Foreclosures Still Occuring in The Sterling: 345 N. LaSalle in River North
If you’ve felt like you’ve “missed out” on buying a bank-owned unit in The Sterling, at 345 N. LaSalle in River North, fear not.
Foreclosures are still trickling on the market in the building such as this 2-bedroom, 27th floor unit that was recently listed.
In the last year, some lower floor 2/2s sold for around $250,000 to $260,000. This unit is on a much higher floor so it will be interesting to see a closing price.
Ayoub Rabah at Great Street Properties has the listing. See the interior pictures here.
Unit #2701: 2 bedrooms, 2 baths, 1160 square feet
- Sold in March 2003 for $507,500
- Lis Pendens in December 2007
- Bank owned in April 2009
- Currently listed for $259,900
- Assessments of $604 a month
- Taxes of $5543
- No parking – but rental available in the building
- W/D in the unit
- Central Air
Soooo, anyone have a total foreclosure number? Out of how many total units?
what a lame building
Wow – $1,065/month in taxes & assessments. What would this rent for?
You can live in the same place by committing certain crimes punishable by incarceration for far less money.
“If you’ve felt like you’ve “missed out” on buying a bank-owned unit in The Sterling, at 345 N. LaSalle in River North, fear not.”
Not so much a feeling of “missed out” as a feeling of “dodged that bullet”.
You can rent a place twice as nice in the area and not have that huge leveraged depreciating asset around your neck too… stay far far away from this really crappy building!
Also, what idiot paid $500k in 2003 for this dump!!! Smells like fraud but the timeframe is a little bit off…
“Also, what idiot paid $500k in 2003 for this dump!!! Smells like fraud but the timeframe is a little bit off…”
You’re forgetting:
(1) This was an Invsco property; I believe it had the 2/2/2 deal.
(2) If you pay less, you’ll make less money after 5 years. If you pay too little, you can pretty much guarantee yourself no appreciation. These folks would have made a killing if they’d just paid a little more.
No, no, anon. They would have made something if they’d just paid a little more. They would have made a killing if they’d just paid a lot more.
What’s the 2/2/2 deal… and lol at your comments!
2/2/2 = two years of free assessments, two years of free taxes, and two years guaranteed rent.
The guaranty came in the form of a check at closing. If you lied about owner-occupancy and got 100% bubble financing, then you walked away with money at closing. All you had to do was pay a ridiculous amount and wait for the always present appreciation to work its magic on your infinite leverage.
What could go wrong?
This building scares me. Everyday I see a new one come on the market that is foreclosed on/short sale/ price reduction. I would stay away. Why buy in this building now, only to see the one across from you next month go for 50K less. On top of this, the building is very bland.
WHAT A CHEAP DUMP!
“On top of this, the building is very bland.”
It was planned to be rental, and Invsco bought it before completion. Seems the upgrade package was standard Invsco not-very-far-up grade, tho that’s supposition based on photos and some dated references.
For an 1100 sq ft 2/2 in River North/almost Loop area, with full height bedroom walls (not lofted), windows in both bedrooms, in unit laundry, balcony, and parking options, I don’t think paying 250K is bad.
It depends on the building’s financials. You could get crushed with specials after buying there…I just don’t know….
The building has already had specials to deal with critical facade work so maybe it is on the up and up.
kind of like the look of this building. reminds me of a bic lighter.
Building is in great shape. Over $1 million in reserves after winning a lawsuit against the developer. The unit would rent for $2,400 which means this is a good deal. Don’t poo poo the obvious!
I calculate a monthly housing expense of $1,800 with 20% down and before tax savings. Could you rent a similar unit this close to the city for $1,800?
This is why most of you have no money… you are not all that smart!
Trolls and offensive posters should be banned…
I wouldn’t be as concerned with specials for maintenance as much I would about shortfalls due to the endless stream of foreclosures.
I hear that this is actually a decent place to live (rent) — it’s just that it’s too risky to buy.
How did you get to 1,800 monthly expense?
Mortgage at 5%, w/ 20% down is $1,116, prop taxes of $462, and assessments of $604 = $2,182
SHill-where do you get your rent #s? I have 2 friends who rent a 2br here and they pay $2200. Also, I see many many 2br units in RN/GC/Loop/SV for under $2400. granted, i see some over 2400 too, but they are all much nicer than the (extremely bland) finishes at The Sterling. Where do you get your mortgage calucations for that matter? I did a simple one on Bankrate.
