Investment property -- sell at a loss? WWYD?

[OzzieandHarriet]

We own a studio apartment in Manhattan, bought it for cash* 8 years ago, have been renting it out since then. The idea was that we would eventually take it over and use it when we went up there, and as sort of a test to see if we would like living there.

The co-op changed the sublet rules and we will need to have the tenant out by the end of the year. This is where we would have done our takeover. But ... I just quit my job, and though my husband has a good job and we are fine with our money, having that expense every month (~$800 maintenance, includes taxes) makes me nervous, especially for something we are not sure we'll use that much.

So it's on the market now with a good agent. She cleaned it up and it looks beautiful (tenant is cooperating -- we are on good terms). We have had one very lowball offer. We already priced it at $20k less than we paid (it's at the bottom end of the price spectrum, so that's a fairly significant chunk), and the offer was about $50k less than our asking price. We negotiated a bit but the buyer decided against it. And this got me thinking: if we have to sell it at THAT much of a loss, we might as well keep it for a while. I know, at this point we would be throwing additional money at it to keep it, but OTOH, we don't need the cash we would derive from selling it, either. IOW, we are not desperate. We might as well get some enjoyment out of it if we're going to lose money anyway. And maybe the market will improve (though who knows). It's not a fancy place but it's in a fantastic location.

Thoughts?

*Cash b/c sold another property, the house I bought before I met my husband. Reinvested in this place and deferred capital gains tax.

[OzzieandHarriet]

Hmmm ... crickets ... can no one here relate?

[oldladystache]

When you're thinking about selling a property you should forget what you paid for it. That's past and no longer relevant. Think about starting from where you are now, not where you were or where you hoped you'd be.

I wouldn't keep it hoping it would go up. I might keep it if I enjoyed it enough, but I probably wouldn't.

[Daleth]

If I had a fully paid off property in Manhattan, these days, the apartment would have to actually be inside a working garbage truck before I would consider selling it. You bought close to the top of the market but the market is coming back up. If you're looking at losing $50k, think about it: how long would you have to pay $800/mo (plus insurance, or is that included?) before you will have lost $50k?

And how often do you go to Manhattan? That $800/mo is equal to 3-4 nights in most Manhattan hotels. So factor that in--the fact you'd have to pay to stay in Manhattan after you sold it. Even if you only spend ten nights a YEAR in Manhattan, that's still at least $2000 (for a not-excellent hotel, without a kitchenette). So holding the apartment doesn't cost you ($800 x12 =) $9600 a year, it costs you $7600 a year ($9600 minus the $2000 you save by not having to go to a hotel). That's only $630/month. And if you spend more than ten nights a year in Manhattan, it costs you even less.

It would take you a LONG time for that to add up to $50k.

And, have you talked to a lawyer to clarify what your rights are now with the new coop rules? For instance, if you can't have tenants, can you let friends stay there for short visits? What if those friends, unbeknownst to your co-op, pay you a little something for the privilege?

[OzzieandHarriet]

Daleth, that's the conclusion I came to also.

Just got a note from the agent, after today's open house, suggesting we lower the price another $10k. I don't see that that will make much difference. My guess is that our best offer will be somewhere around what that first one was.

I suppose if we keep it and find later on that we NEED to sell we can just offer it at a bargain basement price -- but hate to let it for that price now.

[Snowboard junkie]

If you can do the short term rental thing for awhile to cover costs until property values bounce back, that would be ideal.  You should consider major transactions like this very carefully and if unsure it's probably best to maintain status quo.

Just out of curiosity, when you sold your place earlier and transferred the cash to this property, how much profit did you have on the books.  Because in my mind your initial investment is not the amount you paid for the manhattan condo, but rather what you paid for the prior property.

[Daleth]

Daleth, that's the conclusion I came to also.

Just got a note from the agent, after today's open house, suggesting we lower the price another $10k. I don't see that that will make much difference. My guess is that our best offer will be somewhere around what that first one was.

I suppose if we keep it and find later on that we NEED to sell we can just offer it at a bargain basement price -- but hate to let it for that price now.

