Lender · Brooklyn, NY · Member since 2016 · 110 posts · 48 votes
7y
A coop and a condo are two different things. When you purchase a coop you are purchasing shares in a corporation that own a building along with a proprietary lease to occupy one unit. When you buy a condo you are buying the actual apartment. Your question depending on whether it’s a condo, a coop or an HDFC coop have different answers and they also depend on what your goals are.
For an HDFC coop, they tend to have income restrictions (meaning you can’t purchase it until you make less than a certain amount) and as a result of only being able to resell it to someone also making less than a certain amount of money it usually means that the property doesn’t appreciate very much. There are also typically very strict rules regarding renting it out. As such, from those perspectives it may not make the greatest investment. That being said, if your goal is to decrease your housing payment and have some of that money go toward principal pay down so you can save up and invest elsewhere, it’s not a bad idea. Housing is so expensive in NYC and this can help curb that. However if you’re looking for appreciation and cash flow I’m not sure HDFC is the way to go.
Rental Property Investor · Brooklyn, NY · Member since 2017 · 67 posts · 29 votes
7y
@Michelle Backer My personal opinion is that right now is not a good time to buy a condo in Brooklyn, especially if you're looking to rent it out. The rent to price ratios make it virtually impossible to produce positive cash flow. If you have the money for down payment for a condo in Brooklyn, I would suggest investing elsewhere with higher cash flow. And to @Morris Cohen, income restricted units are not a good investment.
Rental Property Investor · Brooklyn, NY · Member since 2019 · 75 posts · 43 votes
7y
@Morris
Yes, the HDFC co-ops Don’t seem to be a good option now that I’ve done research, spoken to people like you..
Co-ops In general don’t seem like the way to go .. am I correct?
Any other recommendations to buy a condo . I used to live in Staten Island so I have to say no to st George. Williamsburg I heard was lower w the L train but now that it’s fixed I’d say no. Coney Island? I think the Bronx near Yankees stadium is a better investment .. still relatively inexpensive
I’m assuming Riverdale is obviously way too high ..
Are FHA loans approved in condos like this? The ones that require 3.5% down?
If so are they hard to get.
Any thoughts on this? I appreciate the feedback ! I am new to this but have a background in business, Own two .. it’s fun and I’m learning a lot .. I have good intuition. I want to make sure it’s an excellent investment
Real Estate Agent · New York, NY · Member since 2015 · 401 posts · 235 votes
7y
Most co-ops don't allow investors to purchase (although I have one coming up soon in Brooklyn that does allow open subletting). Often the ones that do are non-warrantable, which means it will be more difficult to get a mortgage, which is also something that is not good for an investment. FYI mine will be warrantable.
There are not that many FHA approved condos to begin with. If you did find one, a requirement of FHA is that it's a primary residence and so it can't be used by investors unless it's a house hack. Even if you could, no condo in and around the NYC metro area will cash flow with 3.5% down. You normally have to make a significant down payment to see cash flow around here. This area is an appreciation play. If you're looking for cash flow you'll have to look further outside the city. A lot really depends on your budget and goals.