GDoN Revisited by Hipchickindc – 1444 W St, NW #108


Hipchickindc is a licensed real estate broker. She is the founder of 10 Square Team and is affiliated with Keller Williams Capital Properties. 10 Square Team is a advertiser. Unless specifically noted, neither she nor the company that she is affiliated with represented any of the parties or were directly involved in the transaction reported below. Unless otherwise noted, the source of information is Metropolitan Regional Information Systems (MRIS), which is the local multiple listing system. Information is deemed reliable but not guaranteed.

Featured Property: 1444 W St NW #108
Legal Subdivision: Old City #2
Advertised Subdivision per Listing: Old City #2
Bedrooms: 3 Baths: 1 Basement: No Parking: Off Street
Square Footage per listing: 800
Type of Ownership: Cooperative
List Price at Contract: $194,849.
List Date: 05/14/2013
Days on Market: 8
Settled Sales Price: $194,849.
Seller Subsidy: $0
Settlement Date: 05/31/2013
Bank Owned?: No Short Sale? No
Original GDoN post is: here.
The listing can be seen: here . To see pics, open the link above and click on the camera icon to scroll through pics.

This transaction represents the sale of a unit in a cooperatively owned building which has affordable housing restrictions. For those who are not versed in co-ops, basically it feels a lot like owning a condo unit, except that the entire building is owned collectively by all of the owners (often with one big underlying mortgage on the whole building) and allows the co-op member proprietary use of a residential unit, whereas a condo unit owner owns and finances just the unit he/she occupies.

Cooperatives are actually quite common in DC. One of DC’s landmarks, The Watergate, includes residential buildings that are cooperatively owned. Since the beginning of 2013, there have been 243 co-op transfers. These sales ranged from a $48,000. transaction to the $2,330,000. transfer of a 4000 square foot 4 bedroom, 3.5 bath unit at 2339 Massachusetts Avenue NW.

Continues after the jump.

Co-op numbers are generally confusing because some buildings have underlying mortgages and some don’t. Most include the real estate taxes in the monthly fee. For example, for the subject property, the purchase price was $194,849, but only $95,000. was financed by the buyer and the buyer’s mortgage does not include real estate taxes. The monthly fee of $1550. would include a portion of the underlying mortgage, as well as the real estate taxes, some of the utilities, and the maintenance. There is onsite management and maintenance staff.

Income restrictions apply, so a single purchaser could not make more than $46,750., while a couple could not make more than $53,400. According to the management company, there are no restrictions on selling (some affordable housing options require owners to maintain residence for a period of time, or limit the amount of equity the owner keeps), however, pricing at re-sale will be limited by the parameters of the income restriction so that a qualifying buyer can afford the unit.

The listing agent was Al Rice of Stages Premier. Rodney Bennett of Fairfax Realty represented the buyer.

16 Comment

  • Thanks for posting this info on cooperatives. Can you recommend lenders that provide the share loan financing? Looks like a great deal for a 3BR unit, even though the equity upside is limited in the future.

  • So this person had a $100K downpayment but makes less than $47K.


    • i make less than 47, but if i sold my house, i’d easily have 100k in cash to put down if i needed to downsize.

      so, while not likely, it is possible.

    • daddy’s rich! guarantee you a young adult bought this, who doesn’t get paid much but parents have $$$$$$$.

      • The sadly ironic part about this is that this same person will probably be making $150K annually in a few years. Skewed incentives, IMO.

        Though, I do believe there are pretty strict rental rules in this co-op, if I remember correctly.

      • Or maybe they lived with their parents until buying this. Some lucky people grew up around here and can do this! You can save a lot quickly when you’re not paying rent.

    • Based on my understanding of co-ops, most of that 100,000 is covered by fees associated with the coop itself, and has nothing to do with a down payment. 1550 in monthly fees for a 200,000 dollar unit, however, sounds like crazy talk.

    • I think you’re confused about how co-ops work. This property (like most co-ops) has an underlying mortgage. The underlying mortgage gets subtracted from the sale price as it isn’t financed by the buyer, but by the co-op as a whole. you pay the underlying mortgage as part of your monthly fee. In this case, this unit’s share of the co-op’s total underlying is about $100k. The buyer finances the rest themselves, and pays the “mortgage” on this remianing $100k through their co-op fees. That’s why they are $1550 a month. Their total monthly expense is probably north of $2000.

      • Exactly, I think people need to read the article more closely. Co-ops always have high fees because they include the taxes and underlying mortgage, which is why the units themselves often seem under-priced. Co-op fees usually include heat/ac/electric and sometimes even cable. You need to look at the total monthly payment to determine if it was a good deal. A 95k mortgage at 3.5% is approximately $426, so the total out of pocket for this property is around $2000. Split that 2/3 ways and you have a great place for you and your friends.

        • High fees are not the norm. A large underlying mortgage reflects investment in improvements and it gets paid down over the time you live there–the part of the fee attributable to the mortgage goes down and this gives you more in equity. A big underlying mortgage reflects a building that’s made lots of improvements—you’d want to know what they are and if they’re durable (i.e., a new roof, new boiler or other heating/cooling system, tuckpointing, etc., which should last decades).

          Most coops have fees that are roughly equivalent to what you’d pay for a condo fee and property taxes. Some buildings may roll some of the utilities, e.g., gas into the fee as well. Coops always work better for people who are in it for the long run and often they are better buildings because of that. the flip side is that they can be slightly more expensive to finance and the number of lenders is smaller (although not as small as it once was, many large lenders now do coops), plus they are more likely to have more restrictions on renting than most condos. OTOH, purchase prices tend to be lower. The buildings tend be rather basic or quite luxurious (many of the “Best Address” buildings are coops).

    • Wrong. They took out a share loan for the $95,000. That’s how cooperatives work. They don’t need a $100k nugget.

      You have your own share loan. And, you also pay a coop fee, which represents your portion of the blanket mortgage.

    • I make not much more than $47 and could put $100k down. It took me a decade to save that much, but it is possible even without cash infusions from other sources.
      [And yes, I go out to eat and drink, take vacations, and buy new clothes sometimes.]

  • Yikes, a $1550 monthly fee seems a little steep for someone making $47,000 (unless maybe the person has a very frugal lifestyle and no student loan payments). Guess you’d almost have to get a roommate. If the buyer was a young person whose income has growth potential, it’s a pretty great deal–live with a roommate for a few years, and then as your income rises, you can afford to have a ton of space all to yourself, or enough space to start a small family.

    • It’s 800 square feet for a 3BR. It’s not a ton of space, let alone enough to raise a family. I am questioning if this place even has a living room (doubtful).

      If I bought it, I’d knock down some walls.

      • Ah, thanks! I was skimming the post and missed the square footage. In that case, that’s a pretty tiny 3BR. I live in a studio, and even that’s 500-550 sq ft. Although I guess you could squeeze 3 bedrooms into 800 if all the bedrooms were 10x10ish or something, and there wasn’t a ton of other hallway, closet, or kitchen space.

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