Purchasing A Coop Foreclosure..any Precautions?
An opportunity has presented to purchase 3br 2bath foreclosure for 70K. I have been informed the person currently occupying the unit pays 1070 per month (including mortgage & interest, maintenance, taxes). The realtor assured me my monthly would remain in this range. I am in a position to place 75,000 cash down (from the sale of my current residence) pending approval from 2 boards and a non refundable fee of approx 500. All in all, the unit is costing me about $210,000 ($345,000 for other units). Any precaution I need to be aware of?
precaution would be clean title and condition of the property. Get a good inspection and buy that property quick
Then sell it "cheap" (310k?) and quick and take your profit- there is no way you are going to cash flow a condo that costs $210,000....
Chris
Quote:
On 2006-05-02 22:20, ypochris wrote:
Then sell it "cheap" (310k?) and quick and take your profit- there is no way you are going to cash flow a condo that costs $210,000....
Chris
Not sure what you mean? This is a coop I would be purchasing. My condo would be up for sale.
Please clarify. I appreciate your feedback!
tell the broker to give you exactly what is owed.
then AFTER ,AFTER he tells you the balance tell him youll pay it at closing. but to take it off the purchase price. so if the balance is 5k and you purchasing for 300k new price 295. so really the seller is still paying his own bills. and have your lawyer add a contingiency that any other suprises will come out of the sellers side or the deal is null & void to cover your ass.
my 2 cents
and make sure all your requests in the contract is there, once you sign its over.
Thanks for the feedback!! If they violate the contingency warranting the deal null & void, could I also stipulate they would need to pay for my attorney fees?
Also since the Coopartive association assuming the underlying mortgage, would they be responsible for providing the financial information necessary or should the broker be versed on explaining this?
Thanks again for your feedback!!
1st your attorney should be doing a title check to make sure everything is ok. that should flag any outstanding debt.
2nd ask your broker for the financial statement from the coop board. i heard this refered to as the black book or something like that. this tells you if the coop your buying into is well off or everyone is going to pay because others cant afford to pay their mortgages or maintanace or both.
which would likely mean more maintance money coming out of your pocket. coops are tricky, and there are alot of rules to follow. your broker should be experienced in coops. but if they are new, no problem have them ask their broker. or just ask your attorney.
ask your broker if there is anything else you should know, ask specificf questions. so he /she can ask the other broker or seller. unless your broker is the listing agent, then ask directly.
as far as anyone paying your attorney fees i doubt it. your paying him/her to protect your best interest and thats what they are doing.
oh, a side note; make sure you can afford your motgage, if you cant , walk away from the deal. no sense in losing it in foreclosure. and try to get a fixed rate.
amy
i forgot, the liens attacht to the property, you buy the coop you bought the liens. so get all, all outstanding balances and add them up. make sure this guy is not upside down.
Thanks amynewbie!!
I need approval from 2 boards to assume underlying mortgage which is bundled in the monthly payment (mortgage, taxes, insurance, maintenance).
Shouldn’t the balance of the current mortgage & general allocation of the purchase price (70K) be in binder and contract as well?
PQTWO - Please keep in mind that unlike other forms of FEE SIMPLE or SEVERALTY interest ownership in a cooperative is generally ownership in a corporation with the resulting title interest being in the form of shares. As such I would ask my attorney to acquire a copy of the cooperatives bylaws to better understand your options. You might wish to check out Wikepedia to better understand the different forms of "cooperatives".
Good luck
Tricky