Foo - Real Estate advice needed: to buy, or not to buy....

...that is the question.

My wife and I have lived in a rented apt. for 11 years. The landlord just asked last month if we would like to buy it. The place is decent-sized for two people, in a pretty good neighborhood (not posh, but safe, and convenient transit). here are some issues:

1. It's a co-op and that means we'd need to put down 20% min. That would clean out our cash reserves and maybe dip into retirement funds.

2. at 1000 sq ft, with lots of closets, it's great for a couple, but we are strongly considering having a child, in which case we would need to sell in a few years. Or, if we made it to five years, we could sub-let.

3. His pitch mentioned our mortgage with taxes would be less than what we pay now for rent (about $1200 vs. 1400). Unfortunately we'd also pay maintenance fees, which are being raised so the building's roof can be fixed (work going on now). That's another $900/mo. So we'd actually be paying more like $2100/mo, up from 1400. Yes, we'd get tax breaks but i figured that would only be a few thousand/year, we probably wouldn't break even.

4. The roof fix is supposedly to correct leaking which destroys the wall plaster. The roof and masonry pointing have been 'fixed' three times since we've moved there, and the walls are still crumbling. I'm concerned about lead paint and mold, especially with a baby in the apt.

The main attractions to buying now would be :

1. Take advantage of low interest rates
2. Avoid the hassle/stress of getting booted when our current lease is up (I believe that's in April)

I should also mention, the building is from the 1930s, and there hasn't been a whole lot done to our place. We'd have to gut the kitchen for sure, probably the bathroom too, and then do basic cosmetic work such as painting. Some of you may recall our somewhat odd wiring issues, so I'd want a qualified electrician to come in and give the place a once-over.

...that is the question.

My wife and I have lived in a rented apt. for 11 years. The landlord just asked last month if we would like to buy it. The place is decent-sized for two people, in a pretty good neighborhood (not posh, but safe, and convenient transit). here are some issues:

1. It's a co-op and that means we'd need to put down 20% min. That would clean out our cash reserves and maybe dip into retirement funds.

2. at 1000 sq ft, with lots of closets, it's great for a couple, but we are strongly considering having a child, in which case we would need to sell in a few years. Or, if we made it to five years, we could sub-let.

3. His pitch mentioned our mortgage with taxes would be less than what we pay now for rent (about $1200 vs. 1400). Unfortunately we'd also pay maintenance fees, which are being raised so the building's roof can be fixed (work going on now). That's another $900/mo. So we'd actually be paying more like $2100/mo, up from 1400. Yes, we'd get tax breaks but i figured that would only be a few thousand/year, we probably wouldn't break even.

4. The roof fix is supposedly to correct leaking which destroys the wall plaster. The roof and masonry pointing have been 'fixed' three times since we've moved there, and the walls are still crumbling. I'm concerned about lead paint and mold, especially with a baby in the apt.

The main attractions to buying now would be :

1. Take advantage of low interest rates
2. Avoid the hassle/stress of getting booted when our current lease is up (I believe that's in April)

The huge advantage of buying a place you have rented for a while is you do not get surprised by nighmares like this. So why would you even consider buying when you have good reason to believe you will have an ongoing nightmare?

I'd say not buy. If you do buy, buy elsewhere. If that $900/mo maintenance goes on for a year that's $10,800. That is a lot of unforeseen issues with a different place. I would consider this a couple month notice that it might be nice to move. You might however want to get that kid decision figured out before picking a place if you opt to buy rather than move to another rental.

Buy, but not that place?

My wife and I decided to buy a place because we could buy a 2,000 sq. ft. house in the exact area we wanted for about $1400 a month. A house a few doors down, not quite as nice but similar, is $1700 a month to RENT.

We have money set aside for maintenance if needed, but we bought a place that needed nothing--not even painting--before we moved in.

The downside...well, we went from paying $900 a month for rent to $1400 for a mortgage, but we have a house 3.5x as big and in a much nicer area than where we were renting.

so far I am pretty much in line with all of your thinking.

My co-worker has three young kids, they are renting but looking at a (short sale) 4BR three-story house in nice shape, and it is listed at $299K. Our place is a 1000 SF 1 BR, offered at $239K. Difference between the two is the taxes ($9K/yr for the house) and the afore-mentioned $10,800/ yr maintenance fees for the co-op apt.

