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Something doesn't sound right here

Posted by MikeW on September 01, 2000 at 11:43:02:

In Reply to: Thank you I have one more question posted by Phil Shore on September 01, 2000 at 11:22:42:

It sounds like the building is a stabilized rental. I'm assuming it's in NYC. Let me know if either of these are incorrect, because that changes things significantly.

If the building has not been converted yet, the LL will have to take the whole building through that process, making it either a coop or condo. The current renters will usually be offered an 'insider' price, which is a significant discount of the 'retail' or 'outsider' price. Back in the 80's the LLs would get the minimum number of units to sell, then stop selling them. This would give them what was essentially vacancy decontrol, and they would still run the buildings as rentals. This leads to a significantly wounded coop, and the people who actually bought have a hard time selling their units. You want to try to avoid this situation. I woundn't buy in a new converstion until the majority of the units in the building have been sold.

As far as taxes go, there are a number of personal deduction opportunities. First, you will likely have a mortgage, any interest and closing costs on the mortgage are deductable. For the first ten years or so, most of your mortgage payment would consist of interest. This is a substantial deduction. Also, in a coop the maintenance includes the building's underlying mortgage and property taxes. These are deductable, and the deduction passes through to the individual owners. There are no minimums or maximiums on these deductions.

: Is there a minimum tax per month or year? I am going to try and convert to condo
: The deal I made with the landlord is for Coop or Condo as my choice. I heard its a 2 year process for this to be processed with the Attorney GenTral. Tax is even more of a worry to me then heat.

: My apartment just became 421a status. It said hes supposed to reduce my rent by $2 a month. I read the guidelines here and it said the landlord can get a tax exemption from the state and get 2 percent more above the rent stabilized 4 or 6 percent rent increase, from the tenant. Is that true?


:
: : There are HUGE advantages to owning over renting. The tax break alone is worht 30% or more a month. Plus your building equity, unlike rent, where you're essentially flushing your money down the toilet. And what about having some control of your building. Tell me that wouldn't be a revelation to anyone used to have a non-responsive LL.

: : As far as coop vs condo, each has it advantages/disadvantags. Likely you would end up with a coop, since there are many more of them, and they're cheaper for the same type of property.

: : Yeah, the market is high, but whose to say it's going to go down anytime soon.

: : : I have lived in a rent stabilized apt. , For the past three years. I am now interested in buying my apartment. What are the drawbacks? Taxes? Condo vs. Coop?
: : : A co-op to me seems like just like I have to hire Union lawyers at $250 and hour to walk in the door. I'm not against Unions; in fact the original Union idea is noble to me, when Unions were really Unions. However, the way Unions were run in the 1960's thru 1980's, they were not really for the poor. It was for mostly the middle class. And now, that I went from being poor to well I guess the middle class (I hate labels). Middle class being the $35.000 a year tax bracket. I would prefer to be a billionaire a million means nothing today. A condo would mean not having to go to boring meetings with the same middle class that would never allow me to be in a Union, when they were really Unions in the first place. The deal the Landlord and I came to is fair but what is the legal process that we will have to go thru?


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