Calling NYC dwellers

[lovelylulu]

harriet, I don't have much to add to your specific situation, but you've gotten fantastic advice.

I just wanted to say that I appreciated the posts by starryeyed, beacon and others. Your posts are filled with great information. As one half of a young couple looking to buy their first place, I've found you all to be very helpful.

Do you have any recommendations for research materials? I've read lots on the web, but much of it seems to be superficial or overly simplistic - i'm particularly interested in trying to figure out whether or not it makes better sense to remain a renter or become a buyer in our market - DC.

Thanks again

 

[Harriet]

Date: 4/18/2007 10:05:39 AM
Author: curlygirl

Oh yes, the price went down from the red herring price--but only for insiders. We got a whole tenants'' group together and got a lawyer and engineer to go over everything for us. They actually dealt with the sponsor''s lawyers for us and somehow negotiated the prices down for insiders--if I remember correctly, they lowered the prices TWICE! I don''t know how your building works but I suggest having the tenants all meet up to talk about the situation and definitely fight for lower prices. By the way, the whole conversion process took over a year from when we received the red herring until we finally closed. So even though it seems like it''s all very timely, these things take a while to go through. The NY state attorney general''s office needs to do their due diligence and often times, these conversions end up being abandoned. I hope that doesn''t happen for you because I think you can probably get a great deal but I really recommend joining forces with other tenants to stay on top of things that are happening...

Great! We''ve already started talking with our neighbours. Btw, there was a recent case about a condo conversion. The judge ruled that market-rate tenants could not be evicted even though their leases had run out.

 

[Harriet]

Lovelylulu,
Why don''t you start your own thread to get the attention of DC residents? Not that I mind you piggybacking.

 

[lovelylulu]

Date: 4/18/2007 11:07:03 PM
Author: Harriet
Lovelylulu,
Why don''t you start your own thread to get the attention of DC residents? Not that I mind you piggybacking.

harriet, a while back i did start a thread about DC and first-time home buying that got a lot of interesting responses. but, when this thread popped up, I just wanted to throw in a bit of appreciation to the advice given here.

 

[Skippy123]

Lovelylulu,
How exciting to live in DC!!!! I love it there. Actually my in-laws are from Virginia and my hubby had to go work out there maybe 2 years ago for about 4 months. Of course I had to visit

 

[Harriet]

Date: 4/19/2007 9:03:46 AM
Author: lovelylulu

harriet, a while back i did start a thread about DC and first-time home buying that got a lot of interesting responses. but, when this thread popped up, I just wanted to throw in a bit of appreciation to the advice given here.

Did you get good DC-specific info? No offence meant on my part. And, yes, people have been very helpful here.

 

[Harriet]

Skippy,
What was your pet calf''s name? What a nice present!

 

[Nicrez]

Date: 4/18/2007 11:04:57 PM
Author: Harriet

Date: 4/18/2007 10:05:39 AM
Author: curlygirl

Oh yes, the price went down from the red herring price--but only for insiders. We got a whole tenants'' group together and got a lawyer and engineer to go over everything for us. They actually dealt with the sponsor''s lawyers for us and somehow negotiated the prices down for insiders--if I remember correctly, they lowered the prices TWICE! I don''t know how your building works but I suggest having the tenants all meet up to talk about the situation and definitely fight for lower prices. By the way, the whole conversion process took over a year from when we received the red herring until we finally closed. So even though it seems like it''s all very timely, these things take a while to go through. The NY state attorney general''s office needs to do their due diligence and often times, these conversions end up being abandoned. I hope that doesn''t happen for you because I think you can probably get a great deal but I really recommend joining forces with other tenants to stay on top of things that are happening...

Great! We''ve already started talking with our neighbours. Btw, there was a recent case about a condo conversion. The judge ruled that market-rate tenants could not be evicted even though their leases had run out.

Hey Harriet!!!

I thought that when there is a conversion, usually the offer prices to former renters is the first and lowest prices on market for the apartments, no? Three of my friends who have gone through what you have have gotten the offers before they hit market and they were usually at a discount. I agree with Curlygirl, there is strength in numbers... Of course as an attorney, I don''t have to tell you, but the best way to reduce their price is to weaken their argument that it costs what it does. Engineers and realtors are excellent corroborating experts to help, if the building as a group deems it necessary...There is always cost involved in converting Rental to condo, so check the infrastructure by a trained pro and maybe factoring in those costs, you can bargain their prices down???

Good luck!!!

 

[Harriet]

Hey Nicrez,

Haven''t seen you in ages!

The price we have been given is not the final price. The conversion can be done only upon approval of the Attorney-General, a process which will take months. There will be a discount for insiders, but not much. I do agree that some collective action is called for.

 

[Nicrez]

I appear and reappear based on schedule. With the upcoming business trip soon I will be completely immersed until mid June at least, but I find this a stress relief. (yet I am stressing over that last post, aren''t I?

