NYC Co-op: Sell or Hold?

Buying & Selling Real Estate
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NYC Co-op: Sell or Hold?

Ericka G.
Investor · Atlanta, GA · Member since 2015 · 366 posts · 283 votes

I received an unsolicited offer to buy an apt that I own in upper manhattan (below 125th street). My unit wasn't on the market - a broker who lives in my bldg approached me with deal.  I change my mind daily on whether to sell or not.  Pls take a look at the numbers and let me know what you think.

My Purchase Price: $100k in 2005.  2bd/1ba,1000sqft unit, Doorman bldg across from park, short walk to to 2/3, Metro North, 4/5/6.  laundry, gated parking, courtyard. Former HDFC/HPD Bldg zoned for middle income built in late 90s. I love the apt and location.

Current mortgage balance: $52k.  Total monthly expenses: ~$1600 

Rent rev: $2500   (net: $900/mos)

Current offer: $400k, no inspection contingency.  The buyer has been verified.  

The dilemma:  HDFC/HPD income restrictions keep the prices low (for Manhattan) in my bldg. Those income caps will expire in 6-13 years.  

The co-op does NOT allow subletting, but I've had a grudging "family/roommate" pass since 2007. A lawyer sent me a cease letter in 2015 but I argued and they backed down quickly.  My cousin/roomie/tenant is moving out in August - not sure if I'll be able to move someone else in without trouble.  The seller I purchased from had $40k in co-op fines for subletting her place.

I could sell now and profit, but I sense that if I hold out until the income restrictions expire, the unit could be worth MUCH more (~$1mil wishful thinking?). I have a couple of solid deals pending where the cash would be useful.  

Do you think it is worth the risk to try to move someone else in/potential legal action/hold OR should I cash out now?  When I run the numbers, it seems like I should HOLD but it is hard to quantify all the variables that could go wrong IF the co-op board decides to come after me.  The stress of potentially having to duck/fight them for another 13 yrs makes me lean towards selling. Thoughts?

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  • Noman Tariq
    Philadelphia, PA · Member since 2016 · 67 posts · 18 votes
    10y

    you can share rent it to me next and I pretend I'm your cousin for 13 years and we split the profit (wishful thinking) :)

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  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    10y

    Sell. Issues with board and other potential deals are more than enough motivation. Speculating on something 13 years down the road is really just you deciding not to decide. 

    A bird in the hand is better than the finger from the board.

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  • Ericka G.
    OP
    Investor · Atlanta, GA · Member since 2015 · 366 posts · 283 votes
    10y
    Thanks for the input. I'm leaning towards selling but there is another voice telling me that I will regret it. I've never met anyone who was happy they sold out of an up and coming Manhattan area. Most say "man, If we still had that place, we'd be sitting on millions!" Property values in Manhattan pretty much have to go up since it is an island, right? Fear of the board would really be my main motivation for selling, which seems silly. But they are SCARY. Lol. Any experts on Manhattan/co-op real estate on here? The other option would be to
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  • Chuks Nwabuzor
    South Orange, NJ · Member since 2016 · 1 post · 0 votes
    10y

    Tough one.  If I know this area, based on the trains, you're talking about the SoHa/Mount Morris Park vicinity.  I say hold on to that puppy.  First off, there WILL be more offers.  And if you were to put it on the market yourself, my guess is that you'd have multiple offers over $400K.  If you hold until de-regulation in 6-13 years, you're probably looking at well over $500K in gross profit at minimum, depending on the condition and how much the area appreciates in that time (my guess is a lot).  

    As you know, NYC is a different animal, and space is running out fast.  I'd do whatever I could to hold on to it for as little out of pocket as possible.  Looks like you have some good equity as well?  Maybe pull a little cash out to float you for a bit?  Interest rates are fairly low--your payment may not change much.  Look into it, but unless the profits from your pending deals would most likely net more that what you think this co-op would in 10 years ($$$), I say HOLD!

    Wait... no.  Forget all that.  SELL.  To me!!!

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