Foreclosure Alert: Further Price Erosion in 2000 Lincoln Park West
We’ve chattered several times about the short sales and foreclosures in 2000 Lincoln Park West, a vintage apartment building that was converted into condos in 2004-2005, and which sits across the street from the Lincoln Park Zoo.
Just as a refresher, the units do not have central air, no washer/dryers and there is no deeded parking with the building.
Some kitchens and baths were upgraded and some were not (it depended on if you bought the upgrade package.)
Unit #1414 was in foreclosure when we last chattered about it in July 2008.
It’s still available and has now been reduced another $39,000.
How low will these units go before they finally sell?
Here’s the listing:
Corporate owned- sold ‘as-is’. Seller will not provide survey or termite. Buyer is responsible for city inspection, compliances and escrow if needed.
All offers must have pre-approval for financing or proof of funds for cash offers. No contingent on sale offers. Fax offers to listing office. Special addendums to be signed after acceptance. Earnest money must be certified funds.
Sergio & Banks has the listing. See the listing here (no interior pictures- sorry.)
Unit #1414: 1 bedroom, 1 bath, 950 square feet
- Sold in January 2005 for $402,500
- Bank owned
- Was listed in July 2008 for $238,000
- Reduced
- Currently listed for $199,000
- Taxes of $5855
- Assessments of $658 a month
- No Central Air
- No in-unit W/D
Unit #1214 had also been on the market last July and was also in foreclosure.
That listing has been cancelled.
But here are some interior pictures of #1214 (as the 14-tier units have similar layouts):
Unit #414 is also on the market as a “short sale” for $224,900.
Stay tuned.
Special addendums to be signed after acceptance
What exactly does this mean? Do they have extra requirements that you only learn about after signing the contract?
“special addendums” on a short sale screams to me the price you offer on the property is not the price you will wind up paying as the bank will come after you for the rest of the loan shortfall.
I’d stay away from short sales and just let it go into foreclosure. At that time it is clear the bank took the hit and no liability can be transferred to you above and beyond the agreed upon sales price.
Just make sure you have an attorney look at the docs closely before you sign anything (don’t trust your realtor to look at them and draft them for you). If you don’t like what they say, mark them up accordingly before you sign and send in an offer. Worst case scenario they reject your offer for covering your (legal) ass. If that happens you know they were up to something so consider yourself lucky.
They can’t have you make a binding offer, then tell you the terms, and keep you tied into the deal. Contracts don’t work that way. As long as you have an attorney involved you won’t get burned.
Short-sales are dangerous, but as long as you think and have everything you are doing looked at you will be fine.
$200K seems reasonable for a 1br on the park. it’s too bad it wouldn’t actually sell for that b/c of the bank. No cent air or w/d would be a dealbreaker for me along with that ugly ass parquet flooring. No balcony overlooking the park is awful, too.
I actually like the flooring and I love the molding and built in flair you can see.
However, it was dead to me as soon as I read
“Just as a refresher, the units do not have central air, no washer/dryers and there is no deeded parking with the building.”
All deal breakers for me.
The taxes and assessments are too high for a 1 bedroom.
The high taxes may have had something to do with the previous sale, where some bubble-buyer threw away $402,500. I’d hate to even think what the original list price was. The buyer probably fell into default as soon as their I/O ARM reset.
“The high taxes may have had something to do with the previous sale, where some bubble-buyer threw away $402,500”
Not possible, I have it on good authority that prices cannot go down in LP… must be a typo…
John
“I have it on good authority that prices cannot go down in LP”
Not to defend Stevo, but this fits 2 of the cardinal ruleSH predicting a bad investment–it’s a conversion and it’s on a major street–and possibly a third–high rise in LP. I suspect it will soon violate a 3d/4th–purchased in 2005 (we already have “purchased in 06 and 07” as a rule).
Just another example of an overpriced Invsco related conversion going bad.
Interesting example below. Not sure if the statement that the “residence was priced $75,000 below what its sellers had originally paid for the place” statement refers to the list or $195,000 lower sales price, but either way, taking the $50,000 makeover into account, quite a loss on the property. I’m sure it’s in the “wrong” part of Lincoln Park…
I think the sellers are probably quite smart (as sellers at least, not as buyers). They did what they had to do to sell now. Probably better off than next year.
http://chicagomag.com/Radar/Deal-Estate/November-2008/Sale-of-the-Week-Two-Steps-Toward-a-Quick-Lincoln-Park-Sale/
“Not sure if the statement that the “residence was priced $75,000 below what its sellers had originally paid for the place” ”
The post says: “the asking price, which would entail a loss for the sellers”, so I think that’s pretty clear that the ask was $75k below purchase price, which means they paid $2.47mm in 2004, put $50k into it and sold it for $2.2mm–a $320k (12.7%) loss, before transaction costs. But this was new construction, so it doesn’t count–the ruleSH tell us so–it was basically a guaranteed loser.
“Just another example of an overpriced Invsco related conversion going bad.”
FYI: This building was NOT a conversion done by American Invsco.
This apt is beautiful, but the units in this building are very small. Location is great.
But given the lack of modern amenity and steep maint, plus lack of basement storage, is it worth more than $175K? The housing market seems not to think it’s worth price, because it’s still sitting here after all this time.
THANKS for the discussion on the potential liabilities in buying “short sale” properties. Reader’s comments are all very valuable and might have saved THIS buyer a financial nightmare. Thank you all.
your right, the building was NOT an American Invsco conversion, it was done by NVG residential – CEO Nick Gouletas …. the same Gouletas family involved in American Invsco.
“CEO Nick Gouletas …. the same Gouletas family involved in American Invsco”
Son of Invsco’s founder. Struck out on his own.
Association fee is outrageous.
Short sales sometimes take a long time for a bank to accept a contract. I had one deal that took 4 months, but because the buyer was in no rush, they ended up getting it at the really low price that they offered. (The asking was 450K, the got it for 250K)
“Special addendums to be signed after acceptance”
This doesnt scream that there is something else wrong with it. I have sold plenty of foreclosures and short sales. (every single sale had special addendums) These where usually as is riders and other B.S. like that. It didnt drive up the ending price. I also wouldnt recommend staying away from short sales, becuase a lot of times the minute they go into foreclosure you have so many people bidding on them (if it is in a good location) that it almost always goes for over list. (once again, if it is in good location, and at a good price) A good chance is to just low ball a short sale. Take your chances. The worst they can say is no. Or sometimes it takes months. Keep looking. If you find something else, you can cancel your other offer.
“Short-sales are dangerous, but as long as you think and have everything you are doing looked at you will be fine.”
How are they dangerous? Read these addedums. I dont know where you guys have bought short sales or how many of them you have done before. As stated before, I do on average at least two a month. I get the addedums before I submit the contract. Your attorney reviews the information. If there is a red flag, you have a chance to get out. Just like any other deal, only this one is a chance of getting a great deal.