) I just get riled up by entitled behavior, perhaps.

I still say NEGOTIATE. I am all about that. I''m a fiend for luxury, but when there is room to negotiate, I am like a Middle Eastern market shopper! Actually when in the Middle East I was bargaining and they love it! China town is SO easy compared! So if you need a tough voice bargaining them down, you let me know. We''ll go to Neiman, buy some shoes then give them hell! (I need shoes to get going. It''s like my caffeine!)

Good luck, and keep us posted!

how''s the wedding planning going? Did you find a place in NY you liked? I am SO out of the loop, sorry!

 

[Harriet]

Where will you be going? Anywhere fun?

We can''t legally negotiate until the conversion is approved. But believe me, I will bargain. I''m Asian -- haggling''s in my blood.

I didn''t know there was a Neiman''s in NY (I thought all we had was Bergdorf''s), but I''m game for shoe-shopping.

The wedding plans are crawling along. We''re both very busy at the moment. We''re still considering Jean-Georges though.

 

[Nicrez]

Sorry, I was just on the Neiman website *ashamed*...there is none in NY, my bad! I want to go to the original store one day in Texas... I never realized it was over 100 years old!

I''m going to Vegas, but it''s my first time oddly. I am not a fan of gambling. Maybe because I stink at it, and I hate losing money without getting something fun to play with and the actual act of LOSING it, is not my idea of fun...

Not all Asians bargain! My friend who got married in Key West was very chill. She is also NOT a typical Asian. But then again all my Asian friends are so a-typical I don''t know if one does exist anymore... She''s hysterical. She loves football, drinks beer, hates dressing up, and actually she''s a very accomplished attorney as well.

Jean-Georges is a fantastic choice...can''t wait to hear about the progress!

 

[Harriet]

Oh oh, I hope I don''t get flamed for over-generalising.

I''ve only been to Vegas once. I didn''t quite care for it since I don''t gamble (I''m very risk-adverse).

Come help me with my earring jackets, pretty please.

 

[rocks]

hi harriet,
i live in the neighborhood (74th and 3rd) in what would be considered a luxury coop. how big is the apt you are considering? does the building have a gym? does each apt have a washer/ dryer? does the building retain rights to the garage? does the $1400 include utilities? $1400 in common charges for a condo is on the high side, even for a small two bedroom. for a condo in an existing building in the neighborhood (i am on my co-ops board and see comparables all the time). as for the apt on the river...that is a whole different neighborhood...prices drop substantially as you travel east from 2nd avenue (luxury building or not) with the exception of sutton place. new buildings are a whole other story...and there are several going up between 60th and 79th, most of which will be completed in the next two years. also, do alot of research on the developers prior projects/conversions...our sponser is a great guy...but that is rare. my friend bought in the heyworth (chelsea), pre-construction, and it has been a nightmare.

on the very positive side, i have been in my place for about 10 years. it is worth almost 6 times what i paid. also, 5% down is something you will not find in anything other than a conversion. typically, good coops require 25 to 35%. buildings on park and fifth can require as much as 50% down, and some are even all cash!

good luck!

 

[Harriet]

Date: 4/25/2007 11:13:18 AM
Author: rocks
hi harriet,
i live in the neighborhood (74th and 3rd) in what would be considered a luxury coop. how big is the apt you are considering? does the building have a gym? does each apt have a washer/ dryer? does the building retain rights to the garage? does the $1400 include utilities? $1400 in common charges for a condo is on the high side, even for a small two bedroom. for a condo in an existing building in the neighborhood (i am on my co-ops board and see comparables all the time). as for the apt on the river...that is a whole different neighborhood...prices drop substantially as you travel east from 2nd avenue (luxury building or not) with the exception of sutton place. new buildings are a whole other story...and there are several going up between 60th and 79th, most of which will be completed in the next two years. also, do alot of research on the developers prior projects/conversions...our sponser is a great guy...but that is rare. my friend bought in the heyworth (chelsea), pre-construction, and it has been a nightmare.

on the very positive side, i have been in my place for about 10 years. it is worth almost 6 times what i paid. also, 5% down is something you will not find in anything other than a conversion. typically, good coops require 25 to 35%. buildings on park and fifth can require as much as 50% down, and some are even all cash!

good luck!

Hi Rocks,

Thanks for the helpful input. My apartment is 1200 and something square feet. There is a gym, but it''s useless. I''ll check to see if the maintenance includes utilities. You''re spot on about the low downpayment.

Incidentally, if this doesn''t work out, we''ll be moving to the Solow on 72nd and the river.

 

[rocks]

you also need to know what the real eatate taxes will be. as i recall, the real estate taxes are not included in common charges as they are in a coops maintenance charge. for a new conversion, and a condo, you can expect relatively high taxes. the upper east side has disporportionately high real estate taxes relative to the rest of the city.

 

[Harriet]

The $1400 includes taxes and carrying charges.

