Should I buy a co-op or single family home??

Question

We are a young couple with a toddler renting in central NJ.
Someone told my husband it would be a GREAT idea for us to get a co-op in the Edison/Iselin area. That we could get one for 80-130k and live in it for a year and then rent it out for a profit...and buy our single family home in a good school district at that point. (But then we will no longer be "first time buyers".
Everyone I know has told me stay away from co-ops. And that if they go belly up, we'll be screwed.
Please give me any advice or personal stories you may have about co-ops.
Thanks.

Answer 1

Co-op or Cooperatives are a TERRIBLE INVESTMENT.

Here's why.

You don't actually own real estate. You own stock in the co-op.

You cannot take the standard deduction that people who buy real estate can take off their taxes for interest paid on real estate.

The I.R.S. won't let you deduct interest paid to buy a stock.

Buy the home and IGNORE bad advice.

Good luck

Terry S.

http://www.Welcome2Arizona.com

Answer 2

Withe the fluctuating real estate market right now I would not buy anything that you plan on doing a quick turn around with.I am stuck right now renting out a house that I was planning on flipping and selling. Luckily I've got good tennants but in the past with other properties I've not always been so lucky.You would be better off looking for a good deal on a single family home in a good area. If you cant afford one yet, keep saving. If you are at all handly, consider getting a bargain house that's not perfect if you are willing to do some remodeling and upgrades yourself.

Answer 3

It's not good buying a Co-ops. Never share profit with someone rather than your partner. First time buyer is actually harder than a previous home buyer. You guys can always be both on the title and then later pull one of you's name out to a different house (higher credit person). If you want to invest that way, Buy a duplex because you get to invest and own your home to yourself. I have a duplex and i pay 300 a month for it. I rent out the other side for 600.00 because i bought the duplex back in 97'. Which that doesn't matter but in the long run you will make profit. Now i'm out of california and i bought a nice house here in the midwest to live in. i pay 1,600.00 here in the midwest for my home. Back in california my 2 br duplex is renting for 600.00 and one br side is at 525.00 which gives me a profit of 825.00 every month towards my 1,600.00 bill here in the midwest. Not bad, plus when i bought my house back in 97 for 33k when they said home values would never go up agian, now my home is worth 270k and i haven't even refinance it yet, i'm 137k rich! Good luck and make the right choice.

Answer 4

When you buy a co-op you are buying shares in a corporation. When you buy a single family home you are buying a structure affixed to a piece of land. Your legal rights are different in each scenario . . . A single family home offers more legal protection from bankruptcy, liability, and other applicable laws. A corporation allows you to legally dictate who your neighbors will be and how your neighbors will govern themselves.

Answer 5

Neither. I AM serious and trying to help you. If you wanted to be a great chef, what would you do? You would go to a Cooking school and learn the trade from the best person you can find; right? If you wanted to be a lawyer then you go to Law School.
So you ARE a young couple with a toodler, wanting to LEARN how to buy real estate. Then make THIS your second job. Treat your shopping for a place to live for what it SHOULD be; the biggest INVESTMENT decision that your family is going to be making and study.
How? Find a "teacher" or two in your area and work for them for free inorder to learn the real estate investment business. Read books on real estate, attend free weekend seminars in your area; DO NOT buy the sales pitch at the end of the session. Talk to real estate agent and find one who PERSONNALLY owns rental property. Go to your bank and talk about interest rates, your credit score, how much you can qualify for. Talk to local property apprasiers and property inspectors, title companies, property insurance companies. From all of these people build a team that can help guide you to the best property for INVESTMENT that is also your primary residence.
Real estate agents see tons of deals and ALWAYS have more deals then they have the cash or credit to buy so if you find a GOOD agent and spend time learning your area and your market ad walking thru 100 properties on weekends then you will eventually KNOW what makes one a good deal, what makes another a great deal, and which ones you should run away from. This is not rocket science but it does take time to learn all the ins and outs of the market.
Right now is a good time to buy but depending on your local market, next year should be even better. This is a skill that you will use for the next 70 years so spend some time with a mentor who can guide you thru it and you can DOUBLE your household income IF you do it right TAXFREE.
As a married couple you can claim a $500,000.00 TAX FREE gain on the sale of a house that you have lived in 2 of the last 5 years. Would you move for 1/2 a million ever 2 years?
Instead of looking for a place to live; look for the best investment property that you can live in for 2 years and then resell for a huge profit.
Middleclass people look for the biggest house they can afford and spend 110% of whatever their income is. Rich people INVEST their money and MANAGE their money so money works for them and they do not spend their lives working for money. Where do you want to do in 30 years? IF you want to be middleclass then spend away on "keeping up with the Jones'" if you want to be rich then study how to manage money and how money can work for you by investing in assets . First asset should be your house and then buy rental property that pays for itself for free.
Yesterday I closed on a house in Las Vegas that sold to a middleclass homeowner for 300K in Feb. 06 and the bank foreclosed for 255K in July 07. My purchase price was 170K with 5K for painting and cleanup, it will rent for $1400 a month and appraisel after panting should come in at 250K. I paid cash for the house and will refinance at 6.375% interest on a 30 year note and a 70% LTV. If you learn to know numbers then you ALREADY can see that after I refinance this is a ZERO cash investment where I controll a 300K property and have breakeven cashflow. When the market turns around in a couple of years, I will be able to resell this property and pocket over 100K. This deal took me 3 weeks to put together and another week to finish. Would you work a month for 100K? IF you did this same deal in your area then that 100K gain would be tax free and you could use it for ANYTHING you wanted; college fund, retirement account, buying 4 properties that could create 500K gain, .........
The most important part is your education and building a team of experts around you who spend their lives learning everything you need to know. You do NOT have to know all the answers, you just need to know WHO is the expert that has the answer you need and get that person on your team.

Answer 6

hey am from CT too =] anyhow sure definately now's an extremely good time while the marketplace is sweet to purchase a apartment, or a house particularly in CT so u def prefer to exploit it!!! DO it ASAP formerly it differences cuz anyday it may substitute...good success

Answer 7

Hello,
For a small, growing family, I suggest a sfr(single family residence).. Financing is easier, and you will own it solely..
Please, if you have any questions regarding the financing, call me..
Joe at 1-800-379-2266 (licensed in PA and NJ)

Good luck!!