Flipper Alert: Bank Owned River North 1-Bedroom Sells and Returns 2 Months Later: 600 N. Kingsbury
Remember this bank owned 1-bedroom unit at 600 N. Kingsbury in River North?
We chattered about it at the end of July.
Several of you predicted it would sell for more than the list price and you were right.
See our prior chatter here.
It sold quickly and closed for $21,800 over the list price.
There were never interior pictures of the unit so we never knew the actual condition of the unit.
BUT– thanks to the investigative work of many of you (see the comments below)- it turns out that the unit has now returned back to the market for $78,900 more than the August purchase price.
And, we can now see the interior (the bank owned listing had NO interior pictures with the listing.)
Will this investor make a successful flip?
Jason Palermo at Re/Max Vision 212 has the latest listing. See the pictures here.
Unit #814: 1 bedroom, 1 bath, 705 square feet
- Sold in December 2002 for $215,000
- Lis pendens filed in February 2006
- Lis pendens filed in August 2008
- Bank owned in June 2009
- Was listed in July 2009 for $178,200 (parking included)
- Sold in August 2009 for $200,000 (parking included)
- Re-listed in October 2009 for $249,900 (parking $29,000)
- Reduced
- Currently listed for $238,900 (parking $29,000)
- Assessments of $341 a month (they were $406 a month when it was bank owned)
- Taxes of $3511
- Central Air
- Washer/Dryer in the unit
I’m not sure if this is a deal or not. I’d have to go see it myself to tell on this one.
I think the buyer got a pretty good deal…but not a steal.
It would cash flow on a rental basis. Not to mention you might be able to put an FHA insured loan on the property, claim the tax credit (to the extent you’re not “rich” per Obamas definition) and have no equity in the deal. So, I’d say it’s a very good deal.
The link from the old chatter shows some interior pictures:
http://www.redfin.com/IL/Chicago/600-N-Kingsbury-St-60654/unit-814/home/12659215
or is this a different listing?
Buy NOW or be priced out forever!
Maybe it was from the prior post, but isn’t the word on this building is that the construction isn’t very good? I think they might have had some issues.
“…or is this a different listing?”
Same unit – #814. That last link says it’s been on redfin for 26 days. Did someone buy this for $200K with parking and now is reselling it for $240 without parking? (or $29K add’l for parking)
Hmmm…
“Same unit – #814. That last link says it’s been on redfin for 26 days. Did someone buy this for $200K with parking and now is reselling it for $240 without parking? (or $29K add’l for parking)
Hmmm…”
Ok anon and hd here is some homework for you^^^^^^
Yup. It’s the same. This property is being flipped.
Flipper was cash buyer at $200,000 and now flipping for $238,000, listed 26 days.
Investor believes the property was undervalued at $200,000 and expects a quick sale at $238,000 or plus parking.
it makes me sick when I see this stuff. I hope this flipper loses his pants.
^ ^ ^
I’m a better detective than LaToya Jackson.
Interesting that the seller can offer 0, 1 or 2 parking spots (since #814 from the bank had just one I think)
“it makes me sick when I see this stuff. I hope this flipper loses his pants.”
I really hope not, that’s sort of extreme don’t you think? You saying that nobody that plops down 200k of cash on a risky investment is allowed to make money?
And I wonder if the Bank agent or whatever lied about multiple bids to jack up the price on this place?
That’s disgusting.
This is not a risky investment, this is speculating.
Closed 08/31/2009 for $200,000 w/pkg
Listed 10/3/09 for $249,900 plus $29,000 pkg
Reduced to $238,900 plus $29,000 pkg
Higher floor tier 14 units have rented for $1500-$1600 with parking. This isn’t a money maker at that rent without ignoring the $40k downpayment, repairs and vacancies.
We haven’t even flushed the speculators out of the market yet. A sure sign that the correction is nowhere near over.
somebody please tell me that the flipper at least did some reno. please?
then 200k w/parking
now 238 w/o parking?
Oh yeah, a look at past sales show that the speculator is asking what higher floors couldn’t sell last year.
Bought for $200K
Relisted for $280K 38 days later.
I think that’s where the “I hope he/she loses his/her pants” comes from. The only person more foolish than the seller here is the next buyer.
That and the millions of properties in pre-foreclosure/loan mod limbo….
“We haven’t even flushed the speculators out of the market yet. A sure sign that the correction is nowhere near over.”
Right on, HD, and the speculators ‘snap these up’ (overbid, too, haha) as if they won’t be common soon enough.
Nothing like severed fingers to show that Halloween spirit.
