Posted by Sean on June 12, 2000 at 23:39:45:
Co-ops aren’t real estate. What you own when you own a co-op is stock in a corporation that owns real estate. Accordingly any note involved will be secured by stock. Exactly how you hypothecate and foreclose/reposess stock I’m not sure.
Co-ops - Posted by Ron (IN)
Posted by Ron (IN) on June 12, 2000 at 05:16:41:
I was approached by someone who asked about using an owner finance note to sell his co-op. What is a co-op? Is there a market for such notes? Anything special about notes backed by co-ops? Thanks.
Stock Cooperative and Proprietary Lease - Posted by John Behle
Posted by John Behle on June 13, 2000 at 22:51:34:
As Sean mentioned, you do not own any real estate with a co-op. You have stock in the corp. that owns the property. You then have lease rights to one specific unit.
When you sell, you transfer the stock and assign the lease. When you loan against a coop, you hypothecate the stock and do a c conditional assignment on the lease.
It may vary state to state, but in essence, that is what it is.
The problem with the paper is you are a minor stockholder in a corporation. I had some coop paper cut right out from under me when the majority of stockholders got together and converted it back to an apartment complex. Without having received any notice, I was cut out. Yes, I could sue…etc.
But, it is risky as a paper buyer.