Lakeview 1-Bedroom Returns After Renovation: 546 W. Surf
We last chattered about this 1-bedroom at 546 W. Surf in East Lakeview in July 2011.
See our prior chatter here.
It had been a bank owned unit that finally sold for $77,400, which was $7500 over the last list price because there were multiple offers.
A few weeks ago, it came back on the market after a complete renovation listed for $169,900.
We couldn’t tell from the prior listing pictures, but apparently it WAS missing the kitchen.
I’ve been told that the renovation included the following:
-new crown molding in living room, hallway, bedroom
-new baseboards in all rooms
-replaced all drywall in every room (the walls were distroyed)
-removed popcorn ceiling
-installed overhead lighting in bedroom, foyer, and living room (only floor lamps before)
-new light fixtures throughout
-sanded & stained the floors
-expanded bedroom closet
-flipped the layout in the living room (moved a closet from living room into the hallway, and rebuilt a wall)
-new solid core doors throughout
-new hardware throughout
-new bathroom vanity with granite/maple
-new bathroom mirror
-new medicine cabinet
-new Bosch & Kitchen-Aid stainless steel appliances
-new custom Maple cabinetry
-new granite counter-tops, and undermount sinks
-new window A/C unit with remote
-new screen door for rear entrance
It still doesn’t have washer/dryer in the unit, central air or parking.
Since this unit is now, for all intents and purposes, “new”- what will it sell for?
Lance Kirshner at @Properties has the listing. See more pictures here.
If you want to see what it looked like before the renovation (kind of) – look here.
Unit #3N: 1 bedroom, 1 bath, 750 square feet
- Sold in March 2006 for $216,000 (looks like there is an error in the data as there are 2 sales recorded in 2006)
- Lis pendens foreclosure filed in September 2009
- Bank owned in January 2011
- Originally listed on Apr 12, 2011 for $129,900
- Reduced
- Was listed in April 2011 for $72,500
- Reduced
- Was listed in May 2011 for $69,900
- Sold in July 2011 for $77,400
- Re-listed and currently on the market for $169,900
- Assessments of $202 a month
- Taxes of $3037
- No central air
- No in-unit washer/dryer (looks like its free in the building)
- No parking
- Bedroom #1: 14×10
- Living room: 16×13
- Kitchen: 7×13
I think it will sell – but the profit probably isn’t that great if you think about it. I bet the owners are into the unit for about 110k (including carrying costs, closing costs on both ends, commission, and, of course the rehab). If they sell for 150, that is a profit of 40k – ok, but the risk is HUGE and the time line is 3-6 months, minimum.
“new window A/C unit with remote”
LOL. I can understand not being able to add in-unit W/D if the building infrastructure doesn’t support it, but why do a gut rehab like this and not install a spacepack?
I’m not sure I would ever take on a condo rehab project for what clio states above. Moreover having to deal with an association during the renovation and worse the sales period if it takes a long time to dump. Too many variables to deal with.
OTH I am very curious how long this sits on the market and what the sale price is.
“but why do a gut rehab like this and not install a spacepack?”
uhhh time and money – these rehabbers are not in it for preservation/kindness (in case you didn’t realize).
I can’t imagine not having parking or an in unit washer/dryer.
If it had parking, I would say the price was fair, but without it, I can’t imagine paying anything more than $130,000.
Looks like good value for addtil. $90K. The upgrades, GC work, GC profit seems fair at that price.
uhhh time and money – these rehabbers are not in it for preservation/kindness (in case you didn’t realize).
Uhhh yes I realize that, but it’s a dumb decision to not add central A/C on a total gut of a unit that also lacks parking and in-unit W/D. At least the place would have one of the three. It would be easier to sell and the extra cost would be easily recouped.
JPS – it is cost-prohibitive and would require several months (for approval from the condo assoc., etc.) This would put a hold on the rest of the rehab, thereby adding several months. The unit would incur more costs not only through the space pac itself but also several months of carrying costs. In addition, by the time it was done, it would be the dead of winter (terrible sales season). Take my advice, JPS, don’t attempt any rehab project – with that type of thinking, you will likely lose a lot of money.
Do developers do ANY mkt research before jumping into the fray? This one should’ve: 1122 Wellington has a top floor unit with central air and an outdoor space and has been lingering at 158k too. Its newer & I think has an in unit w/d too. This developer is going to lose money on this.
nice rehab.
“This developer is going to lose money on this.”
I don’t think i will lose money – it just won’t be a huge windfall. That being said, if you have 10 similar projects going on, it all adds up. I doubt the developer/rehabber is a novice – to be able to do what was done in 4 weeks screams “well-oiled machine”. I’m sure he/she/it has several projects going on.
“I can’t imagine not having parking or an in unit washer/dryer.”