That doesn't seem to add up to me; the house seems the clear winner.

The worst part is, my wife and I just came up with a plan to knuckle down and blow out our debt together (we each owe roughly the same, and figured we could do it in six-nine months). We had wanted to hopefully do that before buying a home or starting a family, trying to git 'er done in time to take advantage of low mortgage interest rates.

Now we may get derailed...I hope to get a better idea from the landlord whether he intends to sell once our lease is up. My guess is if he is asking us to buy, he does; but what do i know?

I'd say not buy. If you do buy, buy elsewhere. If that $900/mo maintenance goes on for a year that's $10,800. That is a lot of unforeseen issues with a different place. I would consider this a couple month notice that it might be nice to move. You might however want to get that kid decision figured out before picking a place if you opt to buy rather than move to another rental.

I would say buy but elsewhere. $900 a month in maintenance is criminal.

well, looks like the last lease we signed was up in August (my wife is home and just checked the files).

The landlord is often lax about sending the lease, even late sending our rent bill sometimes. The only time we were ever late on our rent in 11 years was because they forgot to send us a bill.

Now I'm stressing...

$900 a month in maintenance is criminal.

To be fair, this is NYC; Overpriced comes with the territory. But for that much in monthly fees, we should be getting a much nicer building. We have no doorman, an iffy intercom system, plus the roof leak issues.

I'm not a big fan of co-ops although I lived in Co-op City. Holding title for a co-op is much different than title for a condo or single family. A co-op would not appreciate in value as much as a condo or single family.

Being a real estate agent I love to see people buy but you may want to look somewhere else.

I wouldn't buy it. It's a co op. Trying to resell will be harder vs trying to resell a house without the ties.

As for you being worried about your lease being up, I wouldn't worry quite yet. Him allowing you to stay past the lease, it's now a month to month thing. Depending upon your laws, he still needs to give you notice before he asks you to leave, and don't forget you probably put a "last months rent" deposit as well as the time it takes for it to close. Granted, he may need to do a few things to pass inspection but that can be discussed as the issue arises.

Another alternative is that if you really want to stay there for a while longer, he can make it a contingency (if the new owners aren't moving into it) to let you stay for a few months longer, with a move out time agreed upon. The new owners might even let you stay there as renters if the place is for investment purposes only.

Now we may get derailed...I hope to get a better idea from the landlord whether he intends to sell once our lease is up. My guess is if he is asking us to buy, he does; but what do i know?

I would hazard a guess that he wants out before kicking in for the latest roof repair.

We haven't lived in a house <100 yrs old since we've had kids, lead can be managed. We get home test kits for questionable objects, and we had a blood test on the kids at around age 1 to see if they were finding lead that we hadn't identified (they hadn't).

I wouldn't buy it. It's a co op. Trying to resell will be harder vs trying to resell a house without the ties.

As for you being worried about your lease being up, I wouldn't worry quite yet. Him allowing you to stay past the lease, it's now a month to month thing. Depending upon your laws, he still needs to give you notice before he asks you to leave, and don't forget you probably put a "last months rent" deposit as well as the time it takes for it to close. Granted, he may need to do a few things to pass inspection but that can be discussed as the issue arises.

Another alternative is that if you really want to stay there for a while longer, he can make it a contingency (if the new owners aren't moving into it) to let you stay for a few months longer, with a move out time agreed upon. The new owners might even let you stay there as renters if the place is for investment purposes only.

I appreciate this info, Siu; I know renters have rights, but I've never been through this before (having a rental sold out from under me - assuming that it is gonna happen), so I am a little nervous. Still I can't see being 'forced' into making a bad decision (bad for us) and buying it due to that.

I would hazard a guess that he wants out before kicking in for the latest roof repair.

That was my thought too - he had a couple of other units in the building and offered us those as well. Fwiw, the maintenance fees are already high; they're going up 7%, about $100 - to the $900 in Feb.

He's probably still making out though. we're paying $1400/mo. He'd be paying $900/mo in maintenance but I can't imagine his mortgage (if he even still has one) is more than $300/mo. I do realize even the 7% increase eats into his profits, especially with more than one rental unit.

