Real Estate

No one wants a co-op: what am I missing?

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  • Apr 26th, 2021 11:09 pm
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[OP]
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Dec 10, 2006
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No one wants a co-op: what am I missing?

My son is looking at a coop in Toronto. It's not a coop in the sense that it is affordable housing or anything like that. The 80's-vintage highrise building was built as rental and went co-op some years ago. But it's a nice building, recently reno'd, big unit, decent fees, current owners in the building we've talked with say it is very well-managed.

The mortgage rate will be over 3% and he needs a 30% down payment which I get - you're not buying title which can be sold, you're buying a share and the right to live there, so no FI would want to be stuck with it. But the price reflects that, I think. And no, I can't see the building going condo anytime soon.

Units are tough to sell - they stay on the market for months. But the only negative I see is the high mortgage rate. What negatives am I missing?
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Jan 27, 2004
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T.O. Lotto Captain
High mortgage rate, unable to buy with a small down payment + CMHC insurance, lower pool of buyers as a result thus less investor potential.
CO-OP's are also a different beast in terms of rules. I've seen some that BANN rentals.
Also not many banks are willing to do mortgage son co-ops. There are only a few random credit unions that do it.
[OP]
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Dec 10, 2006
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UrbanPoet wrote: High mortgage rate, unable to buy with a small down payment + CMHC insurance, lower pool of buyers as a result thus less investor potential.
CO-OP's are also a different beast in terms of rules. I've seen some that BANN rentals.
Also not many banks are willing to do mortgage son co-ops. There are only a few random credit unions that do it.
Yeah I think this building bans rentals - except for ones that were grandfathered in before it went coop. So, very little liquidity in any way.
Sr. Member
Mar 30, 2017
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need to study the rules of coop, some are overreaching, ban this ban that, etc.
profit on 6/23/2021 = 117.61% since 11/10/2020 to be exact😎
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seatiger wrote: need to study the rules of coop, some are overreaching, ban this ban that, etc.
Correct me if I'm wrong... But I believe with the way co-op laws are for co-ops as an entity... They can actually set up their own rules.
I recall back when I was working in subsidized housing... I learned of this. Co-op ownership structure is entirely its own beast.
like Mountain Equipment Co-op. Its like this weird entity. But yes... Some Co-Ops decided to base their residence on a particular background and it didnt violate any human rights laws. There were MUSLIM only buildings. JEWISH only buildings. Even an PERFORMING ARTIST only building.
It was wild!

https://www.paltoronto.org/
Sr. Member
Mar 30, 2017
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UrbanPoet wrote: Correct me if I'm wrong... But I believe with the way co-op laws are for co-ops as an entity... They can actually set up their own rules.
I recall back when I was working in subsidized housing... I learned of this. Co-op ownership structure is entirely its own beast.
like Mountain Equipment Co-op. Its like this weird entity. But yes... Some Co-Ops decided to base their residence on a particular background and it didnt violate any human rights laws. There were MUSLIM only buildings. JEWISH only buildings. Even an PERFORMING ARTIST only building.
It was wild!

https://www.paltoronto.org/
yea... and i read somewhere, not long ago, cant find the link now.
A resident got kicked out for not participating/contributing to the co-op. He has trade background. and the board decided he refused to do repairing work for the coop and got kicked out, something like that. He tried to fight and lost. crazy.

edit: found it here is the link https://www.straight.com/news/vancouver-housing-co-op-wins-dispute-with-resident-who-failed-test-of-good-neighbourliness
profit on 6/23/2021 = 117.61% since 11/10/2020 to be exact😎
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Sep 5, 2018
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I rented at co-op on Gloucester for a bit down at Yonge/Wellesley. Old building but I loved it. No short-term rental nonsense, residents were mix of young/old, walls were concrete so you never heard your neighbours, layouts/size were decent. Shared laundry and no AC...problem. Many units had a single wash/dry + wall AC unit installed so that took care of shared spaces and summer months. Maint fee for 1bed plus parking was about $650/m but that includes all utilities and municipal taxes, so it really isn’t too bad. No pools (good) plus a full time security guard at the front was nice. I seriously considered buying it after given the discount they sell for to condos, but as you mentioned you need to put 30% down and that killed it for me. Well, that and the property is never truly yours, as you own a share in the entire building but not the unit itself, which from an investment perspective won’t lead to much appreciation. At least in the short term.
Late Cycle Investing
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icantfigureoutausername wrote: I think they always have higher monthly fees as well??

Is a co-op and a co-ownership the same thing? This building was a rental and they reno'd the entire thing a few years ago, and advertised it for sale as a co-op. Here's an old listing:

https://foxmarin.ca/property/2550-bathu ... suite-203/
Its a specific type of corporate ownership
https://www.ic.gc.ca/eic/site/106.nsf/e ... .html#what

I'm still trying to wrap my head around it!

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