Then maybe you shouldn’t be looking at one bedrooms in vintage buildings. I hear there is plenty of parking in the the various mid rise crapboxes in the South Loop.
*Does everyone here simply expect everything at any price point/location?
dude, welcome to cribchatter!!!
“1122 Wellington”
Not really the same ‘hood. Yeah, I know, b/t the two locations, I’d prolly rather be over on Wellington, too, but not nearly everyone agrees.
Also, this place has quite a bit larger rooms.
I’m with JPS–no parking, no A/C, no in-unit W/D. Three strikes, it’s out.
This is going to make the developer money as they can rent it out for a profit if they don’t get their price. They spent what like $25 grand in improvements? They are probably just trying to cash out so they can buy another foreclosure to do it again. I do think the price is a little high at this point–if they drop it to $149,900 they may be able to move it. No good comps in terms of recent sales this one is in the ballpark but bigger but required some work. http://www.redfin.com/IL/Chicago/2907-N-Pine-Grove-Ave-60657/unit-3S/home/13372100
Love old courtyard buildings and this is a nice one. I couldn’t care less about parking in this area and I doubt most at this price point will either. My place has an in-unit WD but i almost never use it, prefering to knock out whole loads downstairs where there are a bunch of machines. If this place had a formal dining space / den i’d really like it. Probably goes 145-155.
Aup, I totally agree – I hope that this will go pretty fast at 145-155.
It can be a pretty nice in town. If it had parking though, it would have worked much better as the buyers could do their laundry at their main house and just bring in what they want with them. Even without parking it is reasonable for a buyer that lives close to good public transport options (say Metra) but it would be less convenient. Now as far as permanent living, it sucks to have no W/D.
Seems decent
“Then maybe you shouldn’t be looking at one bedrooms in vintage buildings. I hear there is plenty of parking in the the various mid rise crapboxes in the South Loop.”
Your point would make sense if there was actually something vintage about this unit beside the exterior…lmao
I’m beginning to wonder if most here even care about real estate or it’s just an outlet on social matters and how people choose to live.
moo–in towns are soooo 2007
“moo–in towns are soooo 2007”
Not if you live in a boring town like us. Since we bought ours quite a few of our friends have bought as well or are looking. Actually some of our single friends have always had an in town but most of them rented as it is harder to afford two places on a single salary.
Nice renovation, and I’m guessing they will come out ahead. This place could easily rent for $1100-1200 if they weren’t able to sell for their ask.
“I’m beginning to wonder if most here even care about real estate or it’s just an outlet on social matters and how people choose to live.”
Ha, exactly. There are plenty of no-AC, no-parking, no-laundry, no-rehabbed interior apartments in this area. This newly rehabbed place will either sell for a profit or be rented for positive cash flow.
I’ve seen parking spaces for sale on this block for $30k (but I’m not sure how much they’ve actually been closing for).
To me, a big plus of having an in-town (rather than frequent hotel stays) would be a private, in-unit w/d (I’d never be bringing dirty clothes home; for that matter, I’d probably just keep clothes at the in-town, especially exericse stuff, etc.).
1122 Wellington is not exactly a comp, certainly not in terms of location.
I’ve seen listings cheaper that includes the perks of ac and even a garage. I understand it’s Lakeview and all but still a risk to place it in the market that doesn’t include the important basis like central air.
…”but why do a gut rehab like this and not install a spacepack?”
“it’s a dumb decision to not add central A/C on a total gut of a unit that also lacks parking and in-unit W/D. At least the place would have one of the three. It would be easier to sell and the extra cost would be easily recouped.”
I agree with JPS on both issues. There was a gut rehab and this is the PERFECT time to install a Spacepak. And yes, the cost would have been recouped if the fact it was installed was mentioned in the listing.
“…JPS, don’t attempt any rehab project – with that type of thinking, you will likely lose a lot of money.”
I disagree. There are many buyers who would not even think about putting in a bid on a place with no AC. This is something that is needed and would only serve to add value to the place…and comfort to the buyer.
One of the only times a rehabber loses money is when the place is redesigned in a very ‘personalized’ way or by overimproving the unit by having every trend that might be happening at the time installed.
Just as a buyer should not let the emotional side ‘I would LOVE to have a dual sink vanity’ or ‘everyone else is doing granite so I have to have it too’ play a role in the decision making process, so should the rehabber. Not everyone wants or needs a hot tub and just because the rehabber is in one everynight of the week does not mean it will make sense when it is time to sell.
That leads into my next issue w/clio’s response. Any rehabber who knows what they are doing would have allocated time and money into installing the space pak BEFORE any construction begins.
You make it sound like the AC was an after thought and of courese THAT would delay construction.
Sound decisions and adequate planning are key to doing a successful renovation, not only for resale projects but also when the project is a personal one for the buyers own long term use.