Does it have room for both your awesomeness and your jetskis? If so, buy it.

knuckle down and blow out our debt together. We had wanted to hopefully do that before buying a home or starting a family, trying to git 'er done in time to take advantage of low mortgage interest rates.
This sounds like step one. Leaky roof? ugh.

and the walls are still crumbling.

Inside, outside or both? I'd be a little concerned if it's a Brownstone.

Is a co-op the same as a condominium?

The fact that he is asking you means you are in a position of power. Don't buy it if you don't REALLY want to live there for at least 5 years, and do not under any circumstances pay his asking price. In fact, if you weren't already wishing you could buy it, don't buy it.

What are your options when your lease expires? Are other apartments to rent fairly easy to come by? According to Seinfeld, you pretty much have to watch for deceased people being removed out of their apartments to know there's a vacancy.

Personally I wouldn't invest in any property where the maintenance of the building structure is left up to others. I'd rather own a single occupancy dwelling. Not sure if that's an option for you in NY. I have a feeling the prices are out of the reach for most people.

Don't buy it.

Don't know how much cash reserves you have, or what type of work you do, but $300k will get either acres of land with a modest house or a good sized lot with more room than what you have now. Examples of the area/builder (http://www.rauschcolemanhomes.com/divisions/default.aspx?divid=Tulsa) that built mine (lost in foreclosure :().

If you're serious about starting a family, then you need to figure out pronto if where you are living now is viable for the offspring. Not just the living space, but the environment they'd be raised in, the schools they'd be attending. If you think that you'll outgrow your space within 5 years, then you'd be better off moving before the little one(s) arrive*.

*My wife's last child (our 2nd, her 5th) started out as twins. The other embryo was re-absorbed. But I mention that because at the time, we already had a minivan that would accommodate all of the family + the expected one. Ultrasound came back with twins, and suddenly we didn't have enough room for everybody.

$300k will get either acres of land with a modest house or a good sized lot with more room than what you have now.

Perhaps in NE OK... but in NYC, $300K will buy you... not very much by comparison. In fact, he said they'll be selling his 1000 sq ft unit for $239K.

Does it have room for both your awesomeness and your jetskis? If so, buy it.

Donald Trump couldn't afford a place that big.

This sounds like step one. Leaky roof? ugh.


Inside, outside or both? I'd be a little concerned if it's a Brownstone.

Basically the interior walls and ceiling around the windows have moderate to severe moisture and flaking paint/cracking plaster. It gets worse in the rainy seasons. At its worst, there is water dripping near the windows during a storm, and we can definitely smell mold in the warmer months.

They've done the pointing two or three times since we moved here; at one point the plaster was so bad in our living room they had to take it down to the exterior wall and build it back up. At some point they realized that

A. the bozos they hired on the cheap to do the pointing had done a lousy job, and

B. the real source of drainage problems was with the roof. Hence the current work being down, which required a raise in maintenance fees and dipping into the co-op's funds. The current work crews seem much more professional, but who knows whether it will work this time? Originally we only had problems in the LR but now our bedroom window is falling apart...not pleasant to think about breathing that crud in while you sleep.

The fact that he is asking you means you are in a position of power. Don't buy it if you don't REALLY want to live there for at least 5 years, and do not under any circumstances pay his asking price. In fact, if you weren't already wishing you could buy it, don't buy it.

We basically moved here 11 years ago, thinking we would be here less than 5 years. We weren't thinking about kids then, but we did think we'd have left NYC by now. We love the city for many reasons, but it's just really expensive to live here, and as I get older I am getting tired of the stress from too many people in my face 24/7 and dealing with cold temps and snow every winter.

We DO wish we had had the option to buy back in 1999, when these units were selling for about $60K. But I doubt we'd have wanted to stay at that point either...ironic, since we're lazy and wound up staying 11 years anyway. Basically for 1000 SF, we started out at $900/mo rent, which is pretty darn cheap around these parts.

...4. The roof fix is supposedly to correct leaking which destroys the wall plaster. The roof and masonry pointing have been 'fixed' three times since we've moved there, and the walls are still crumbling. I'm concerned about lead paint and mold, especially with a baby in the apt.


