Home Buying in New York>Question Details

Warren, Real Estate Pro in New York

WHERE TO GET FINANCING FOR INVESTMENT IN A CO-OP?

Asked by Warren, New York Mon Oct 29, 2012

Hello, I am looking to purchase a co-op for investment purposes but seems like most banks won't provide a loan because Freddie and Fannie don't allow financing for co-op as an investment property.
Anyone has any advice about what are some other ways to get financing? Through commercial lenders or private lenders? Any contacts will be appreciated. Thank you.

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Answers

15
Try Julie Teitel - last time I spoke to her, she mentioned adjustable rate loans for investment coops, not sure what percentage and rate
Julie Teitel
Senior Vice President
GuardHill Financial Corp.
140 East 45th Street, 31st Floor,
New York, NY 10017

Office: (212) 688.9500
Direct: (646) 519.7529
Mobile: (917) 648.1388
E-Fax: (775) 245.9435
jteitel@guardhill.com
1 vote Thank Flag Link Tue Oct 30, 2012
That's a lot! I'm surprised that so many brokers never heard about coop as an investment property.
Flag Tue Oct 30, 2012
Thanks for all your answers. However, my question is not about if I should purchase a condo or coop but rather if anyone can refer me to a lender who will finance co-op purchase for investment purposes? Maybe even a private lender or Commercial lender because conventional mortgage doesn't work in this situation. Thanks.
1 vote Thank Flag Link Mon Oct 29, 2012
Warren,
Co-ops generally expect purchasers to occupy the unit. They are not meant as investment vehicles. Most have a rather rigid sublet policy. The reason you are having trouble finding a lender to finance a co-op for investment purposes is because co-ops are only meant to be primary residences or pied-a-terres. Even if you had a funding source, except for a very few co-ops that allow you to rent it out from the start, your purchase would not be approved by a co-op board.

If what you are looking for is an apt. in NYC for investment purposes, that would be a condo. I would strongly suggest you work with a skilled, experienced agent to help you through the process. A great agent explains these types of things from the start, and takes you through each step right to closing. It will save you lots of time and aggravation.

Best,
Jenet Levy
Halstead Property, LLC
jlevy@halstead.com
212 381-4268
http://jenetlevy.halstead.com
1 vote Thank Flag Link Mon Oct 29, 2012
Hello Warren. It is rare, if not impossible for a co-op board to approve you if your intended purpose is to use the residence as an investment property, especially in NYC.

I hope this answered your questions. Should you have any additional questions, please feel free to contact me by the ways below.

Wishing you the best of luck,


De Vonte Williamson
Licensed Real Estate Salesperson
Proudly Serving Long Island
Coldwell Banker Residential
Direct:(631)638-6193
Mobile: (631)384-3695
cbmoves.com/DeVonte.Williamson
DeVonte.Williamson@cbmoves.com
"I Stand Behind Getting You Results!
1 vote Thank Flag Link Mon Oct 29, 2012
Dear Warren,

It is rare that you will find a coop where you can invest. There are a small handful in Manhattan but mostly like finding aneedle in a haystack. If you are looking to purchase an investment property, you should be looking at condos.

Are you looking in Manhattan? You should be working with a buyers broker who can recommend trusted financing institutions you need for your purchase, but who can also help you with the ins and outs of various buildings to consider purchasing and what your best ROI will be.

If I can be of any assistance feel free to contact me.

Ross Ellis
Licensed Real Estate Salesperson
Member of Real Estate Board of New York
Halstead Property, LLC
212.317.7828 direct
770 Lexington Avenue, 10th Floor
New York, NY 10065
rellis@halstead.com
1 vote Thank Flag Link Mon Oct 29, 2012
Warren,

While there are some COOPs that have very lenient sublet policies, most do not. A typically NYC COOP will allow you to sublet a home 2 out of 5 years. So, over a decade, you can sublet your home for only 4 years. Some COOPs also require a minimum occupancy (by you, the purchaser) of 1-3 years before they will allow you to sublet. If you are looking to buy a property and seek rental income than you should be considering a condominium, town-home, or multi-family home (depending on where in NYC you are looking). I would be happy to discuss your investment goals further and can also refer you to a NYC mortgage broker that will help you with financing. Please contact me if you're interested.
0 votes Thank Flag Link Fri Nov 2, 2012
Coops do not allow investors. it must by your primary residence. to invest in a property to rent out you need to look at condos.

If you would like to work with a broker please contact me at Echavers@elliman.com.
0 votes Thank Flag Link Fri Nov 2, 2012
Hi Warren,

You asked the million dollar question. Of course your income, credit, and LTV will make all the difference in the world. I can recommend an associate who facilitates hard money loans. Speak to Michael Sadov please email him at michael.sadov@gmail.com, remember to mention my name.

Best of Luck
0 votes Thank Flag Link Tue Oct 30, 2012
You must have a co-op in mind? Is a a condo-op? A co-op with condo rules? O do agree with most everyone answering here, but if you insist on ace-op for an investment reason, then maybe you would like to buy, use it as a pied. Terre or renovate then flip it...
There are definitely coops for investments, but they are not the norms, unless you wish to buy then flip
Of course that would amount to an investment. To answer your question, your financial background will dictate the type of loan you can get.
Let me know
Fern Hamberger
VP AssoBroker
Fhamberger@citi-habitats.com
646-660-0060
Stay safe during the storm. ;)
0 votes Thank Flag Link Mon Oct 29, 2012
Warren you have missed the point completely, so many of us have told you the same thing in different ways, the board is not likely to approve a buyer whose sole purpose is to purchase the coop for investment so how is financing going to help you. You didnt say anyhing about a condo before. You might have some flexibility with but can still be an issue in other ways.
0 votes Thank Flag Link Mon Oct 29, 2012
If you are looking for an investment property you need to buy a condo. Co-ops will not allow a purchase as an investment property, it must be your primary residence or you can sublet ususally after 2 years of occupancy.

Maryann Johnson
Halstead Property
212-381-2328
mjohnson@halstead.com
0 votes Thank Flag Link Mon Oct 29, 2012
Good afternoon,

Depending on the Co-Op most require
Their owners live in the Co-Op. Financing just depends on which Bank You use. Feel free to contact me at czacarias@rapidnyc.com. I also deal a lot with Co-Ops
0 votes Thank Flag Link Mon Oct 29, 2012
Well here's your other problem, the Co-op board probably won't accept you even if you find alternative financing. They want you to live there, and any leasing will be limited to a short period after you have at least lived there. Co-ops are a form of home ownership and not intended to be an "apartment" otherwise it will defeat the purpose of the "quality of life" for those who own.
0 votes Thank Flag Link Mon Oct 29, 2012
Very few co-ops will permit you to purchase for investment in New York City. You would be better off looking into Condo's. Where are you planning on purchasing property?

Barrie-Louise Switzen
Associate Broker
The Corcoran Group
Member Corcoran Cares
P: 212.875.4077
F: 212.230.4215
M: 646.831.5576
BSWITZEN@Corcoran.com
888 Seventh Avenue, New York NY, 10106
0 votes Thank Flag Link Mon Oct 29, 2012
Usually the co-op itself will have several recommended lenders. Otherwise, you're going to get very frustrated finding financing.
0 votes Thank Flag Link Mon Oct 29, 2012
Guys, your are missing the point, It is difficult but NOT impossible, my coop allows it and I need a name of the lender who can finance investment coop. If you have any names, please send along: ns1249@nyu.edu, Would be greatly appreciated.
Brokers, please do not solicit - I need a lender not a broker. Thank you.
Flag Thu Mar 20, 2014
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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