That makes sense to me. Hold off on selling it at fire-sale prices until you actually need to have a fire sale. And I don't know much at all about NYC coop law, but I'd still recommend seeing a lawyer who does--having him or her review the rules, etc.--to see if there's any way you can make money out of it. For instance, can you let a family member live there, but not a non-relative?

[KingCoin]

This strikes me as an obvious sell. Whether you paid 50k more or 5 million more than the current price is wholly irrelevant. Considering it beyond tax implications is falling pray to psychological factors rather than good money sense. Read up on the concept of "sunk costs".

Some additional thoughts:

1) I'm not sure what this place costs, but a decently located studio in Manhattan usually runs ~$350k. With that $350,000 you could purchase property elsewhere in the country that would pay you $3,500/mo; call it $2,000/mo after expenses. So this studio isn't costing you $800/mo it's costing you $2,800/mo or $33,600/yr. That's a financial calamity.

2) Manhattan real estate is red hot right now, so it's not like you're thinking about selling in buyers market where no one has access to financing and investment bankers are throwing themselves out of windows. You should consider the current market "good" or at least "fair". The market has already turned around. If you paid 50k more, well, it was a bad investment. We've all made them. Time to cut ties and do the smart thing for your money.

3) Do you have any capital gains in your portfolio that you can offset against the capital loss in your property? That could reduce the sting a bit.

I agree that there's no reason to fire-sale the place. Get a fair bid, sell the property, and start making money with your money rather than having your money cost you money.

[msilenus]

I don't normally like speculative plays, ie: holding onto the apartment just because NYC is hot.  (The question is: will it be hot next year?)  But I would also try really hard to avoid selling a property in Fall or Winter.  RE is a seasonal market.  I would especially avoid trying to sell a place that is locked up by a tenant for the next three months.  You're telling the chunk of the market that needs an earlier move-in date to get bent.  Honestly, to me that screams  "I'm desperate to close on 1/1.  Please low-ball me."

Of course: putting the place on the market, then taking it off, then putting it on a few months later also seems weak... but it still seems better than trying to sell in the Fall and close in the dead of Winter.  When demand is higher, bidders should be more focused on each other's moves than on your past ones.

Are you sure your agent is any good?  I'm not an agent, or even very experienced with RE.  It's just that everything I know about RE makes me think your listing is being marketed very poorly.  Curious if more experienced folks agree.

[Daleth]

I don't normally like speculative plays, ie: holding onto the apartment just because NYC is hot.  (The question is: will it be hot next year?)  But I would also try really hard to avoid selling a property in Fall or Winter.  RE is a seasonal market.  I would especially avoid trying to sell a place that is locked up by a tenant for the next three months.  You're telling the chunk of the market that needs an earlier move-in date to get bent.  Honestly, to me that screams  "I'm desperate to close on 1/1.  Please low-ball me."

Of course: putting the place on the market, then taking it off, then putting it on a few months later also seems weak... but it still seems better than trying to sell in the Fall and close in the dead of Winter.  When demand is higher, bidders should be more focused on each other's moves than on your past ones.

Are you sure your agent is any good?  I'm not an agent, or even very experienced with RE.  It's just that everything I know about RE makes me think your listing is being marketed very poorly.  Curious if more experienced folks agree.

Yes, those are all excellent points. Take it off the market now, wait six months and (1) you're probably out of your contract with that realtor AND (2) it's spring, primo real estate time. And the place is rented through December, if I understand correctly, so waiting until spring doesn't even cost all that much. Find a better realtor (interview a few) in February or March and see what they think it should be listed at. If it's still fire-sale prices, then revisit the question that started this thread. If not...? Cool!

[OzzieandHarriet]

Thank you for the replies.

My understanding of NYC co-ops is that they can change the rules any time they feel like it. I think spending money on a lawyer to ascertain that would be a waste.

The profit from the previous property was quite a bit -- sold it at almost triple what I paid for it originally. So yeah, it's not money that I actually earned by the sweat of my brow or anything, and the initial investment was fairly low.