I would get it tested if you were seriously thinking about buying it. Lead poisoning is not a joke. My son got it as a toddler in an apartment we were living in and it became a huge nightmare.

http://www.leadpro.com

What are your options when your lease expires? Are other apartments to rent fairly easy to come by? According to Seinfeld, you pretty much have to watch for deceased people being removed out of their apartments to know there's a vacancy.

Personally I wouldn't invest in any property where the maintenance of the building structure is left up to others. I'd rather own a single occupancy dwelling. Not sure if that's an option for you in NY. I have a feeling the prices are out of the reach for most people.

I'm with you. It would be pricey to buy a home in the city but just outside (within commuting distance) it gets more resonable, especially on a short sale or forclosure. We wouldn't mind moving somewhere quieter and warmer, but that would involve finding new jobs. Doable, just more challenging.

The Co-op has had many frictional decisions made regarding chopping down trees, etc. and you basically are at the mercy of majority rule. We like our building and apt. okay, but most of our neighbors gripe and whine about the slow or non-existent services from the super, co-op board, etc. We have been fairly content, but if we suddenly were paying $900/mo for maintenance I am pretty sure I would start getting more picky too.

There are apts for rent here. No cheap deals to be had, but there are vacancies. We'd probably have a tough time finding something this big for $1400/mo to rent, but there other apts in our neighborhood, same size, with new kitchens and baths listed for sale for about the same money ($225-250K), which have sat unsold for months. So, fwtw...

I would get it tested if you were seriously thinking about buying it. Lead poisoning is not a joke. My son got it as a toddler in an apartment we were living in and it became a huge nightmare.

http://www.leadpro.com

absolutely - as HardyW mentioned, the lead paint and other issues can be resolved, but until I got things tested and addressed as needed, I would have serious worries about raising an infant in our building.

Possible lead and confirmed mold? Start packing.

You have to look at the "historical"value of that dump first:thumb::lol:

well, I was chatting with our landlord the other day and he asked again about us buying it, and said while it's not gonna happen tomorrow, he does wanna sell our place soon. So that's a hint for us to poo or get off the pot. I was getting all antsy about maybe doing what we can to get a major loan but re-reading this thread has brought me back down to earth a bit.

Since I last started this thread:

1. We've decided to actually do that baby thing.
2. Work on the roof and bricks took forever but is finally done. But the interior walls are still a mess and will need major rebuilding.
3. My wife and I blew most of our joint cash savings - much of it on emergency vet bills. (Damn those tribble kittens and their pesky attachment superpowers!)...while not replenishing that cushion, due to sending lots of money to credit cards and school loans...so, the $50k down payment would either be a 'wipe out the retirement funds' deal, or try to get a grandfathered loan for the entire mortgage and down payment (if we can even do that, since we've been here 11 years and our landlord is the Co-Op sponsor).
4. Oh, yeah, plus the economy is sucking even more now. Again.

I think - with a baby on the way, lead paint and mold plus a 1 BR - would mean we'd be looking to move in three years...our building has a 5-year wait for new buyers to sub-let, and I doubt the market will have rebounded sufficiently in three years so we could sell and make out ok with so little equity. That's if we can sell - our neighbors have been trying to sell their place and it's slow going unless they wanted to lose big money...that's pretty unheard of in these parts but I am guessing they overpaid at the peak.

I would absolutely wanna talk him down if we even considered buying it...I think in its present shape - NY or not - $200k even is more than fair. My wife and neighbors think we might be able to bargain down to $220K, but no way for $200.

Please feel free to tell me once more to run like hell.

and yes, I realize we just put that A/C in...why do you think I am even considering this?

Offer him $24 cash money, a BeDazzled Jet Ski and a mint julep.

...that is the question.

My wife and I have lived in a rented apt. for 11 years. The landlord just asked last month if we would like to buy it. The place is decent-sized for two people, in a pretty good neighborhood (not posh, but safe, and convenient transit). here are some issues:

1. It's a co-op and that means we'd need to put down 20% min. That would clean out our cash reserves and maybe dip into retirement funds.

2. at 1000 sq ft, with lots of closets, it's great for a couple, but we are strongly considering having a child, in which case we would need to sell in a few years. Or, if we made it to five years, we could sub-let.

