but all that you said can be true, and does happen.
__________________
"The man who sleeps on the floor, can never fall out of bed." -Martin Lawrence
A friend of mine is looking at purchasing in those mega-block post-WWII co-ops in the East Village and the Lower East Side and I'm turning towards the wonderful people of this forum for their experiences and general comments about these. The co-op charges are often quite low compared to other co-ops in Manhattan which is nice. One thing I noticed is many of them are quite far away from rail transit or any commercial and entertainment centers (as in a solid 15 to 20 minute walk) as well as generally not that great in appearance with their Corbusier sort of towers in a mostly unusable park kind of design. Another is that quite a few are in bad flood zones, but they were told that Sandy didn't actually hit them too terribly.
What are your experiences of these sort of housing and what are things to know or look out for?
Not close to a train at all. And why are they so expensive....if I remember correctly, the maintenance is something retarded. They do have terraces though.
__________________
"The man who sleeps on the floor, can never fall out of bed." -Martin Lawrence
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