“Bought for $200K
Relisted for $280K 38 days later.”
Right idea…wrong execution. This could have worked had the current seller bought in the 170,000s and listed at 209,000. With the current glut of short sales and foreclosures available, however, a strategy that uses buy low, hold for 18 to 24 months, sell at a reasonable price would seem to have a better chance of success than immediate flips.
On a macro scale, some deep pocket developers (such as Shodeen) are scooping up unfinished residential sub-divisions at pennies on the dollar with the hope to reap big profits when the market gets better.
I don’t see that 18 to 24 month plan as a winner netdsgnr when the number of foreclosures/delinquencies in the pipeline far exceed the currently available “glut.”
This is a long ways from over.
“I don’t see that 18 to 24 month plan as a winner”
You could very well be right…although I hope that we have worked through much of the problem in the next two years.
PS – Yes…I’m a glass half full type….
“Not to mention you might be able to put an FHA insured loan on the property, claim the tax credit (to the extent you’re not “rich” per Obamas definition) and have no equity in the deal.”
“Yup. It’s the same. This property is being flipped. ”
Is anyone surprised that the entry point for Chicago real estate is holding up well? Afterall the easy money spigots are still on full blast. All you need is a FICO score.
I am also an optimist. Decreased housing costs are a good thing. Besides, they are inevitable.
This is not a problem that gets “worked through” by restoring unsustainable housing values. That was the problem, not the solution. So far, nothing has been done to work through anything – only to kick the problems down the road where they will be HUGE.
“This is not a problem that gets “worked through” by restoring unsustainable housing values.”
Yep…my definition of “worked through” is that the foreclosures have worked their way through the system to new owners at lower prices. These prices should help to establish the new parameters for house “values” and these values will be lower than typical asking prices today. (I wish I had a crystal ball to know exactly how much lower)
In my opinion, some government programs such as 1st time buyer tax credits are good to the extent that they encourage people who can afford a residence to buy now and get some of these properties into a safe harbor. What is wrong (as many on CC have pointed out) are the programs that encourage more over-leveraged buying. This just prolongs the agony.
Bad way to go about this “flip.” I think this investor got a good deal on this place. Not great but good. Now if he rented this out for 2 years, then put it back on the market he could probably make a decent buck. But going about it this way is just too soon and will never work. If he does sell this place, I bet he only ends up netting less than 10k.
Thanks to everyone who caught that this bank owned unit is now being flipped. I didn’t even think to check to see if it was back on the market- I was just doing an update post (how naive of me!) I will update the post to reflect the flip and we’ll have to watch it now.
G: I agree with your sentiment that as long as people are buying, flipping and continuing to speculate (you should see what’s going on in buildings like 10 E. Ontario) then we aren’t anywhere near the bottom. Yes, money will be made in real estate going forward (by savvy buyers) but these kind of flips show that there is little fear in the housing market. Bottoms are reached when there is fear.
The secret to success is the buy and hold strategy. But your timeline is too far short. You buy and then rent out the property for years, with a little net gain each month. You pay off the mortgage, usually in 15 to 20 years. Once the mortgage is paid off you have a decent cash flow after deducting taxes and maintenance. In that time period the property appreciates. Then you sell for capital gain. The idea of holding properties and flipping like stocks is a fairly new concept. The idea of holding a property only long enough for a capital gain, practically regardless of income and expenses is bubble based mentaltiy.
HD: It’s hard to flip real estate like stocks when it normally only appreciates somewhere from 1-3% a year. When you deduct sales expenses and fees, you realistically can’t “flip” it within only months and make anything.
Unless, as you said, it’s unusual market conditions (i.e. bubble conditions) or you get the property cheap enough and do solid enough renovations that someone will be willing to pay that much more.
Home renovator/flippers have been around for decades- but those who have done it a long time will say it’s a hard way to make money (until the bubble changed all that.)
I hope this guy at least has to hold onto the place over the winter so the holding costs consume all of his eventual profit. That would be a fitting reward.
I love this move. I’m a trader (though not in real estate) so I appreciate the idea of someone buying something for a price they consider cheap for pure speculation – that what’s makes markets so efficient. I hate that the costs “to trade” are so high in this market with commissions and taxes and title fees. But even given all of that, this person is not going to “lose their pants”. If there are no potential buyers at the listing, they’ll probably just sell at 210,000 and walk away with a small loss. If you’re plopping down $200k on spec, you can handle a $3-$5k loss.