3. His pitch mentioned our mortgage with taxes would be less than what we pay now for rent (about $1200 vs. 1400). Unfortunately we'd also pay maintenance fees, which are being raised so the building's roof can be fixed (work going on now). That's another $900/mo. So we'd actually be paying more like $2100/mo, up from 1400. Yes, we'd get tax breaks but i figured that would only be a few thousand/year, we probably wouldn't break even.

4. The roof fix is supposedly to correct leaking which destroys the wall plaster. The roof and masonry pointing have been 'fixed' three times since we've moved there, and the walls are still crumbling. I'm concerned about lead paint and mold, especially with a baby in the apt.

The main attractions to buying now would be :

1. Take advantage of low interest rates
2. Avoid the hassle/stress of getting booted when our current lease is up (I believe that's in April)

That crumbling(historical wink,wink) joint will eventually have a maintainence fee of $700 a month(which you don't have).Why do you think the landlord wants to unload it?
Problem is we here in Foo have already tied up a lot of time and money fixing up that shack for you.

start commuting from Jersey. Condo fees are a biatch (and not tax deductable)

... - with a baby on the way, ...



Hey. Congratulations, man!

if you have debt AND retirement funds, you need to spend a little time researching cash management. Your case might be different, but debt generally costs more than the return you get on retirement funds. So, where do you end up?

start commuting from Jersey. Condo fees are a biatch (and not tax deductable)

It's a Co-Op but point well taken...we keep getting people telling us to go buy a house somewhere just outside the city for the same money or not much more.


Hey. Congratulations, man!
well, not just yet but I thank You in advance...first, I have to tear her away from the air conditioner...

if you have debt AND retirement funds, you need to spend a little time researching cash management. Your case might be different, but debt generally costs more than the return you get on retirement funds. So, where do you end up?

Correct - except I have a 0% rate on my card, and my wife has enough savings to pay off her school loan now (we owe maybe 11-12K between the the two of us), so on the advice of a financial planner I stopped sending $1000/month to my VISA bill. Not sure If regret that or not, but with the market as depressed as it is I am hesitant to stop contributing just now. I am instead putting a set amount into a savings account with so-so interest towards paying it off in '12 and meanwhile it's an extra emergency fund.

It sounds like the wrong property and the wrong time to me. You'll need 20% down to avoid PMI, buying only makes sense if you are planning on staying 5+ years, and the housing market is not going to recover for 5+ years.

You will want a separate bedroom away from the baby. When they are infants it's not bad to have them sleep in your room so they are accessible for feedings and changings every couple of hours, but when they get to be toddlers you will want some privacy.

You will want a separate bedroom away from the baby. When they are infants it's not bad to have them sleep in your room so they are accessible for feedings and changings every couple of hours, but when they get to be toddlers you will want some privacy.

exactly why we figured two years or so at most once the baby is born. Our place is large enough where we could conceivably throw up a temporary wall to make a small bedroom, but it would get awfully cramped after a while.

I would advise you NOT to buy - start looking in the burbs for a home you can afford

I would advise you NOT to buy - start looking in the burbs for a home you can afford

With the economy in the dumpster, you might be able to get a good deal on a foreclosure or property that's been on the market a while.

yep /\ that's the conventional wisdom. I hate to take advantage of someone else's misfortune, but we had our share of that as well...I think that's the route we're gonna go. I have my eye on a few towns in upstate NY, and not ruling out NJ or CT either.

Since I last started this thread:

1. We've decided to actually do that baby thing.


Awesome! Very excited for you both. :thumb:

With the economy in the dumpster, you might be able to get a good deal on a foreclosure or property that's been on the market a while.

maybe ya'all can find a foreclosed infant as well. Good Luck.

Awesome! Very excited for you both. :thumb:

Thanks! It's scary, but yes, also very exciting!


maybe ya'all can find a foreclosed infant as well. Good Luck.

Thanks. I'm also in the market for any baby-sized fringed suede vests we can find. Beads would be nice, but I'm mostly interested in anything made with real sinew, for leongevity's sake.

Imeant longevity

I meant mint.




























No, really; I truly did.