The sunk cost thing -- yeah, I normally would agree about that. We didn't really go into this thinking we would make a profit on it when we sold it; we were planning on keeping it for a long time. The impetus for selling now is mostly out of caution in light of our reduced income -- although we have been saving my entire salary for some years now. But we put so much work into buying it, something bothers me about selling it at such a low price.

I'm not interested in buying a house somewhere cheaper -- way too much trouble being an absentee landlord even when the place is a couple of miles away, let alone someplace I wouldn't want to live or even visit. Just not for me (even less so for my husband).

What we're thinking now is that we'll keep it on the market at the current price until the end of the year, until the tenant moves out. If no one buys it at somewhere near that, we'll take it off the market and use it for a while ourselves; if we decide it's not something we really need or want to keep, we'll market it again, but maybe at a better time of year.

This is presuming that the GOP doesn't put the entire economy in the toilet between now and then, but if so, we'd all be in trouble anyway.

[msilenus]

If you were a prospective buyer looking at a 2-month old listing in late November, would you offer asking price?

[jawisco]

I don't know how anybody can give you advice without real numbers.

How much are you asking for the property?

How much are your total yearly carrying costs for this property (coop, taxes, maintenance, utilities, etc)?

How much will you use the property this coming year?

What are your financial goals?

I follow NYC real estate and have an idea what is going on there.  NOBODY knows what will happen to real estate prices going forward.

[impaire]

I don't know how anybody can give you advice without real numbers.

Agree, and... location? You may not be comfortable sharing this but it would definitely impact MY decision in your shoes...

[OzzieandHarriet]

RE age of listing: I don't think 2 months is that old; when I checked Streeteasy just now, I saw lots of places that were listed at the same price for months and eventually sold without the price being lowered, or if it was lowered, it was done later in the listing term. I signed a 6-month contract with this agent, so it will expire in January 2014.

Real numbers:

Asking: 295k (paid 315k)

Total maintenance: ~$9500 for the year (includes everything except electricity), insurance ~$250.

How much will we use the property? Don't know -- maybe a couple of days a month, unless there was something special going on.  If we had it available, we'd probably plan more trips there (cost to take the bus: $25-$60 round trip, depending on whether it's Greyhound or another service).

Financial goals: I guess this is the real issue. We didn't buy this place to make money, so it's already exceeded our expectations in that we've rented it out continuously for 8 years and made a small profit. If we sell it, we would invest whatever proceeds we get in a Vanguard fund. We don't have any debts other than our mortgage, which is so low-interest it wouldn't make sense to pay it off. There's nothing in particular we need to buy that we can't afford with our current income and savings. It would just be a bit more of a cushion.

(Location: let's say UES, well below 96th Street.)

[KingCoin]

My understanding of NYC co-ops is that they can change the rules any time they feel like it. I think spending money on a lawyer to ascertain that would be a waste.

Yes. Likely a waste of money. You may be able to petition the board for a 6mo exemption to the new rule. Explain that you rely on the property for income, that your financial circumstances have been cramped, and that you don't want to have to fire-sale the property. Co-op boards like to avoid low sale prices because it reflects badly on the whole building, so they may show mercy for both your sake and theirs.

The sunk cost thing -- yeah, I normally would agree about that. We didn't really go into this thinking we would make a profit on it when we sold it; we were planning on keeping it for a long time. The impetus for selling now is mostly out of caution in light of our reduced income -- although we have been saving my entire salary for some years now. But we put so much work into buying it, something bothers me about selling it at such a low price.

That "something" is locking in a loss. It sucks, but it's the right thing to do. Holding onto this property is equivalent to waking up every morning and burning a $100 bill.

I'm not interested in buying a house somewhere cheaper -- way too much trouble being an absentee landlord even when the place is a couple of miles away, let alone someplace I wouldn't want to live or even visit. Just not for me (even less so for my husband).

This can be done through a turn-key and property management company so you literally have to do nothing except receive checks to your bank account. In any event, you can replace "other properties investments" with stocks or other passive investment vehicles and the argument is the same.