Also, many of you are quick to point out that just because someone pays $500k for a porperty in a rising market doesn’t mean that it’s automatically worth more 6 months later when they go to sell it. The oppositte is true here. Just because someone paid $200k in a declining market doesn’t mean it’s going to be worth less. If there’s someone else out there willing to pay $240k because that’s closer to market value, then kudos to this speculator.
And I would be willing to bet this person WILL NOT be claiming the $8k tax credit and that he/she “is doing pretty well” by Obama’s standards. So I wouldn’t blame the government’s policies for this particular “trade.”
AK49,
From what your wrote I actually doubt you are a trader. Far from it.
How many questions were on your series 7 NASD test again?
You sound like a realtor. Albeit smarter than most, for sure, but no trader.
Real traders don’t write shyt like:
“that what’s makes markets so efficient.”
Sorry no but most have more humility and just do their job and don’t ask nor post these questions.
You are obviously someone involved in the biz trying to influence the market, in my opinion.
Do you even realize how stupid your quote makes you sound? Let me re-quote it:
“that what’s makes markets so efficient.”
LMFAO. And its my guess _real traders_ on this board can sniff you out for the fraud you are too and laugh at you.
Wow Bob interesting counter. I’m not really sure why my comments would suggest that I’m in the real estate biz… and it’s a pretty ridiculous conclusion to assume I’m lying about being a trader. It’s not that grand of a profession since it doesn’t even require a college degree, but either way I don’t really care about whether or not strangers believe me, that’s beside the point.
I completely stand by my statement that market participants make the market more efficient. Stability is a sign of efficiency. The most ridiculous prices both high and low come when market participants (market makers) panic and drop out from the market forcing the real flows to pay ridiculous prices. Russia’s market falling 80 percent last year and then rallying over 100 percent this year are signs of inefficiency and a lack of market participants holding things in line near real value. A market where people come in a buy something for what they consider cheap and the re-list it means that the spread prices between bids and asks are tightening and becoming more efficient.
In the area where I trade, most big players dropped out of the market for a period last year and all spreads widened. Banks had to pay ridiculous prices to hedge their transactions while volitlity was soaring and the consumer suffered. Once all the traders came back to the market and the panic ended, things stabalized and became a lot more efficient. You might think that watching banks puke their properties for 20 percent below market value is a good thing, but I view that as a sign of contagion and inefficiency and I’d rather see people narrow the range of prices. That’s my opinion of efficiency.
And Bob – while I’m defending myself …
I have no idea how many questions are on the series 7- I never took it. That test tends to be fore people dealing with stocks and particularly with other people’s money. Portfolio managers at banks, mutual fund managers, etc, they take a series 7. People who actually “trade” especially in the areas of commodoties, currencies, interest rates, they’re not generally required to take a series 7 when they work for hedge funds or prop desks. I hope that helps clarify your misconception.
You might be a trader, BUT most traders like to trade liquid instruments. They trade equities, commodities, and currencies because if they are wrong they can get out with relatively small market impact (small bid/asks, high volumes traded, small transaction costs). Applying trading analogies to real estate is extremely poor. Yes, there are illiquid instruments that traders specialize in but I tend to think the term is being mis-used in those situations, and these are the instruments that blew up the banks, hedge funds, etc.
What about this place as a speculation/investment? Yes the annualized return if he sells at his target tomorrow are pretty ridiculous. On a risk-adjusted basis not so much. Only way I could support this investment is if he manged to cash-out and get mortgage financing limiting his downside because that’s what a trader would do – try to get paid with other people’s money.
Last but not least, the term “market efficiency” is the most over-used and misunderstood term in the media (and even in markets). A market swinging from -80% to plus 100% does not prove market inefficiency. I’ll save the boring discussion for the group, but a Nobel will not be headed your way.
The reason I mentioned my profession was to suggest why my bias leads me toward enjoying watching someone make a speculative purchase. While everyone else is bashing this buyer and going so far as to wish them ill will and money lost, I will enjoy watching this transaction and won’t be disappointed if the person makes or loses money.
Clearly this was a spec if a cash buyer made a purchase and is immediately re-listing it for 40k higher. Getting mortage financing to limit his downside could have added closing costs and would have made it harder for the purchaser to quickly buy the property. If he/she sits on the place they might get mortgage financing, but for a quick flip it adds a lot of bargaining power to come in with cash only.
GLS – You are right about the Nobel. Clearly the best way to win that is to hold political office for two weeks and then get nominated.
Interestingly I derive far more pleasure out of shorts. Perhaps because it is difficult to short and make money given the tendency for markets to go up in the long run.