$208K pricipal ($52K down (20%)) at 5.2% mortgage for 30 years equals $1155. Plus 605 assessment. plus taxes (if they got a deduction b/c it’s not worth as much i guessed at 4K/year) = $333.
$1155+605+333=approx $2100
SHill- In fact, i could rent a similar unit in THE SAME BUILDING for $1500!!!! http://chicago.craigslist.org/chc/apa/1199989410.html
2br at 345 N Lasalle $1500/month
Just to play devil’s advocate based on SHill’s “rent wisdom”
-http://chicago.craigslist.org/chc/apa/1200550175.html
2br on Kinzie/lasalle $2095/month
http://chicago.craigslist.org/chc/apa/1199610690.html $2150
Paying down the principal is not a housing expense. The interest portion of the mortgage payment is $867 + 605 + 333 = 1805.
I can’t believe there is still confusion about this.
The UHS have cultivated the “howmuchamonth” ideology for a long time.
It’s easy to understand the confusion.
True that but I swear this comes up every month.
And whatever the numbers say this building is still big trouble.
Burt- I still don’t think it’s worth making 2-300/month to take a gamble on this building. I made $300 after tax in May on $850 total principal in LVS.
I mean, if it loses 10K in value, you’re pretty much out 3 years of profits, besides interest deduction. If the 20+ unoccupied units stay unoccupied, that $600/month assessement could balloon. etc etc etc.
I’d rather throw the 25K downpayment in the market (if it were only between this unit and the market)
I think the layperson who fails to include the principal payment as a housing expense in their monthly budget but rather as a transfer from one asset class to another is doing so at his own peril.
“Paying down the principal is not a housing expense. The interest portion of the mortgage payment is $867 + 605 + 333 = 1805.
I can’t believe there is still confusion about this.
”
What do you expect from a bunch of people who think renting long term is a great way to save money. I have one word for all of you Inflation!
“I think the layperson who fails to include the principal payment as a housing expense in their monthly budget but rather as a transfer from one asset class to another is doing so at his own peril.”
Homedelete – you just simply don’t get it. Paying down principal is NOT AN EXPENSE anymore than your 401k contribution is not part of your annual salary. They are the same thing…
No, Steve, I get it. I get that it’s completely misleading to represent that principal is not an ‘expense’ which is true in the accounting sense of the word but totally fictitious in the sense of a household budget; unless of course you were also simultaneously pushing IO loans through your preferred scumbag mortgage broker.
“Homedelete – you just simply don’t get it. Paying down principal is NOT AN EXPENSE anymore than your 401k contribution is not part of your annual salary. They are the same thing…”
It does not follow that inflation = rise in housing prices.
Hey…. Who said May’s numbers would be great? I did!! Looks like the bottom is in place folks. Deflation is no longer a risk and who does inflation help??? That’s right… the leveraged!!
Sept – March #’s should be ignored and May and June will show you the current status of the market.
Cash flows and rent vs own analysis are two seperate items. You can either look at something through investment eyes or moron eyes. Your choice.
Does anyone that follow this blog actually own in the building and can give us their experience of living there? There is quite a bit of speculation about what the financials are like and the building livability. It would be interesting to hear from someone there.
When I was showing a buyer client around there, the hallways seemed to need some attention. They were scuffed and there was some general damage from what appeared to be move-in/move-outs.
Last question. Did Invsco write a check from that lawsuit? I had heard from someone else that the homeowners had won a suit, but couldn’t confirm anything from a Google search. I would think Invsco would appeal that ruling though.
SHill- I’ve been paying $1100/month for my 1br in RN for 3 years now. granite/w-d in unit/hardwood. I am definitely saving money if my mortgage would be $1500+ for a basic unit like “The Sterling”. I can’t even find 1br as nice for that price south of Montrose…
What do you expect from a bunch of people who think renting long term is a great way to save money. I have one word for all of you Inflation!
They won the lawsuite and received over $1 million. The building is healthy. Rents are down a bit because the building ended all corporate rental contracts (attempt to clean up its act and become more owner occupied) that were for less than 6 months. This has put a lot of pressure on rents over the past 6 months. There were a lot of units owned by corporates that would allow short term tenants. This will take another year or so to work its way through the building but rents should return to area averages within 24 months.
Location is great, pool, health club, parking, roof deck. Perfect for young professionals…
Shill- you are assuming rent in the area stays the same in 24 months. What if it drops and the new “area average” is much lower due to all the Invscam buildings having foreclosure problems in the area?
