All Forum Posts by: Morris Cohen

@Chad Carson That's amazing and somewhat hard to believe! Good to know. Thanks!

I have a question about the podcast. I’m not sure if it’s better to post it here or in the forums. In the “deep dive” Chad mentioned he purchased a property at a tax sale and there happened to have been a mortgage on it. Are you required to pay that mortgage off or does it go away when you are given the tax deed?

I am looking at a 42 unit apartment complex. I have purchased many smaller multi-family properties in the past between 3-5 units, but nothing near this size for which I have outside management. Outside management will typically collect the rent and disburse it to me between the 10th and 15th of the month. I plan on using outside management for this as well. Would outside property management work the same for an apartment complex of this size as well or would we open up a bank account that we both have access to? Any other advice you have regarding the logistics of managing a property of this size would be very helpful. 

Thanks! I didn’t think about contesting the repairs. Have you contested repairs before? What has been your luck? Technically the inspection for my first unit passed, so I may wait for it to be an official repair before doing it. Oddly enough, I got all five units to pass for moving in without this being an issue. 

I have a section 8 rental property where there is a brick wall surrounding the property. It is not in very good shape, but is also not attached to the property in any way shape or form. It is a five unit property and all the units are section 8 tenants. My first inspection came up with a list of repairs all of which were pretty reasonable. However the section 8 inspector said that I needed to repair the brick wall surrounding the property or else she won't pass the inspection for the next unit that comes due. Are they allowed to ask for me to repair a wall surrounding the property? It's not part of any particular unit and so how can a unit fail for that reason? I spoke to a couple of masonry companies and there is no way to repair it. The wall would need to come down and be put back up costing me around $8k, which I don't want to spend. I can also just take down the wall entirely and leave nothing surrounding the property for less than half the cost. Is there any value to having the wall in the first place? Should I take down the wall and if so should I put it back up again? 

I would advise against a co-op being your first investment property. The co-op board has way too much control to make it work. They will likely require a very large down payment (if they allow investment properties at all) and will likely require a very large amount of liquidity post-closing. Not only that, they will require you to have the potential tenant interviewed and approved by the co-op board, which will likely mean you will go a few months without a tenant given the amount of paperwork they will need to put together to apply. All in all, co-ops can be a great way to buy a primary residence in new york city due to the cheaper price point than condos, but the red tape involved in the co-ops restrictions will likely make in not feasible. 

I'm very happy with the service I received from Fund & Grow. I would not have been able to build my flipping business without them. I highly recommend them for anyone in need of short term financing. They got me over $200k in business credit cards that I was able to use toward construction costs. 

you would have to check with the co-op board to see: 1) if they will allow you to rent it out 2) if so for how long (some co-ops only allow you to rent it 2 out of every 5 years) and 3) if they will allow you to do a cash out refinance. The co-op has the ability to decline your refinance even if the bank approves you for the loan if they don't think it's in their best interest. Also, keep in mind most lenders don't lend on investment co-ops, so your likely going to be stuck at around a 60% loan to value and a higher than average rate. It's possible, but it may be an uphill battle to try and get a significant amount of equity out.

Hi Richelle, 

I would say if you are getting a mortgage the costs should be around $3,500 (give or take) for all the bank fees with the exception of your attorney's fee. On top of that the co-op may have some minor fees for board approval (usually a few hundred dollars). The only time it's dramatically higher than that is if you are purchasing for over $1,000,000 at which time you are required to pay Mansion Tax, which is 1% of the purchase price (if the purchase price is $1MM it's a tax of $10k and if the purchase price of $999,000 the tax is zero). 

There are no prepaid taxes as the taxes are included in your maintenance fees with the co-op. You will be required to pay your first month's maintenance fee at closing. If you'd like, PM me and I can send you an itemization if you have a specific property in mind. 

Thanks, 

Morris

what do the bylaws of the building say on the matter? It will depend from building to building. The best analogy I can give is to compare it to buying a business. If you were buying 60% in an existing business, what percentage of the shareholders need to approve certain decisions? My first step would be to hire a really good attorney and pay him to comb through the bylaws, board minutes, financials, etc. This will give you an insight about what’s allowed and what isn’t, how the board operates, what goes on at the board meeting, etc. Good luck!