Looking to buy how do you know it will rent out for positive cash flow? the renovation looks fairly extensive..given the location and 1100 being a realistic rent number they will probably do fine but depends on reno cost
“Ha, exactly. There are plenty of no-AC, no-parking, no-laundry, no-rehabbed interior apartments in this area. This newly rehabbed place will either sell for a profit or be rented for positive cash flow.”
I agree.
“Looking to buy how do you know it will rent out for positive cash flow? the renovation looks fairly extensive..given the location and 1100 being a realistic rent number they will probably do fine but depends on reno cost”
1.) “the renovation looks fairly extensive” – It’s not extensive by any stretch.
2.) The developer is in to it for around $100k.
I think people on cribchatter consistently underestimate how much time and money goes into a quality rehab. Many of you have not sold a place and also underestimate closing costs of selling. Not to mention holding costs ( even if you don’t have a mortgage, you still have to pay taxes, assessments, utilities every month)
I don’t think this rehabber is going to walk away with more than 25 k or so.
“I don’t think this rehabber is going to walk away with more than 25 k or so.”
I agree and I bet the developer is expecting the same, which is not a bad return.
“Any rehabber who knows what they are doing would have allocated time and money into installing the space pak BEFORE any construction begins.”
westie, the more you post, the more I think you have no idea about rehabbing. Have you ever dealt with a condo association before? To install a space pak system would require months of proposals, review, acceptance, etc etc. – you can’t do this BEFORE you own the property. The MINIMUM time required to get this approved by any condo board would be 2 months – and that is the minimum. To wait 2 months, then start the rehab would add so much extra expense, it wouldn’t be worth it. Remember, this is not the park hyatt or trump tower – the target buyer is different that you.
Spacepak
It’s just not worth it in a place that is 750sqft!!
“It’s just not worth it in a place that is 750sqft!!”
And has a sub-$100 psf buildout!
And where every other unit in your building does not have it.
I bet the developer didn’t waste one second thinking about this.
On the other hand, if anyone has any info for a good spacepak installer or that other competeing system I’d be interested in getting in contact with them.
I looked at the unit before it was rehabbed and the unit is small and the condo association has limits on the number of units that can be used for rental purposes and they are at the max already. I think he is going to have a hard time selling such a small unit that can not be rented out.
“Your point would make sense if there was actually something vintage about this unit beside the exterior…lmao”
Did I say this was a vintage unit? No. Did I say this was a vintage building? Yes.
Reading comprehension… work on it.
It’s always cooler near the lakefront! All longtime Chicagoans know this. This place probably won’t need A/C that often. Fans could do just fine. Think Edward Hopper.
NOt that difficult to deal with condo boards if you go through the right channels and make your proposal in a professional manner. Will it add time? A bit but not the 2 months you say it would take.
For such an ‘everything is fine, there are people with money buying,etc’ type person, you sure know how to push the negativity button don’t you?
I would go through the easy process of doing such a small project but for you, it is definately a huge waste of time. Besides as was stated above, who would go through the trouble of installing such an AC unit in a small place like this when window units would do just as well.
I was merely trying to point out what what you said was incorrect, as usual. BTW, do YOU have any experience with the renovation of ANY type of property? You most certainly DO NOT have my level of expertise and experience. Why would a doctor have such information?
So, as you advised someone yesterday…STFU!!
“Remember, this is not the park hyatt or trump tower – the target buyer is different that you.”
I am not in the market for Trump or PH level units to renovate. While we generally would not take on a project of this size, this IS the type of property that we do renovate and where I make the most $$$ for the effort.
From what I understand American Vintage Home are the go to installers of Spacepak in the Chicago area. I have not used them but am seriously considering it
Not cheap to install.
I’d buy it. I can’t at the moment, regrettably, but I’d buy it. I come to town once a month on average. Window units aren’t the greatest, but for 2, 3 nights I could deal. Laundry in the basement? No problem. As someone pointed out, it’s 750 sq. ft., about double the size of my garage in L.A. — no one’s going to call this “home” for a lifetime.
It’s funny all the complaints of no parking in high density areas along the Lake. Isn’t that what city life is all about? Everyone on the CTA joining hands singing ‘Kubaya’? lol
“NOt that difficult to deal with condo boards if you go through the right channels and make your proposal in a professional manner. Will it add time? A bit but not the 2 months you say it would take.”
ARE YOU KIDDING ME?!!! First, you have to propose it, then it is brought up “at the next condo board for discussion” – they review the plans and then they vote on it the following condo meeting – and that is only if everything goes smoothly. Also, many condo boards don’t meet every month – and someone on the board ALWAYS has an issue that needs to be addressed. Basically it WOULD add a few months for a building of this size (sure, smaller 3 unit buildings are easier to deal with – but not a building this size).
westloop, you really are dense – but it is fun to tease you – you really can’t see how arrogant and pompous you come off – it is hilarious!!!