This will take another year or so to work its way through the building but rents should return to area averages within 24 months.
I have some friends renting these ’01 units on higher floors for $1400 a month. It’d be stupid to purchase here with that rent parity.
” Paying down principal is NOT AN EXPENSE anymore than your 401k contribution is not part of your annual salary.”
I never thought about it that way… well then COOL. I bought a place for less than rent parity!
“I never thought about it that way… well then COOL. I bought a place for less than rent parity!”
Yes and if you get your place above 80% LTV, you can do a HELOC for the equity amount above 20% at a ridiculous low interest rate like 2.75-3.75% for an emergency credit line with good terms. Sure as heck beats borrowing from your 401k if you are in a pinch in between jobs, etc.
Steve, you’re right. Your 401(k) is part of your annual salary when your employer pays you; the voluntary contribution to the 401(k) merely removes your contribution from your taxable income.
” Paying down principal is NOT AN EXPENSE anymore than your 401k contribution is not part of your annual salary.”
“What do you expect from a bunch of people who think renting long term is a great way to save money. I have one word for all of you Inflation!”
Once again, inflation is completely different from housing price increases. In fact, I don’t even think the government includes housing in it’s CPI calc. If it did, inflation in the early 2000’s would have been much much higher.
Steve Heitman on June 2nd, 2009 at 8:03 am
“Hey…. Who said May’s numbers would be great? I did!! Looks like the bottom is in place folks. Deflation is no longer a risk and who does inflation help??? That’s right… the leveraged!!
Sept – March #’s should be ignored and May and June will show you the current status of the market.”
I think the SHill missed a post here: http://cribchatter.com/?p=6859#comment-37684
ChiGuy – Why would you assume rents are going to drop in the next 24 months? Historically have rents increase over time. Do you know something we don’t? Sure they may stay soft for a year or so but where will they be in 10 years? up or down?
1) no one expected real estate to tank as badly as it did.
2) 2 bedrooms were going for over $500k for the past 6 years.
3) Hindsight is 20/20 and we all have much more clarity on Amerian Invsco than buyers in 2003 did.
I assume you are joking about number 1? Which makes numbers 2 and 3 kind of ridiculous, too.
Here’s the latest on the downtown rental market. Hope springs eternal in the face of job loss and supply growth. The shill’s comment at the end is hilarious. The baby boomers won’t save us, their children will.
http://www.chicagorealestatedaily.com/cgi-bin/news.pl?id=34078
Steve, the tough part to predict from the standpoint of a bottom is the foreclosure moritorium by banks. I do not think we will see a bottom until unemployment stabilizes further (maybe Q4 2009?). No one expects unemployment to peak until 2010 unfortunately.
Hey G – Most of what you say is funny.
How is LP holding up in this major downturn? Who was right and who was wrong?
Thanks in advance.
Keep erecting straw men, that’s all you got.
No comment on your incorrect call about May LP sales? How could you miss by so much?
What stats are you using to compare how LP’s prices have changed? I hope it’s not median sales prices.
G (is that short for GOD?) Jeesus louiseus…Can others make comments based on their observations without you looking down your nose to degrade them? Seems to be a daily obsession with you and it is tiring…
I just don’t see rents falling to the extent that most seem to think they will. It goes with the mindset here though, the homes for sale are ALL overpriced and they will not sell. Now that mentality is spreading to rentals as well? Come on now tightwads, just because you chose not to part with your $$$ does not mean the next person will not be willing to.
I know the houses I have as rental properties, only about 10-15% of them would I be willing to lower the rental price for the right renter. It’s not because of mortgages hanging over my head at all as I own them outright. It is more that I know their value based on the purchase price, the amount I invested in them and similar units located in the area. Just as I usually don’t lower sales price for any reason, I am not in the bartering and haggling business with them either. And guess what? I am at a constant 95% occupancy rate and have been for a number of years…I think most landlords see things the same way. For every person who refuses to meet that rent, there are 3 who are more than willing to pay it.
Good point, MPS. Just like the others you have made in this thread that the SHill chooses to ignore.
“It’s not because of mortgages hanging over my head at all as I own them outright. It is more that I know their value based on the purchase price, the amount I invested in them and similar units located in the area.”
Well other landlords and stuck flippers do indeed have mortgages hanging over their heads so this will be a factor that drives market equilibrium rents. It might just be that they are the ones that first set the new rent comps on the downward slope.
I am not concerned at all if my comments frustrate you, WL.