I don't know how anybody can give you advice without real numbers.

How much are you asking for the property?

How much are your total yearly carrying costs for this property (coop, taxes, maintenance, utilities, etc)?

How much will you use the property this coming year?

What are your financial goals?

I thought about asking as well, but then realized it doesn't matter. NYC has the worst buy vs rent ratio in the country. Even if you live in the property full time, owning is dubious. If you only use it part time, you categorically shouldn't own unless you have a crystal ball and know prices will rise at a near double digit pace.

Agree, and... location? You may not be comfortable sharing this but it would definitely impact MY decision in your shoes...

Again, it doesn't matter. A place like Harlem will have much higher market beta than somewhere like the Upper West Side, but unless you know which way the market is going, it's largely irreverent.  Owning a high cost, vacant property will be a loser in every neighborhood.

I think it's clear that you need to sell the place, it's just a question of how to time it to realize top dollar on the sale, while minimizing the sum of loss on your $800/mo carry cost.

[Another Reader]

The income tax consequences of a sale could be a significant issue.  Yes, the OP lost money on the coop, but they tripled their purchase price on the property they sold to buy this one.  If they did a 1031 exchange, they probably have a substantial taxable capital gain if they sell, even if they lose money on this property.  For example, if they bought the original property for $100k and it tripled in value, they probably have a $175k gain rolled into this property.  Even if the loss and selling expenses add up to $50k, they are looking at a large capital gain tax bill. 

[tryan]

I'ld keep renting ... any questions from the ASSociation - tell them you're grandfathered to the prior rules.

Or have the tenant tell them your family (i.e. cousins).

No reason for a lawyer.  It'll be years before someone attempts to enforce a toothless rule.  No reason for this to cost you anything.

[KingCoin]

I'ld keep renting ... any questions from the ASSociation - tell them you're grandfathered to the prior rules.

Or have the tenant tell them your family (i.e. cousins).

No reason for a lawyer.  It'll be years before someone attempts to enforce a toothless rule.  No reason for this to cost you anything.

This is a possibility, but you I'm guessing OP had the current tenant apply through the board as required by their proprietary lease. That is to say, the board already knows the score. I'd get a very good idea of the maximum enforceable penalty before giving the board the bird. It's generally better to try to reach an amicable solution than running afoul of a bunch of crotchety Upper East Side NIMBY's who have nothing better to do than make your life miserable. Maybe you get a nod-nod-wink-wink with the "cousin" argument, but I'm guessing the board is changing the rule for a reason.
http://www.stroock.com/SiteFiles/Pub268.pdf

[Sweet Betsy]

Has your original plan regarding the apartment changed?  Do you still want to try out  living in NYC in the future?  If that is the case and with the high transaction costs associated with buying and selling real estate, I'd recommend holding onto the apartment until and unless you decide that NYC living isn't for you. 

Also, depending on your plans now that you are unemployed you may be able to use the apartment quite a bit even if your husband isn't as available. 

[tryan]

What ever "enforcement" the association has (little/none IMO) fighting it won't cost 50k.  Continuing to rent is a no-brainer business decision.

FWIW the association at my lake front property spent 30k fighting with an owner in an attempt to keep him from subdividing his property.  The association lost since local/state/federal laws trump them.  No surprise, the defendant stopped paying his dues (6 years n'counting).

No group can limit your god-given rights .... it's a paper tiger ... ignore it.

[Another Reader]

Coop boards, especially in New York, are an entirely different animal.  With a coop, you do not have title to the unit.  You own a share in the corporation that owns the property.  You have the right to occupy the unit usually by paying some kind of rent and fees.  You cannot sell the stock to anyone the coop board does not approve.  You cannot sub-lease your unit without Board approval.

Coops, particularly coops with difficult boards, sell for significantly less than condos.  You are getting much less than the full bundle of rights, and your rights are largely controlled by the board.  It's a way to "get in" to Manhattan real estate, but it's not for everyone.

