Co-op Owners w/ Multiple Votes
An investor currently owns one of the units in our 12-unit building, and the board is considering allowing him to place a bid on another one of the units. However, this would give the investor multiple votes. What are some of the hypothetical dangers of allowing that to happen?
An investor currently owns one of the units in our 12-unit building, and the board is considering allowing him to place a bid on another one of the units. However, this would give the investor multiple votes. What are some of the hypothetical dangers of allowing that to happen?
I want ROI and I’m an owner.
Surprised banks have an issue with one shareholder owning 20%. That would be a lot of even larger buildings that have a sponsor-owner.
Ditto. The issue is the number of shares owned by a non-resident fot the banks. Also, am imvestor’s interests are not the same as residents. He wants ROI — you want qaullity of life.
Banks frown on one shareholder owning more than 20% of shares. May give you trouble when you try and sell your unit.
I would echo what others have said, in NYC mortgage lenders are very wary of buildings with too many renters. If this investor is buying two units, he may end up buying more. I would discourage this, at some point in the future you or one of your neighbors will want to sell, and if there are more than one or two rentals, potential buyers will find it difficult if not impossible to finance. You may end up stuck with just one potential buyer – the investor.
Some lenders in this environment will not provide financing in buildings where a single shareholder owns more than 10% of the shares.
Since the investor will obviously not be living in the units, you have less flexibility in subletting other units (since banks don’t like to see too many units non-owner occupied). A non resident will also tend (perhaps) not to be as helpful in a self-managed building, nor will s/he (perhaps) be as interested in the same things as live-in owners (plantings, etc). Obviously one could argue that a good investor will care about the same thing you will. But maybe not.
Friend lived in a building where sponsor had a bunch of units and exerted considerable control, to the detriment of the building. BUT . . . 2 out of 12 seems far too small to be doing something untoward. Annoying on occasion perhaps, but downright nasty, doubtful.
I don’t see an issue. I’ve lived — and live — in buidings that have had a sponsor owning several units. Also, tenants have bought and combined units. No big deal.
I guess you could be scared of someone having so many shares. I could make up some hypothetical issues. But my experience is that the guy/gal with all those shares and who pays all that maintenance generally has the best interest in the building at heart.
It’s something I’d worry about in a small (5 units or less) place. The upside, assuming they’re combining, is fewer people in the building. Less water, less wear and tear. etc.