All Forum Posts by: Billy Archer

@Charles Xia Thanks for your reply!  Cooperatives generally do not allow for investors, and a lot of Coops do not allow renting (subletting).  I saw a very savvy investor buy up foreclosed Coop units during the 08 mortgage crisis at multiple buildings we manage.  When you buy from the bank at auction, you gain a unit with unsold shares.  Provided the owner of the unsold shares doesn't move in, you are afforded certain rights that a Sponsor is afforded, ie you can rent without the Board's scrutiny of each tenant etc.  It's a back door that made one of my Boards livid, but I was impressed, frankly.  And importantly, I saw it can be replicated with a good team when there's suddenly a bunch of foreclosures on the market.

The downside is you need to buy the foreclosure with cash, and you are correct that you cannot see the unit first.  The goal would be to find a junk unit for cheap, put the money into renovation, and rent it until you decide to sell it.  Since there's no mortgage, you would count on repaying your investment with the cashflow it makes above monthly maintenance costs. With any luck you pay off your investment in 2-3 years, and the rest is pure cash flow. 

The upside is that the Coop is responsible for pipes inside the walls, exterior maintenance, snow, tax payments, snaking drains, etc.  And there's a full time Superintendent that generally lives on site to handle maintenance requests.  In essence you can piggyback on the management of the property since you're still a Shareholder.  Only certain repairs would need to be done and you can kick him $20-$40 per visit if your tenant has a problem, instead of hiring a handyman.  Since Coop buildings are meant for owner-occupied residences, not investor properties, you can see how there is a draw.  A lot of this rides, however, on the proper screening for a great tenant. 

What I was saying about refinancing is that I intend to BRRRR my first rental. I'm researching markets but I don't have the funds at this time to put 20% down. Therefore I'm doing research and getting myself ready, but I don't have any equity since I don't have any property currently. As soon as I am cash heavy, I was considering the Coop foreclosure route in a non-BRRRR strategy to help add to my portfolio. It essentially would be my niche, once I build myself up to it. Was hoping to hear from others that may have done this, since it is a niche and not quite spoken about, as far as I've seen.

Hello everyone. First time poster here, eager beaver newbie.

Has anyone on here bought foreclosed coop units for cash flow ? I don’t have any cash but I foresee that it could be profitable at the right price. I am raising capital for my first rental house, but I’m aiming for my first property/properties to be in a market that I can get the capital together to buy into quicker- ie 3+ hours out of NYC. I manage multi family Coop and Condo buildings in Westchester NY for the past 13 years , so I have seen that it’s doable in a perfect circumstance. I would likely consider Coop rentals once I have enough money from a refinance to buy it up. I’d like to think at least someone on BP has done this before ? I can’t seem to find anyone mention this but I haven’t searched too hard to be honest.