Hi all! I posted a while back about renting out or selling my one bedroom condo and buying a new place. I've found a 2 bedroom co-op in an amazing neighborhood for a good deal and would like to put a bid on it. The unit needs some rehab (looking into getting those estimates now) but the location and price is great for the NYC area. The area it's in is one of the most lucrative areas in NJ with average home values going up 25% in the past 2-3 years.
I'm hoping to get this place, rehab it, and rent out the other room and significantly reduce the amount of money I'm paying towards housing for myself. When I move out of the condo I would be cash flowing at around $350-$500 per month.
The unit is listed at 169k and the real estate agent told me that there is another offer in on this place for slightly more than the asking price and that it's a 203k loan. I have no experience personally with that kind of loan but it sounds like its maybe not the type of loan that the co-op board or seller would love since the closing time on those types of loans can be long and down payments can be as low as 3.5%. The agent told me that the co-op board would view a higher down payment amount as more attractive since it shows that the potential buyer is more financially stable.
I'm thinking about offering 150k with at least a 20% downpayment (but can put down more if I had to). What do you guys think? Any insight as to how I can make myself a more attractive buyer even if my bid will be lower? I think I would be willing to go up to $160k but would prefer $150k obviously.
The good news is that the FHA doesn't lend on Co-ops. As such, the other offer with a 203k loan isn't really a viable offer. I know the Co-op needs work, but is it technically habitable as is? I know it may not be to your standards, but conventional lenders typically do not allow you to purchase something that isn't habitable, which may mean you may have trouble as well.
Sounds like a good strategy, but just make sure the co-op board allows for sublets. You may be able to get away with renting out the other room off the books, but I’d just make sure you have extra money in the bank should there be an issue. Good luck!
Hello! It is habitable as is, but it's not the prettiest. Real estate agent said that I could have roommate but the board would have to approve them which is ok for me because my standards will be high for who I want to have living with me.
I asked the real estate agent about to 203k/ FHA loan and she said she talked to the other potential buyer and they said they would do a conventional loan at the same offer price. Something about this sounds fishy, because she's a very experienced real estate agent and she would know about the 203k/ FHA loan. Any idea why she would maybe lie about that?