Property Q&A in Park Slope>Question Details

Lesleelbrooks, Home Buyer in Nantucket, MA

extremely interested please explain what's 'sponsor ownership' and what's the monthly fee? Thanks so much, Leslee

Asked by Lesleelbrooks, Nantucket, MA Tue Feb 26, 2013

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This question was asked from this property: http://www.trulia.com/property/3109153419-300-8th-Ave-3N-Bro…

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A sponsor unit is owned by either a corporation or an individual and has not been resold, therefore no board approval is required; to consider, oftentimes the buyer is expected to pay any NYS transfer tax, and seller's attorney costs, thus adding to the purchase price....
0 votes Thank Flag Link Tue Feb 26, 2013
Dear Lesleelbrooks:

When a co-op apartment is sponsor owned is basically means that it is owned by the co-op or an investor referred to as the "sponsor". This was often the case when a co-op was first developed and units would not sell. The co-op would basically rent out said units that didn't sell and the rent would pay for the maintenance and maybe even give some additional cash flow into the co-op. Over time, in most co-ops, the sponsor units eventually would sell bringing more money into the co-op itself. Other times, the co-op may sell all the units together as a package to an investor who then becomes the "sponsor".

Sometimes when co-ops have too many sponsor owned apartments, banks may not be give mortgages to purchasers looking to get into those buildings. The mortgage bankers just deem it to be risky because if something were to happen where many of those apartments were to be vacant, it could cause financial strife for the co-op itself. In this type of circumstance the purchaser would have to come in all cash without the need to get a mortgage. Thusly, the buyer pool for co-ops in buildings that have a high percentage (more than 50%) of sponsor ownership is very small. This creates an opportunity for an all cash investor to potentially get a very good deal.

Aside from all of that, the good thing about purchasing a "sponsor" owned apartment is that unlike traditional co-op sales, the purchaser does not have to go through a lengthy co-op approval process, thus streamlining the time frame of contract to closing.

By the way, the monthly maintenance on this unit is $378.00 per month. If I can be of further assistance, please let me know. Good luck!

Sincerely,
Mitchell S. Feldman
Associate Broker/ Director of Sales
Madison Estates & Properties, Inc.
Office: (718) 645-1665/ Cell: (917) 805-0783
Email: MitchellSFeldman@aol.com
0 votes Thank Flag Link Tue Feb 26, 2013
Hi Lesllebrooks
the maintenance is $378 per month for this 2 room studio coop. sponsor ownership means its
owned by the sponser the hold the majority of this shares. This needs to be an all cash deal asking is $189K. if you have any other questions please contact me directly.
madelinepadovano@fillmore.com
0 votes Thank Flag Link Tue Feb 26, 2013
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