Help! I've never bought an NYC Co-op

[Tyler De Young]

Alright friends, my wife and i moved to NYC, spur of the moment.  Sold our long term flip that we did ourselves in Los Angeles and wanted to get out of that city.  Made some money, my wife got offered a job in NYC so we decided why not?  We love NYC too much...  

Anyways, first thing we did here is start looking for inexpensive studio's that we could buy in cash, live in for a year, do a little rehab, then rent out and hold for 10 years, then do it again and again.  Found a charming studio in a 9 unit brownstone for 345k on the upper west side.  400sq/ft.  Co-op board allows unlimited subletting, no board approval needed, after living in it for 1 year with a 500 annual fee for the sublet.  10% Flip tax up to 10k at the time of sale.  monthly maintenance of 760.  Overall seems pretty straightforward.  My numbers show that in a year i could rent it out for around 2k per month. With no mortage we'd turn about a 3.46% cap after fees etc.  Cashflowing about 12k annually.  After depreciation, showing a loss.  This seems to be a hybrid, long term hold with some cashflow.  We'd continue doing these deals in cash, as we receive significant income from commercial real estate investments in CA and it sounds too difficult to deal with loans in this city with unordinary income.  Correct me if i'm wrong in that assumption. 

A few concerns that i have;

- The co-op board is investor friendly now, but how likely is it that the board changes that dramatically...  We've only ever invested in CA, co-ops are foreign to us.

- The 9 unit brownstone has no mortgage, debt, and has cash reserves yet I'm still weary of being apart of such a small co-op.

- Coming from California, we are going from one high tax state to another, yet are admittedly naive on NYC tax code compared to CA.

I'd love some experienced input, beat up my idea, tell me what you see as unrealistic.  Offer any thoughts or advice you may have.

Thank You!