I often find yours to be hilarious.
I track daily closings and look to see how much the units were paid for.
Hey G, what are your contracted #’s for May 2009 vs May 2008?
You compare the sale price vs. the purchase price (sort of like Case Shiller)? Or just average the sales prices within a period against another?
I compare whether a particular seller sold for more or less than their original purchase price.
G O D…you c&ping and degrading other posters does not frustrate me at all, but it is tiring (and humorous) to see you attempt to place yourself on a know-it-all platform…and failing miserably. But whatever blows your skirt up!
“Well other landlords and stuck flippers do indeed have mortgages hanging over their heads so this will be a factor that drives market equilibrium rents. It might just be that they are the ones that first set the new rent comps on the downward slope.”
Well that does make my property occupancy rates stay high
and a steady flow of $$$ into my bank account. Don’t know if I can agree that rent comps are on a downward slope because of this though.
“Don’t know if I can agree that rent comps are on a downward slope because of this though.”
I haven’t seen a ton of evidence of this yet I was just speculating. There have been some rental deals out there from stuck flippers though. For instance this site featured a 2/2 with parking in OMP for $2.7k, sans parking for $2.5k which was a good deal.
Geeeeeeeeeeeeeeeee!
Looks like contracts written in the month of May (Lincoln Park) are in.
May 2008 – 110 contracts
May 2009 – 110 Contracts
Oh boy Geeee! Looks like the market has picked back up since the extreme slow down in the 4th and 1st qrts.
Wow that’s great Steve, pull random statistics out of your ass. How about staying on topic and posting the numbers for River North. You know the area 345 N. LaSalle is located. You know … the property actually mentioned in this thread.
Wow LP numbers support your arguments… I bet Wheaton’s stats also support your arguments. Why don’t we all cherry pick numbers from specific localities and data points which support our arguments and our logic. Ignore the overall national trends and put your head in the sand.
Oh wait… I forgot that is exactly what the brilliant minds did at Lehman Bros. and Wash. Mutual when creating complex pricing and valuation models for Credit Default Swaps. How did that work out for them?
I hate River North and always have stated exactly that. It is overbuilt and is over priced. 345 N LaSalle stands out as being priced slightly below what the rental market supports. This is why I like 345 n LaSalle even though I hate the rest of River North.
make sense?
“Looks like contracts written in the month of May (Lincoln Park) are in.
May 2008 – 110 contracts
May 2009 – 110 Contracts”
What do “contracts” have to do with anything? Many properties fall in and out of contract constantly.
What a meaningless statistic.
G already provided the numbers on “closed” condos/townhouses in LP for May 2008 and 2009 and the number of closings fell year over year by more than 40%.
I’m assuming the single family home market is similar (given how slow that is right now.)
I sure didn’t hear anybody celebrating the May 2008 numbers in 2008. They were thought of as dismal at the time. We have become so desperate for good housing news that we’re redefining bad news into good.
May #’s are a reversal of Jan, Feb, March, & April’s numbers which were all lower than 2008. It is a sign that things are stabalizing. I am not looking for appreciation but simply stabalization of the markets.
What percentage of the 110 were distressed/short sale/foreclosure?
I’ll side with SH on this fact…there are STILL sales going on, a lot fewer, but there is activity there. To base the market on this forum only one would think that ZERO properties were changing hands and the ones that were are priced at a tenth of their original prices.
Doom and gloom does not suit me…hehehe
Volume is at generational lows and all the bulls can say is: its not like the market is at ZERO.
more doom and gloom…from a renter no less…
“more doom and gloom…from a renter no less…”
You are damning the market with faint praise. Soft bigotry of low expectations or something liek that, no?
“more doom and gloom…from a renter no less…”
Yes maybe you missed the class sometime last year where the prestige factor of the renting vs. owning class did a 180?
What housing meltdown? I rent, biatch! haha
Lincoln Park sucks.
“What percentage of the 110 were distressed/short sale/foreclosure?”
Probably 1 or 2
westloopelo must continue to tell himself that owners are superior to renters. This is the only way he can keep himself sane after massively overpaying for his West Loop (West Side) loft.
I doubt the personal loss is that big to him. Instead of monetarily driven I really believe he is one of those wed to the idea of real estate ownership independent of associated cash flows.
If he truly has no mortgage on his properties he can always play Mr. landlord & collect rent checks from his props. Its those that can’t cover the mortgage – rent difference and go BK that I’m looking forward to seeing with the popcorn at hand.
