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Archive for September, 2006

Things I learn (and wish I knew) getting a NYC coop

Things you need to do before you find a place

6 months before you buy, get a copy of your credit report and put a credit watch on

Even you don’t think you need this, it is a good pratice to verify all information you have on there is accurate. You don;t want to find out last minute

Look at different places, big and small, in different neighborhood

When you are first looking, look at everything, so you get an idea of what the market is like. A good website to start looking is streeteasy.com. They list out what’s the average selling price per square foot, what’s the price trend in that neighborhood and in that building, what school is in that district. It can also be a good bargining tool when you make your offer.

Find a mortgage broker

Even tho if you know you can get a mortgage, you should still get a broker right away. Not only can you know how much you can borrow (which is not important), you also know what rate you are getting, and what the payment is going to be. Going in with a preapproval is a great bargining chip, as well as a monthly payment amount. Here’s why. Coop owners need to sell it to someone who will pass the board approval. If someone comes in and gets declined by the board, the seller would have wasted 2 months. One of the thing the board looks at is your income to debt ratio not to exceed 33% of your income. Which means if your paycheck is 6K, the best you can do is $2k a month including maintaince. If that’s what you make, you can use that as a bargining chip to the seller, as it is also in his best interest to see the buyer get approved by the board. And if you are approved and ready to go, you are even more likely to get approved.

Find a good property lawyer

This is VERY important. Since he is the only person you would pay directly, he will work in your interest. He have seen enough deal and will know if something is off immediately. He will also be able to tell what can possiblily to wrong, and which button you might push to lower the seller’s price. I used Chak Chong (chak.chong.pllc@gmail.com).  Great guy, very detail oriented and take his time to explain everything.  Will definitely use him again.

Things you need to so when you found a place you might be interested

make an offer, 20% below asking

Yes. Kinda like asking someone out I think. The intend is to let them know you are interested. The eyes of the agent lights up, you can get them to do things. But most importantly, you can get an idea of what the situation is. If you feel the pressure coming at you to make another offer, then they are desprate to sell. If you feel that they don’t care, that means you have competition. They can only have their nose high for so long if no one is interested. If you really like it, read on.

Things you need to do before you make your final offer
Go to streeteasy.com and propertyshark.com

These are the two greatest invention for buyers I think. streeteasy give you details like how long the place has been on the market, has it drop its price since, what are similar size apartment in the building is selling for, what can the place be rented for. These are all your bargining chip. Usually the expected discount 1.5x or greater than the mortage payment for the length the place has been on the market. Propertyshark shows you building financials, what time did the current owner move in, what price did he pay, building history, etc.

ask for the building financials

with coop you are buying a share of the company that owns the buildinng, which in terms lease it back to you at a fee (your maintainace fee). The book value of your shares is usually some rediculous amount like $10K, but along with it came the right to live in the space for $600 a month, as long as the comapny has enough money and doesn’t need to ask for more money. What is why you need to look at the building financial. Look at it like you are investing in a company. Look at if it has free cash flow. Look to see when it needs another face lift. Usually they don;t volunteer that information, but if you ask for it, you can usually get it. Have your lawyer look at it before your final offer. In this case, since the real value in the transaction is in the space not the share, the less share you get the better, since it means less maintainence.

Go talk to your lawyer.

run through everything with him again. What kind of work the apartment needs, what are your concerns and so on. You are paying him for that. Have him read the minutes. Find out when’s the board meeting schedule. Time it so that your final offer is 3 weeks before the board meeting. The sell knows if he misses that window he would have to wait another month before this window opens up again. It is your chance to bargin. (Not unlike hitting on girls who are 28-29)

Now you are ready to make your final offer. Good luck. I will let you know about closing once I close.

1 comment September 21st, 2006

London

The weather in London was surprisingly nice last weekend. It was nice to see Edith and her girlfriend. I helped them move for the first day, and had brunch at Kensington Palace the next day. It was espcially nice seeing a good friend enjoying her work, enjoyign her life. What more can you ask for?

Celebrate my other friend’s birthday. Missed a train. I was insulted for 3 hours straight. I guess birthday trumps everything esle. At least my fantacy of being touch by 3 different men was fulfilled at the airport. I guess I didn’t go there for nothing.

Add comment September 13th, 2006

Guang Zhou

I am slowly appreciating the growing pain of GZ software industry. Without the experience ahead of them, the only way to catch up is by working extra hard to finish the last mile.  As unpleasant as it is, people are tryign hard.  Saw this girl again at the hotel.

Placed a bid for a place. Waiting to see what happen.

Add comment September 6th, 2006


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