[OzzieandHarriet]

I thought I replied earlier -- isn't showing up.

There's no way I'm taking on a NYC co-op board. It is NOT the same as a condo association. This particular board is really pretty reasonable -- it's not one of those upper crust UES buildings -- definitely more middle of the road. I think they had to change the sublet rule when they refinanced the mortgage or renewed their insurance or something along those lines.

Sweet Betsy: Plans changed? Well, kind of. I think I've been influenced by MMM! The apartment, and being in NYC in general, started seeming like an extravagance, especially with quitting my job (which I had to do, for my mental health). But as you say, I may have more time to go up there now. And those transaction costs, in addition to locking in our losses, are something to think about.

[tryan]

I hear ya on the coop thing  ... just makes my blood boil that a committee can force an owner to take a loss.  Imagine owning more than one unit in this place.  I'ld be looking into how many people are affected (owners who rent) then bond together and get this "rule" flipped back. 

All you do is say "If we all can't rent, we all can't pay".

[impaire]

Agree, and... location? You may not be comfortable sharing this but it would definitely impact MY decision in your shoes...

Again, it doesn't matter. A place like Harlem will have much higher market beta than somewhere like the Upper West Side, but unless you know which way the market is going, it's largely irreverent.  Owning a high cost, vacant property will be a loser in every neighborhood.

I think it's clear that you need to sell the place, it's just a question of how to time it to realize top dollar on the sale, while minimizing the sum of loss on your $800/mo carry cost.

Yes, I agree with almost everything you say. "Unless you know where the market is going" is a big "unless," though--I don't have a crystal ball, but "not knowing with 100% certainty" and "not having a clue" is a bit different. There are probabilities and shades of grey to consider in this type of decision--the border between sunk-cost and sunk-cost fallacy can sometimes be uncertain, and there will be uncertainties also when picking a new investment.

[luke]

What are your monthly P&I payments in relation to rent/potential rent?  If it's close, why not create a note and owner finance it?  5-10% down, 4-6% interest.  Keep a good chunk of the down payment in case you have to foreclose.  After the note has been seasoned for a few years, broker the note to an investor.  That way you solve a problem and create an asset.

[OzzieandHarriet]

Can't rent it out anymore, period. The options are keep or sell. We don't have a buyer, so owner financing, though a possibility, is a moot point -- but a buyer would have to put down 20% in any case.

I told the agent we want to keep it on the market at the same price until December, and that we would not rule out any offer. If it hasn't sold by then, we will take it off for a few months or a year and use it ourselves in that time. It might be easier to sell if there's no tenant there and it's a better time of year, or we might decide we like having it available and just keep it.

I offered it to the tenant initially, btw, and she decided she didn't want to buy it.

[KingCoin]

I told the agent we want to keep it on the market at the same price until December, and that we would not rule out any offer. If it hasn't sold by then, we will take it off for a few months or a year and use it ourselves in that time. It might be easier to sell if there's no tenant there and it's a better time of year, or we might decide we like having it available and just keep it.

This seems like the right answer.

[MKinVA]

Harriet, I think the one thing you should do is talk to an accountant to find out what your tax exposure will be. It may be that the best financial decision is to loose as much on this property as possible. This is really the only way to judge if in your specific situation the price is right. It sounds to me like you don't want to get rid of it. Follow your heart. If you want to follow your plan of deciding a little down the road what your wants and needs are, do that. Take your time. Only you guys can decide what is the best way to invest in your future. I say, lucky you!!

Also, I don't think living in New York is antimustachian necessarily. You can walk, ride public transit to absolutely anything anyone would ever want to do. Best entertainment, broadest opportunities for side gigs, best healthcare facilities on the planet, lots of free events, I could go on and on. Can you tell i'm a native New Yorker? Well, I now live in a small southern city and pound for pound a nice condo is going to run you at least 350000. Anything less is a poorly built crappy apartment with no extras stuck in a suburb where there is nothing to do.