“Yes maybe you missed the class sometime last year where the prestige factor of the renting vs. owning class did a 180?”
Bit off there bob… still goes Owners, Renters, Debtors… Renters might have passed debtors but definitely not owners.
Since “owners” and debtors are often the same thing, how does that fit in to your ranking?
Ze,
During the bubble when I asked people where they lived they would proffer that they OWNED in neighborhood X. Curiously they never mentioned having a mortgage lien for almost the entire amount of the purchase price of the condo.
Basically so few people probably paid all cash during the bubble period that for all practical intents and purposes owners = debtors.
Owners are at the bottom. They pay all the property taxes.
To respond to all of the above. finite definitions. I separated owners from debtors for a reason. One may pass off as the other but it is not the same. I already addressed that with a comma MPS.
“Owners are at the bottom. They pay all the property taxes.”
Renters pay property taxes too, just not directly.
“Renters pay property taxes too, just not directly.”
Not always, ask Turbo Tax Timmy … he’s renting his house in Larchmont NY for less than the mortgage…
“he’s renting his house in Larchmont NY for less than the mortgage”
But since the tax bill is superior to the mortgage lien, he’s just taking a big loss on his borrowed money. The tenant is paying the taxes plus ~60% of the interest on the loan. Any loss will hit the bank, not the taxing authorities.
You can go without paying RE taxes much much longer than your mortgage, so, I look at as the tenant is paying a portion of the mortgage and then Timmy is forking over the taxes on it, when he gets the cash. Oh wait, we know that Timmy doesn’t pay his taxes, that’s right.
Even worse, our treasury secretary is an FB. And a public servant living off the public dime living in a million dollar home…how does he afford that? isn’t there something suspicious about that? he only makes $191k a year yet has a 1.6 million dollar home….
Goldman Sucks probably bought him that house.
Wow, such anomosity from true blue renters…you’d think that renting guarantees you more financial security and an asset that will grant you comfort and peace of mind a decade or two from now, but wait, that is what owning grants you…
I am not against renters at all, I depend on those rent payments for my livlihood and for future investments. IF you can only afford to rent and pay for another’s mortgage, all is fine. Just a question, do you all still want to be renters in your 60s and 70s and in most cases, living in Gov subsidized housing projects?
“westloopelo must continue to tell himself that owners are superior to renters. This is the only way he can keep himself sane after massively overpaying for his West Loop (West Side) loft”.
Don’t fret about my sanity Pete, it is well intact! While I have no desire to tell you the sales price of my (heart of West Loop residence) I will say it was far from the inflated asking price. After a thorough inspection I was able to offer a ton less due to problems that were found and that I could easily correct with a bit of work. I am not of the mindset where I think owners are superior to renters at all. It is a personal decision and I won’t assume anything about your decision/situation. As renters, don’t attempt make generalizations about owners out of anomosity…it is not a good reflection on you. Not every owner is struggling and underwater on their properties.
What ever makes you biotches happy….go for it…keep that postive cash flow going right to my bank account, it is much appreciated!
Bob, prestige for being a renter?? Are you kidding?? If that is what you all need to tell your barstool buddies, go for it! I believe ‘prestige’ in the RE market is being able to pack up, chose from your residences in other locales and jet off without a care in the world knowing once there you have another place to call home. Prestigious hotel occupants…yeah, ok.
“I doubt the personal loss is that big to him. Instead of monetarily driven I really believe he is one of those wed to the idea of real estate ownership independent of associated cash flows.
If he truly has no mortgage on his properties he can always play Mr. landlord & collect rent checks from his props. Its those that can’t cover the mortgage – rent difference and go BK that I’m looking forward to seeing with the popcorn at hand.”
Money from ownership I consider as being a ‘perk’ from wise investing all my life. For all those rehabs I have completed, if they are not sold at the prices I deem reasonable for both sides, they become rentals without any major concern from me. I lose nothing in this situation. And yes, I do not carry one mortgage whatsoever…every prop is paid for in cash and always has been.
I don’t understand your last statement…does it really give you entertainment and satisfaction to see people default on their mortgages, sometimes because of no fault of their own? Something seriously wrong with you dude if that is the case!!
“Owners are at the bottom. They pay all the property taxes.”
So hate on the taxpayers who pay for your rugrat’s educations, pay for upkeep for basic governmental services, and on and on. What exactly are you contributing to the picture? LOL oh yeah, you pay an investor’s mortgage, never mind…
“from wise investing all my life.”