 

[rocks]

that really isn''t bad for a 1200 square foot apt on a high floor. it''s high for a condo, but not bad.

 

[Harriet]

We don''t have much by way of amenities -- a pointless gym (with sauna) and a roof deck. We are heavily staffed though. Do you know the building? It''s above the UA cinema.

 

[rocks]

yes i do. staffing is always an issue for a full service building (amenities or not). have they assumed that all staff will remain after the conversion? what you have in your favor is that it is a large building with alot of owners to absorb the costs. we only have 13 floors and about 105 apts. we could almost double the size of the building and only need nominally more staff. we don''t have a "concierge" but the doormen do most of what a concierge would do. we have alot of security and a self park garage that is owned and operated by the corporation as well as laundry rooms on every floor (washer dryers are not allowed unless they were installed before the conversion).

if i were you, i''d do some shopping to satisfy your urge to research the true value of the unit. financially speaking, getting in upon conversion can be terrific, but it can also be a headache. get as much info on the developer and his prior conversions as possible, especially any pending litigation...it usually isn''t hard to find...

 

[Harriet]

Date: 4/25/2007 5:37:11 PM
Author: rocks
yes i do. staffing is always an issue for a full service building (amenities or not). have they assumed that all staff will remain after the conversion? what you have in your favor is that it is a large building with alot of owners to absorb the costs. we only have 13 floors and about 105 apts. we could almost double the size of the building and only need nominally more staff. we don''t have a ''concierge'' but the doormen do most of what a concierge would do. we have alot of security and a self park garage that is owned and operated by the corporation as well as laundry rooms on every floor (washer dryers are not allowed unless they were installed before the conversion).

if i were you, i''d do some shopping to satisfy your urge to research the true value of the unit. financially speaking, getting in upon conversion can be terrific, but it can also be a headache. get as much info on the developer and his prior conversions as possible, especially any pending litigation...it usually isn''t hard to find...

It''s 1250 square feet (actually, I asked how many carats it was!), and we have our own washer-dryer. I''m not sure we have that many more units than you do. It''s pretty skinny. There are only 3 apts on my floor.

Good suggestion re pending litigation. I can find that info quickly.

I wonder if rental income from the cinema will come to us.

 

[Beacon]

Date: 4/25/2007 4:40:48 PM
Author: Harriet
The $1400 includes taxes and carrying charges.

Wow - how can that be? Are NY taxes very low? I figure a condo like you are talking about must cost like 1.4MM, more or less. In california, the prop taxes on that would be minimum $14000 per year. So, how can your property taxes and other maintenance expenses and insurance be covered in your $1400/mo assessment. Can it be true?

Downpayments are mandated to be very high in coops, but not in condos. Coops are much harder things to trade - I like the legal structure of a condo much better but I realize NY is literally it''s own island.

 

[rocks]

that should all be spelled out in the offering prospectus. it could go either way. also, you need to know what kind of reserve fund is proposed, and what representation new owners will have in the owners association since the sponser will retain majority ownership for a while. you also need to know what kind of deferrred maintanence may be needed (local law 7 ? 11?...the one requiring facade work etc), and contracts or leases you may inherit etc.

 

[rocks]

we also have a state income tax and a local income tax, as well as a sales tax of almost 9%

 

[rocks]

we also have a mortgage recording tax (city and state...separate), and a "mansion" tax which is 1 or 2 % of the purchase price for anything over $1mm. a house outside the city in any decent neighborhood will have real eatate and school taxes of $20k or more, and that is for an old house. new ones can be $30k or $40k.

don''t get me started.

 

[Beacon]

Yah, I know you guys have a city tax and I know your sales tax is high. I am kinda joking about "can your real estate taxes be low?" I rather doubt they are! So that is why I question property taxes being included in a monthly assessment of $1400. It''s just not enuf money to pay prop taxes and actually maintain the building. So something is out of order on that one.

In any case, it is not so good to pay your property taxes monthly to a condo association. This we would never do in CA, though NY might be much different. I would rather pay my property taxes directly to the government agency that collects them and bills me for them. Coops are different, I know, but that is due to their legal structure. Condo should not demand prop taxes in the monthly fee, I think.

 

[Beacon]

Man, what a disaster of taxes. Harriet should run an AMT projection to see if she gets caught in it due to all that tax.

 

[rocks]

oh...and noone sends their kids to the schools in the city. so...you have the pleasure of $14k tuition for nursery school, which increases to about $25k in primary school, and almost $30k in high school. as i understand it, real estate taxes are school taxes....

 

[rocks]

yup. we bought a house in east hampton, and in part could afford it becasue the taxes are low!

 

[Harriet]

Date: 4/25/2007 6:25:51 PM
Author: Beacon
Man, what a disaster of taxes. Harriet should run an AMT projection to see if she gets caught in it due to all that tax.

There is a good chance of our being hit by the AMT.