[OzzieandHarriet]

So things with this are f'ed up, somewhat: The co-op doesn't meet FNMA requirements,* so no one will be able to get a regular loan with a big bank to buy our place. From what I understand, this would not rule out a portfolio loan (i.e., a loan that will not get sold to FNMA). It seems to me that if someone belongs to a credit union or something like that they would be able to borrow the money, but our agent does not seem to think that is likely. She is hoping for a cash buyer.

DH and I are still on the fence about selling it at a big loss. OTOH, I wouldn't like to summarily cancel the contract with this agent after she's put so much work into the sale (having open houses every weekend, etc.). Could create bad PR all around.

As far as I know now, the tenant will be moving out by the end of December, and our sale contract ends in January. The cost to us if we don't sell will be both loss of rent plus having to pay the maintenance and utilities (just electricity). We would have lost the rental income in any case, but still, it will be a hit cf. what we've been used to. We will save about $200/month because we won't have to pay a sublet fee.

I suppose I could appeal to the board to extend the lease if our tenant hasn't already found another place, though I would suspect she has some sort of plan, being the organized person she is. But I have no idea if such an appeal would be useful.

The whole situation is a Catch-22 of sorts. Very hard to sell and very hard to buy.

*One of these being that one person or entity cannot own more than 10% of the units. In our co-op, the sponsor still owns about 30% of the units. (It's a small place.) Some of them are occupied by long-term tenants with stabilized rents, so that won't be changing anytime soon.

[Another Reader]

The "sponsor" is probably looking to buy your unit back as a short sale or foreclosure at a heavily discounted price.  They probably control the board as well.  If that's the case, they will do everything they can to force you to sell at a discount.  Nothing you do will be acceptable to them. 

[KingCoin]

The "sponsor" is probably looking to buy your unit back as a short sale or foreclosure at a heavily discounted price.  They probably control the board as well.  If that's the case, they will do everything they can to force you to sell at a discount.  Nothing you do will be acceptable to them. 

I actually doubt this. Co-op's are far more likely to reject a sale at a low price than encourage one (I've seen it happen). I suspect that the board doesn't have a few hundred grand sitting around and want to play a quick flip game, and even if it does, it's not in their mandate. A low sales price adversely affects that price of every other apartment in the building. While the new policy adversely affects subletters, the purpose is almost certainly to promote a stable building community, not to put current owners into a position of duress.

I suppose I could appeal to the board to extend the lease if our tenant hasn't already found another place, though I would suspect she has some sort of plan, being the organized person she is. But I have no idea if such an appeal would be useful.

Can't hurt to try. Just explain the financial strain that the new rules are causing. You can make it clear that you will continue to try to sell the apartment at a fair market price in the interim.

Is there a different set of rules for the sponsor who will continue to rent its apartments?  At the very least, it seems incredibly hypocritical to impose a set of rules on some owners and not the sponsor. Depending on how complicated this situation is, it might be worth spending a little on a lawyer to see if you can continue to rent without much fear of reprisal. Again, a studio apartment that's not a very attractive investment anyway probably isn't worth going to war over, but just laying down without even seriously investigating your options probably isn't a great idea either.

On the loan front, I'd do your own research to see who would be willing to lend against such a property. That way, you can deliver on a silver platter a couple options to a potential buyer who might otherwise retreat at the first sign of resistance (let's be real, studios are pretty cookie-cutter). Are you willing to seller finance? That would effectively replace your apartment investment with a mortgage note investment. Given the low yield of the apartment, it might not be a bad trade.

[Another Reader]

If the coop "sponsor" was gone from the project and there were no special rental rules for the "sponsor," I would agree.  This appears to be no different than a condo developer still in control of the HOA trying to collect all the sold condo units at a steep discount to convert them into rental units.  If the Board is a proxy for the "sponsor," then you may have a problem.

[OzzieandHarriet]

NYC has extremely strict laws protecting tenants. If an apartment is rent controlled or rent stabilized, the person pretty much has the place for life if they want to stay there, and at a lower than market rate. Our building, like many, went co-op in the 1980s, was previously rental; some long-term tenants who were in there before it went co-op are still in there. I don't know how many there are, but in a small building it doesn't have to be that many to exceed the 10% limit.