Westloopelo in a bubble everyone is a wise investor. I was a wise investor in the mid-late 90s investing in tech stocks. Its when the bubble bursts and valuations are again grounded in reality (PV of future cash flows, typically) that the wise investors are separated from the lucky ones.
And yes I will take a bit of glee in watching those who overextended themselves see the natural consequences of their spendthrift behavior.
“And yes I will take a bit of glee in watching those who overextended themselves”
I took quite a bit of glee in watching people overextend themselves in the tech bubble. Does that make me cool and hip like you too?
westloopemo, I have to live somewhere; do I want to pay through the nose with plenty o’interest to own? Or do I want to rent and keep a little money in my pocket? The answer since 2000 or so has been pretty clear: rent. Someday, and probably sooner than later, it’ll make more sense for somebody like me to buy. Nobody here is against buying westloopemo, we’re just saying it doesn’t make sense to buy NOW or pretty much anytime during the last decade. ANd the case shiller numbers putting chicago at July 2002 is reflecting that cold, hard reality.
“Does that make me cool and hip like you too?”
I dunno about cool and hip but it makes you more well grounded than all of these people who try to make you think you’re a terrible abomination for wanting anything negative to happen to anyone.
In westloopelo’s world, and many others, if we all don’t wish massive success on anyone there is something fundamentally flawed with our psyche. Maybe invent a DSM illness for that one. LOL.
In life westloopelo, there are winners and there are losers. I happen to derive entertainment from laughing at the losers, at least in so far as speculation goes. Everyone thinks they are somehow smarter and can beat the market, just like everyone thinks their child is a talented genius who is capable of discovering the cure for cancer after they graduate Harvard med school.
Obviously many people in 345 N LaSalle weren’t smarter than the market, were they?
“In life westloopelo, there are winners and there are losers. I happen to derive entertainment from laughing at the losers, at least in so far as speculation goes. Everyone thinks they are somehow smarter and can beat the market, just like everyone thinks their child is a talented genius who is capable of discovering the cure for cancer after they graduate Harvard med school.”
Lol, you nailed it. I bet westloopelo is a liberal and thinks “everyone should have a chance at success” and “we should have government spread the wealth” while not paying any taxes while he collects his craploads of money from his tenants.
While the liberal badge does suit me, that is about as far as it goes Sonies.
Everyone should have a chance at success no doubt about that and for you to argue otherwise is plain nonsense. I do agree Government assistance (other than schooling assistance for qualified students) is not the answer to achieving that success. Nor do I want (or do we see) government spreading the wealth…did you read that on a bumper sticker?
Since you personally do not know me, please refrain from saying I do not pay any taxes…you would be shocked at the amount I pay into the Fed and many states for the priviledge of workng hard, planning for my future and being successful in my career. Instead of attempting to degrade me while knowing not one thing about me, you should be thanking me for helping to provide an education for any children you may have or think of having.
One statement is true…I do collect a crapload, more than a crapload of rent money from my tenants for providing excellently maintained and beautiful places to call home. So renters continue to spend your hardearned money at dollar beer night while socking away the rent payments to your landlords…my new FX50 thanks you and I thank you!!
“everyone should have a chance at success”
You don’t believe in equality of opportunity? Or did you leave out some words?
Everyone does have a chance at success, just lots of people make bad decisions. I mis-worded it…
As for the “spread the wealth” comment, that’s straight from the liberal horses mouth.
“As for the “spread the wealth” comment”
Isn’t that also the point of “trinkle down”–to spread the wealth?
I don’t hear mainstream politicians or pundits saying anything about accomplishing it thru the government, but maybe you spend too much time in the Democratic Underground getting PO’d.
I’m sure this has been posted in other Sterling posts but this building is a nightmare. At building, Invsco underestimated the need for deeded parking, thinking that people will walk to work and wouldn’t mind renting parking. The finishes were blah and it’s a weird pocket in River North (west of the action, east of the cool park stuff west of Orleans). It’s a fab location to walk downtown, but its’ a bit desolate right over there.
Because of all the foreclosures, the building didn’t make it’s common area insurance payment. Homeowners assessments include “common insurance” which is insurance for the structure as a whole. Your homeowner’s insurance covers contents only. Therefore, if the building burned down, you would only be reimbursed for your contents, not your condo price for rebuilding.
