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Why Convert Your Cooperative to a
Condominium? |
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Immediate
Equity Appreciation
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Higher
Values
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Faster
Sales
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Limitless Financing
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Lower
Rates (Fannie Mae)
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Higher
LTV (Up to 95%)
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Home
Equity Loans Available
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Stable
or Lower Monthly Costs
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Cash-out
of Equity Tax Free
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Updated
Governing Documents
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Higher
Reserves for Community
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Better
Regulation Enforcement
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Reverse
Mortgages
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Easier
Estate Planning
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Lower
Board Member Risk
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Higher
Owner Occupancy Ratio
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Lower
Tenant Presence
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No
Obligation for Owners to Cover Loss of Default by Others
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Eliminate 80/20 Rule Problems
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Why
Convert
The Conversion of your cooperative corporation is proposed
as a solution to a staggering reduction in values of units in
the existing cooperative ownership structure. It is also a
desired vehicle in which to assure prompt and successful sale of
units, which a sponsor may continue to own. Moreover, selling
shareholders will be able to liquidate their property at higher
values.
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By converting the cooperative units into condominiums, the
inherent value of each shareholder's investment will increase. Moreover,
the target market would expand to include those who would never consider
purchasing a cooperative because of traditionally high maintenance costs.
Upon conversion maintenance
fees will be reduced to under one-half (1/2) of their current levels,
thus reducing the stigma of high cooperative maintenance fees.
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One concern that existing shareholders will have is the ability
to maintain the status quo, if they are not desirous or able to redeem
their units. This could be the case where a shareholder may have
purchased his unit as a cooperative at a very high price and leveraged
such purchase at the time of sale. At current market values, these shareholders may not be able to find lending institutions to provide
sufficient mortgages to liquidate their share loan and have sufficient
cash to redeem their unit from the cooperative. In those rare cases, ROA
Hutton will develop a strategy to allow these shareholders a certain
period of time, post-conversion, to either sell their units as a
condominium or to refinance their obligations once unit values are
further enhanced through a post-conversion market plan.
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By converting the cooperative units into condominiums, the inherent value
of each shareholder's investment will increase. Moreover, the target
market would expand to include those who would never consider purchasing
a cooperative because of traditionally high maintenance costs. Upon
conversion maintenance fees will be reduced to under one-half (1/2) of
their current levels, thus reducing the stigma of high cooperative
maintenance fees.
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