Flipper Alert: Flipper’s Losing Their Shirts at 901 W. Madison
Some flippers in the West Loop are finding out that flipping isn’t always instant money.
Take Madison 901 at 901 W. Madison in the West Loop. This new construction building by Terrapin is 148 units. Terrapin’s website says it is 80% sold. Closings started in the Summer of 2007.
Currently there are:
- 9 units for sale (on the MLS- doesn’t mean that Terrapin is listing all available developer’s units on the MLS)
- At least 5 for rent
The flippers in the building are feeling an enormous amount of pain.
Unit #820: 2 bedrooms, 2.5 baths, den, 1600 square feet, southeast corner unit
- Sold in August 2007 for $543,500
- Currently listed for $579,000 (plus $25,000 each for two parking spaces)
- Assessments of $533 a month
- Joan Dim at Baird and Warner has the listing
Unit #513: 2 bedrooms, 2 baths, 990 square feet
- Sold in June 2007 for $339,500
- Currently listed at $326,900 (parking $25,000 extra)
- Assessments of $257 a month
- Listing says it’s the cheapest two bedroom available in the building
- No realtor has the listing (FSBO)
Unit #701: 1 bedroom, 1 bath
- Sold in July 2007 for $345,500
- Currently listed for $284,900 (parking is $25,000 extra)
- Assessment of $204 a month
- Quest Realty has the listing
Unit #703: 1 bedroom, 1 bath
- Sold in August 2007 for $280,000
- Currently listed at $284,900 (plus $25,000 for parking)
- Assessment of $204 a month
- Select a Fee has the listing
After you see numbers like these, it does make you wonder how many investors will even close on their units going forward in other condo buildings.
Madison 901 [website]
I don’t want to be a meanie, but I theorize that many of these condos that don’t sell or rent to cover will turn Section 8. Any thoughts on that?
Would they have to get the approval of the condo association? I also doubt that any Section 8 tenenat would be able to pay $2000 for a 2 bedroom unit. Even if the govt portion was around $900/month, the tenant wouldn’t be able to come up with the other $1100/month. I could see some of the cheaper rehab type developments in Rogers Park, Humbolt Park,… and fringe areas possibly turning to Sec 8 because they would be able to charge $1200-1400/momth.
How will the bankruptcy problems with Terrapin in the news today affect the prices in this building?
They are desperate for cash flow so buyers are king. Of course, anyone who thinks that the initial reductions are a deal will be catching a falling knife instead.
Just wait to see where the lenders will discount units after they take these buildings back.
Thanks, G! I appreciate your perspective!