This (illegal) snafu has made this building even less desireable for investors. Unfortunately, it’s also made the building “unwarrantable” for lenders. So all of the units for sale must be purchased in cash. The only cash buyers are investors, who (if they have a brain cell in their head) would steer clear.
As a Chicago realtor, I recommend that clients avoid Sterling (and 440 Wabash and 33 W Ontario and 10 E Ontario) like the plague. If a client decided to purchase in the Sterling, I would document all the known issues with the building, advise against it and have him/her sign off. This is to cover my brokerage from liability and to emphasize how much I disagree with this purchase.
I know that realtors get a lot of flack on this site, but many of us are not in it for the quick sale. I plan to sell real estate for a long time and a happy client typically tells 2-3 people about their experience. A dissatisfied client will tell 10-20 people. My reputation and financial livelihood is at stake and I would never want clients in a bad situation. A good realtor will encourage buyers to look at both the unit and financial stability of the building, which makes the Sterling a dud, to put it mildly.
As for the renters vs. owners discussion, I think there is little merit to implications that one group is better than another. Clearly, renters have more flexibility and often more disposable income. Owners get tax deductions and build equity (although not for 2008-2010). My buyer closed this year on a great 3 unit in Logan Square. People are often surprised that we’ve known each other for 3 years on a purely professional basis. When he first moved here, I evaluated his finances and career level and advised him to rent for at least a year. He waited 3 years and ended up in a great 3 unit building for the price he would have paid for a condo 3 years ago. I waited and he’s now a client for life, already saving for his next property.
Thanks for reading my two cents!
Nice post, Stephanie! Thanks for the input.
“At building, Invsco underestimated the need for deeded parking, thinking that people will walk to work and wouldn’t mind renting parking. The finishes were blah…”
Invsco did not build it. It was built by Charles Smith Residential and sold to Invsco (without the parking structure) upon completion. That also explains the finishes which were intended for rentals.
G – Yes, I agree with your comment about both the parking and finishes. I’m just making the point that Invsco should have considered the parking need before buying the building.
Little unknown Invsco fact… they bought/built the Buckingham (360 E Randolph – heart of Lakeshore East) in 1983 but because of skyrocketing interest rates, had to change it to rental. They went condo sometime in the mid 1990’s and it’s actually a well run, well built building. Lots of amenities. I have a client in an 1100 sf 2 bedroom and their assessments are about $750/month. This is for a full amenity (pool, workout room, 24/7 doorstaff and parking staff) 25 year old building. This is the same as the assessment for the Sterling, which is 5 years old! Plus, at the Buckingham, they estimate about 50% full time residents so you have wealthy people with in towns paying the assessment for the amenities that you enjoy!
“Invsco did not build it. It was built by Charles Smith Residential and sold to Invsco (without the parking structure) upon completion. That also explains the finishes which were intended for rentals.”
Thanks for the info G.
Actually, Invsco did offer an upgrade package when they first sold the building. It only applied to the kitchen (you could NOT upgrade the apartment bathrooms) and it was only available on units higher than the 20th floor (or thereabouts, if my memory serves me correctly.)
These would have been the units that were $500,000 and up (for the 2/2.)
If I’m remembering right- they also only offered one type of kitchen upgrade (which is why all the units basically look the same.)
The non-upgraded kitchen had laminate counters and smaller cabinets.
Did unit 2701 go under contract and if so for how much? I was unable to locate current listing.
Stephanie,
I have been told I can get financing to buy in this building, so I am not sure where you are getting “cash only” from.
As a first-time buyer (who now rents in the Sterling and has been happy with the building and new mgmt., as a renter mind you) it seems as though buying a 1 BR for
As a first-time buyer (who now rents in the Sterling and has been happy with the building and new mgmt., as a renter mind you) it seems as though buying a 1 BR for under $200k is a good value. I rent for $1500/mo now and could have a payment not too much higher. (Also, I’d like to take advantage of the tax credit this year)
So – having to stomach more foreclosures, potential increases in HOA fees (though my landlord mentioned reserves were now near $2mil) and the stigma of an Invesco building seem to be the obvious concerns. If I’m planning to live here for at least 3 yrs, I’d have to believe I can come out ahead – whether it be selling 3+ yrs. down the road or renting at that juncture.
Any constructive feedback on my thought process would be appreciated. Thank you in advance.
Unless you plan to stick around for at a minimum 5-10 years, I’m going to say… good luck. Buying a property is a long term thing and it doesn’t make sense most of the time to buy a 1 bedroom (in my opinion) unless you plan on being single the rest of your life, or plan to rent it out when you decide to “upgrade”. Being a Jr. Landlord is typically a nightmare, so just prepare yourself for that too.
