Are You a Condo Person or a Co-op Person? What you need to know about NYC's most popular properties

Welcome to Episode 4 in my Series REAL ESTATE INVESTING IN NEW YORK!! Topics covered in this Episode: ☆ Everything you need to know about Condos and Co-ops ☆ Similarities and differences ☆ Approval processes ☆ Are you a Condo person or a Co-op person? NOTES FOR THIS EPISODE: CONDO AND CO-OP SIMILARITIES: ☁ NYC's most common property types ☁ Managed buildings ☁ Both have Executive boards ☁ Both vary in terms of their policies ☁ Both have extensive due diligence process to purchase ☁ Both have monthly maintenance fees ☁ Both appreciate over time ☁ Both require an application and approval for purchase CONDO-SPECIFIC CHARACTERISTICS: ☁ Considered Real Property ☁ You receive a deed when you close ☁ Many of the newer buildings in the city and luxury New Developments are condos ☁ Priced at a Premium, about 30% more expensive than co-ops ☁ Management reserves the Right of First Refusal before apartment is sold ☁ Minimum 10% down payment (usually) ☁ Easier review/approval process ☁ If you have the finances to make the purchase, you are typically easily approved ☁ Monthly fee is called Common Charges ☁ Property Taxes are paid separately directly to the city, not to the Condo ☁ Higher Closing Costs: Title Fees and Mortgage Recording Tax ☁ Tend to have more flexible building policies ☁ Subletting is usually allowed and more flexible ☁ Tend to have more transient residents (renters) ☁ Ideal property type for investors and non-US purchasers COOP-SPECIFIC CHARACTERISTICS: ☁ Shares of a Corporation ☁ You receive a Proprietary Lease when you close ☁ Many of the older buildings with character are co-ops ☁ More affordable - about 30% less expensive than condos ☁ No Right of First Refusal, but very diligent and thorough review/ approval process ☁ Minimum 20% down payment (usually) ☁ Financial review during application looks into income and employment history, assets, bank accounts ☁ Financial requirements to purchase include DTI Ratio and Post-Closing Liquidity ☁ Board application is tedious ☁ Board interview is required for purchase ☁ Co-op Boards typically have more power over purchases and sales in the building and building culture than Condo Boards ☁ Monthly fee is called Maintenance, and it includes Property Taxes. The % of the Maintenance fee that is your property tax can typically be written off when filing taxes ☁ Typically has a Flip Tax ☁ Lower Closing Costs ☁ Community focused, often with stricter policies ☁ Subletting is usually not allowed or regulated/limited with associated fees ☁ Ideal property type for Primary Residence ☁ Can be difficult for non-US Citizens to purchase Don’t miss the next video which will explain the property purchase process! If you ever have Real Estate related questions, feel free to Email me any time: [email protected] Follow me on Instagram: @downtownnative Discover the value of your home: https://bit.ly/2Z91OLE If you enjoy this podcast, I would truly appreciate you giving it a 5-Star review so it can reach more people! Please subscribe!