This is my understanding of the situation. I don't believe there's any nefarious reason for it -- just a confluence of the rental/tenant situation and the real estate bust. Because of low interest rates, there are a lot of buyers out there interested in this type of property, but because of the lending environment, most of them won't be able to buy it. People with lots of cash would probably go for a more luxurious type of place. We did get a really lowball cash offer after the first open house, but we decided to pass on it.

If we decide to take it off the market, do you think we owe anything to the real estate agent? I feel she's putting a lot of work into it (open houses every week, research, etc.). I know technically/legally we don't, but I believe in treating people as well as possible.

[Another Reader]

What happens when one of the rent controlled units owned by the sponsor goes vacant?  Are they allowed to re-rent at market rates?  Seems to me, if the conversion is 30 years old, some of those tenants should be aging out and in the next 5 to 10 years the building will be entirely different.  If no new rentals are allowed and the sponsor has to sell, things should get interesting.

[OzzieandHarriet]

No, I think if one of the rented units goes vacant they have to sell it. But I don't know all the ins and outs of this business -- why the sponsor still owns so many units, etc.

When we bought the place, they asked me if I wanted to be on the board but I declined because we don't live there. Maybe I should try to get more involved (if we end up keeping it).

[Another Reader]

You certainly need to understand the mechanics of the rent controlled units and the position of the sponsor to make a reasonable decision about selling.    For example, if all the rent controlled rentals were to go vacant over the next 5 to 10 years, would you experience a temporarily depressed market for these units until the building reached 90 percent owner-occupancy?  Would the units then jump in value?  Or does the sponsor have grandfathered rental rights?  How much of the coop board is controlled by the sponsor?  Does the sponsor have veto privileges on board decisions?  In your shoes I would read all of the governing documents and ask questions about anything that I didn't understand.

Condo's are generally worth a lot more than coops and you have more of the bundle of rights as a condo owner.  Can you convert to condos and would the other owners be willing to do that?

[OzzieandHarriet]

We have a buyer -- at $270k (agent and lawyer are sending paper around as I type this to get the deal moving). I know selling the place is probably the right thing to do, and that I will feel relieved when it's done, but I'm sad about it, too.

[arebelspy]

Congrats on the pending sale, bittersweet as it is.

Thanks for the update.

[KingCoin]

Congrats. Honestly, these co-op studios are dogs as investments. Taking a 14% loss sucks, but it was the right move.

[OzzieandHarriet]

Sigh. It's never that easy. The deal fell through. Not sure if we should take it off the market for a while now or what.

What I'm ticked about is that we are out $$ to the lawyer -- don't know yet how much. But $385/hour (for an associate).

[OzzieandHarriet]

We have another deal going; this one looks like it will go through. It's for $260k, but all cash. We got the offer on New Year's Eve! Talk about selling at a dead time.

It sorta stinks -- we could keep it for another year for the difference between this offer and the last. But we decided do go ahead with it anyway -- get it over with. Then we'll be free of this and can put the money to better use.

[marblejane]

Congrats! I think you're making the right decision, even if it feels painful right now. Fingers crossed for a successful closing.

[OzzieandHarriet]

Almost done -- the closing is scheduled in < 2 weeks. I feel like we did not get the best deal we could, but I could be wrong.

I just need to chalk this whole thing up to an expensive mistake and learning experience and move on, I guess. It could have been worse.

[Mister Fancypants]

If it makes you feel any better I know someone holding onto a co-op in an outer boro for sentimental value for over 4 years that has been vacant...

The unit was paid for in cash back in the 80's when it converted to co-ops from apartments, its value has quadrupled since purchase and the basis has stepped up once due to inheritance. The maintenance has not eroded away all of the gains yet, but in a few more years I am sure it will get there.

Fortunately the owner is a multi-millionaire and really has no need for the excess cash, but it still drives me crazy that when they list it they do so for an over the top price to not solicit any real interest.

-Mister FancyPants