Skip, why are you so compelled to buy? Do you really think that you will come out ahead if you live there at least 3 years? Why not just rent and continue what you’re doing? I don’t see any advantages to owing, especially when in your own words:
1. more foreclosures
2. potential increases in HOA fee\
3. the stigma of an Invesco building
4. a payment not too much higher (to own).
But hey, the market needs knifecatchers to set comps on the way down. If you feel absolutely compelled to buy like a cigarette smoker feels compelled to light up, then go ahead any buy, but don’t delude yourself into thinking this is a ‘good value’ or that you can ‘can come out ahead – whether it be selling 3+ yrs. down the road or renting at that juncture.’ That’s simply irrational justification for your compelling need to own in the face of all the facts to the contrary. Stop drinking the kool-aid.
I heard that you can’t get financing so it is CASH only.
Homedelet…
‘I don’t see any advantages to owing[owning]’ Is a very short-sided comment.
The thing is, Skip:
1) If you don’t own you get the luxury of choosing your own timeline for owning (provided you have the savings and income).
2) If you already own you don’t get the luxury of choosing your own timeline of not owning or owning in another place. Unless you’re rather indifferent to default or wealthy, that is.
Skip – I will chime in. I know the building weel and know the status of foreclosures and the HOA. You should be buying at a substantial discount compared to the direct area and the building is as healthy as they come. The HOA has $2 million in reserves after winning a lawsuit against the developer.
Your discounted purchase will shield you against future real estate value declines and payoff big when the River North stabalizes.
Many of the sales currently happening in the Sterling would be cash flow positive from a investors perspective.
You have protection on the downside and a big profit on the upside. Sounds like a no brainer.
Let the morons chime in now and tell us how paying a rent higher than the carry cost is the right move.
Hey guys – I have been telling you since May that the market was recovering nicely. 2 months later you see the headlines and are awfully quiet. If you think May numbers are good just wait a couple months until you see July’s numbers.
I hate being right so often 🙂 🙂 😉
Oh Steve, up to the same old shenanigans. The hair of the dog won’t cure your real estate hangover…
“#Steve Heitman on July 28th, 2009 at 9:04 pm
Skip – I will chime in. I know the building weel and know the status of foreclosures and the HOA. You should be buying at a substantial discount compared to the direct area and the building is as healthy as they come. The HOA has $2 million in reserves after winning a lawsuit against the developer.
Your discounted purchase will shield you against future real estate value declines and payoff big when the River North stabalizes.
Many of the sales currently happening in the Sterling would be cash flow positive from a investors perspective.
You have protection on the downside and a big profit on the upside. Sounds like a no brainer.
Let the morons chime in now and tell us how paying a rent higher than the carry cost is the right move.”
So the moral of HD’s story is…
Even if opportunity is staring you in the face, run away fast and do the most conservative thing possible. Hiding from opportunnity prevents the possibility of short term failure and basically gaurenttes never really accomplishing anything in life.
Welcome to HD’s vision on life 🙂
Heitman,
Did May’s sales numbers increase over last May’s or just over this April’s? EPIC FAIL
” If you think May numbers are good just wait a couple months until you see July’s numbers.”
The best part is knowing we’re both veterans here and knowing we’ll revisit your figures & claims come the winter. But for now lets forget about snowstorms and focus on the summer rebound at hand 😮
” If you think May numbers are good just wait a couple months until you see July’s numbers.”
Why wait? LP condo/TH sales collapsed again in July.
I’m puzzled as to how this happened in the SHill’s local market since he claims it is “recovering nicely?”
It appears that potential buyers do not agree with the current asking prices. Maybe they will come around?
Oh, that’s right, the winter selling season is just around the corner. That should help.
I own here – hold the insulting comments, pls! I bought a unit last summer and what I feel is a decent deal. Higher cash outflow than the previous rent I was paying (moved from a crappy studio in LP to an upgraded one-bed in a River North highrise), but a much better living experience.
I did my diligence when I purchased – requested the minutes, reviewed the budget, reviewed the (ample) reserves. Any investment has some element of risk and, after monitoring this one closely, I decided it was a risk I was comfortable with for my projected returns.
Finally, as I said, I enjoy living in the building. I like my view; I like walking to and from my office every day; I like inviting my friends over to play tennis; I like that the security guards recognize me.