“you really can’t see how arrogant and pompous you come off – it is hilarious!!!”
Ms. Clio
I lurk in here from time to time and enjoy reading everyone’s posts. But I have to say that you are the arrogant and pompous one. A majority of your posts are condescending and negative towards anyone that disagrees with you or towards anyone you disagree with. You come across as a know-it-all. Chill!
I actually agree with Clio on the space pak, how much is it going to increase the selling price. A big window unit can cool 750 sq. ft.
If they can’t sell it for what they want, renting it for $1,100 a month will make a decent return on their investment, especially in the world of 0% interest on deposits. They can probably finance it 80/20 and pull out the rest to use in the next deal.
I think someone posted that the building has a rental cap and it has already reached it (but maybe someone else can confirm that.) If true- then renting it out is probably not in the equation.
Besides, renovators aren’t in the game to rent it out. They want/need to flip it so they can move on to the next property.
See if I can resurrect this thread today.
What are the thoughts on buying a place like this as a rental substitute? The P&I+taxes+ass roughly equal what these small 1 bedrooms would rent for.
For buying
-build equity
-get interest deduction
-lock-in costs
For renting
-less risk
-easier to rid of a place
Renting a place like this for $1,000/mo. would be $12,000 down the hole, end of story. Buying it would be roughly the same in monthly costs, plus of course a $30,000 down payment (money which is getting pitiful interest rates right now). But at the end of the day, you at least have something to show for it. A little equity, take the small interest deduction. And, as long the the HOA allows it, it seems you could rent the place out and cover your costs for the time being.
Even with a short timeframe of 2-3 years, buying a similar place to this is awfully tempting compared to renting.
“Even with a short timeframe of 2-3 years, buying a similar place to this is awfully tempting compared to renting.”
6% exit cost; possibility of not being able to sell for X months after you want to move. Really quickly adds to your total costs.
Yeah, I guess that’s what it comes down to: flexibility vs. potential profit.
When it’s time to leave, which will inevitably happen in a 1 BD, I’m almost sure I’d rather rent a place like this out rather than sell it if it cash flows though. There won’t be a lot of money tied up in it and the longer it goes the more money you are likely to make off of it.
“When it’s time to leave, which will inevitably happen in a 1 BD, I’m almost sure I’d rather rent a place like this out rather than sell it if it cash flows though. There won’t be a lot of money tied up in it and the longer it goes the more money you are likely to make off of it.”
Sure, but you’re stuck with the association’s (possible?) limits on renters. Which again messes up the calculus.
This has just been reduced $5,000 to $164,900.
They dropped it again to $154,900 and it’s under contract.
http://www.redfin.com/IL/Chicago/546-W-Surf-St-60657/unit-3N/home/39780815
“take the small interest deduction. ”
Which will be nothing at this level–you should brush up on your math and taxes.
Hi- I am the developer who rehabbed this unit. We just closed last week. I found all of your comments helpful and they will guide me as I continue to look for other area opportunities.
We closed on the unit at $140k. We had offers- and believe we would have sold it in the $160ks- if not for the fact that building non-owner occupancy went above 50% after we closed above the unit. That meant more than 20% buyer equity, which dramatically cut into the pool of people who could buy our unit.
The feedback we got was that this issue was more important than any of the other issues, such as no parking, no laundry in the unit or no “built-in” air conditioning.
Ultimately, the buyer was an investor, who said that he intended to rent it.
Incidentally, we are looking for more opportunities like this one. While we have an agent checking the MLS for us, I would like to hear about any properties that are not MLS listed. Please feel free to contact me at schiller@sshomes.com
Thank you.
Well scott I hope your buyer is happy. Unit #3E is a 1/1 foreclosure that came on the market April 3rd with an ask price of 100k. It also doesn’t look trashed, in fact recently rehabbed. I know if I was an investor I’d rather have a re-habbed unit with a cost basis of 100k than 140k, but we’ll see where this one closes at. I strongly suspect your investor was knife catching.
Bob- Thanks for the note. I was curious about this myself so I went to see #3E today. Because of the following reasons, I think our unit was worth way more than this $40k difference:
1. The entire unit pitches east. It is really significant- there was some major settling there or something, and it is the type of condition that would be a deal killer for most people. Plus it is the type of problem I don’t even know how you could economically fix.
2. The unit is much smaller- my guess is maybe 150 square feet.
3. Although the kitchen looks decent in the photos, it is messed up, and I think anyone who bought it would have to completely gut it.
4. Our unit was rehabbed- all new doors, trim, crown molding, hardware, AC units, electrical fixtures, bathroom, refinished floors and repainted- the whole feel of our unit was simply way different.
Anyway- I think they are going to have a tough time with this one. The size and the slope aren’t problems that can be fixed with a can of paint.