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Example: Co-operative Deal

So the question is, how do you go about purchasing a co-operative as an investment property? We're here to help, take a look at the example below. Here's an co-op property purchased as an investment property.


What is a co-op? Let's clear things up from the start by offering some definitions from Wikipedia:

Market-rate housing cooperatives, members may sell their shares in the cooperative whenever they like for whatever price the market will bear, much like any other residential property. Market-rate co-ops are very common in New York City.

Limited equity housing cooperatives, which are often used by affordable housing developers, allow members to own some equity in their home, but limit the sale price of their membership share to that which they paid.

Here's co-op example to take a closer look at:

Location: 61 Horatio Street, New York, NY 10014
Price: $610,000
1 br ba 560 sqft
Type: Coop
From: www.urban-sanctuary.net
Listing Type: Resale
Status: For Sale
Year Built:
Price/sqft: $1,089
Lot Size:
Days on Market: More than 30 days
ZIP Code: 10014

Neighborhood: West Village

Additional Info: Prior sale history, Assessor records

Adorable 1 bedr/West Village/Best Price/Low Maintenance/Elevator Amazing opportunity! One bedroom, great closet space, stainless steel kitchen, large bathroom, laundry room in the building, elevator and a beautiful rooftop deck. Low maintenance! Located in the heart of West Village.

Agent: Marianni Ebert
Read more at www.urban-sanctuary.net

Rough Numbers:
Down payment:
Loan amount:
Property tax rate:
Expenses: % of gross earnings
The median home cost in New York is $658,600. Home appreciation the last year has been -0.42 percent. This is from Best Places.net

Loan amount:
Interest rate:
Loan term:
Annual tax:
Annual insurance:

Monthly Principal + Interest:
Monthly tax:
Monthly insurance:
Total monthly payment:

Interest payment per year:
Mortgage payments for the year:
Principal payments for the year:
Per year appreciation growth:

Gross income:
Operating expenses (managing property, landscaping, insurance, property taxes, painting - there are fixed and variable expenses):
Loan payments:
Cash flow =

Link

Extra: From the New Yorker magazine, named buildings generate increased interest in co-op buyers. Meaning, calling your building, 'The Stanton' versus no name or even just 450 (the address number), will draw more interest than if there wasn't a name. Sure, some names come across as too pretentious, but naming the building just makes it easier to reference--in a way the building becomes a brand and more real.

Notes: What's the difference between a TIC and a Co-op? Or what's the difference between a co-op and communal living in Berkeley, California? A co-op isn't communal living like in the 1960s of Haight Ashbury, or I guess it could be, but the key is the joined economic goal of maintaining the property and eventually earning money through the property. In a way a Co-op is not that much different than a renting to own.



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