Question about lease holds

[Sean Putney]

Hello all, I'm new to Bigger Pockets and to real estate investing at all for that matter. However, I have been looking at a potential property but I am confused by one thing. I'm hoping someone here may give me help me better understand. This given property is for sale for $69,000 leasehold co-op with fee available for almost $299,000. $625 monthly interest on fee conversion loan ends with fee purchase. Where my confusions lie are where it says this is a leasehold co-op with fee available for almost $299,000. Can anyone please explain to me what this is trying to say? Thank you.

[Daniel Chang]

I don't deal much with residential co-ops.  However, I believe this is what it means:

That property likely has a number of units.  If you buy it fee for $299K, you own the entire building.  You can also buy into the co-op for $69K and have leasehold interest to use one of the units.  If you do this, you will need to pay $625/mo.   Think about it like you are either buying a car for $30k (fee), or your lease the same car for $5000 down and $200/mo.  Same idea.

Essentially, "fee" means you own the building and land.  "leasehold" means you have rights to utilize the space, but at the end of the terms, the space reverts back to whoever holds fee simple title.  

In general, stay away from buying leasehold interests.