GLS – And perhaps also because you would generally be profiting when most around you are losing. I can see the deviant pleasure in that…
“homedelete on October 29th, 2009 at 3:14 pm
This is not a risky investment, this is speculating…
it makes me sick when I see this stuff.”
Good lord you’re such a queen.
Why do you give a $hit? “CASH BUYER”.
Any idea how the assessment is lower now than in the prior listing? Unlikely the building reduced assessments…would be good for their building in this market (assuming sufficient reserves) but highly unlikely.
Bradford,
i think HD, gives a shyt, and is more sensitive to these things cause he is a BK attorney. He is probably sick and tired of idiots across is desk that make insane decisions that land them in his office.
HD is probably so jaded by now that he probably truly belives that the cash used to buy this flip came from a Heloc on the primary residence.
also bradford dont you need to go clean your 5000 sq ft condo?
Speculating drives up the cost of housing for all future buyers. It hurts the economy because it leaves less disposable income in the pockets of consumers for spending.
Why is it when gas prices are high because of speculators it’s a bad thing, but when home prices are artificially high because of speculating, it’s a good thing?
Groove77,
It’s not so much that I’m sick of the debtors themselves because without them I wouldn’t have a job; but I’m sick of the speculating (and fraud) and easy lending that unsustainably increased the cost of housing, which is the primary cause of many of my bankruptcies.
“Groove77 on October 30th, 2009 at 8:00 am
Bradford,
also bradford dont you need to go clean your 5000 sq ft condo?”
Oooooooooooooooooooooooooooh burn.
Are you 8 years old?
Bradford’s condo is only 4,000 sq ft, not 5,000, (per his constant bragging), nevertheless, it cannot be large enough to contain his over-sized ego and overinflated sense of self-importance. Remember, he used to work on commercial real estate deals. He’s important and kewl.
homedelete – “when gas prices are high because of speculators it’s a bad thing”
I was wondering when someone was going to bring up the fingerpointing at speculating and use gas as an example. I think there’s a HUGE difference between speculating and manipulating and most of the time people are upset because someone like goldman sachs may have “manipulated” gas prices up but they use the word speculate instead. Aren’t all homebuyers actually speculating? Their using a highly leveraged down payment because they think in the long run they’ll have appreciation. If you thought home prices would depreciate it would never make economic sense to buy. So all homebuyers are relying on their speculative hunch that they’ll gain appreciation. People are finally realizing that this hunch becomes much more risky the shorter the time frame gets.
“It’s not so much that I’m sick of the debtors themselves because without them I wouldn’t have a job; but I’m sick of the speculating (and fraud) and easy lending that unsustainably increased the cost of housing, which is the primary cause of many of my bankruptcies.”
You should be more upset with the cost of healthcare since 50% of bankruptcies are caused by medical bills, and NOT buying too much house.
homedelete – You make a great point about speculating posing a risk if it artificially drives up the price. I totally agree with you. But when everyone steps out of the market and possibly allows home prices (like this one) to fall below a market rate, that causes downward pressure on existng homeowners and hurts their net worth and spending. I think there is probably a happy balance inbetween.
“Are you 8 years old?”
yes! i am rubber you are glue what ever you say bounces off me and sticks to you. plsstttsssspllsststststss (that was a raspberry sound)
and didnt you just call HD a queen?
as the great Anon (tfo) says POT MEET KETTLE!!!
I would rather buy a 1-br unit in rd659, which is around 210K. It has better location than this river west condo building.
Wtf is river west?
This is east of the river man, its River North.
That’s a myth and fallacy perpetuated by one biased study with bad methodology. Talk to any bankruptcy practitioner and they’ll tell you the same thing. it’s housing, credit cards, vehicle note deficiencies, and other various forms of credit.
“You should be more upset with the cost of healthcare since 50% of bankruptcies are caused by medical bills, and NOT buying too much house.”
“homedelete on October 30th, 2009 at 8:37 am
Bradford’s condo is only 4,000 sq ft, not 5,000, (per his constant bragging), nevertheless, it cannot be large enough to contain his over-sized ego and overinflated sense of self-importance. Remember, he used to work on commercial real estate deals. He’s important and kewl.”
Per a Google search, I’ve mentioned it only twice, and both times it has been in context, discussing $/sf. Are you bragging about being an attorney every time you talk about it?
And I am not a former commercial real estate lender. I *am* a commercial real estate lender.
“That’s a myth and fallacy perpetuated by one biased study with bad methodology. Talk to any bankruptcy practitioner and they’ll tell you the same thing. it’s housing, credit cards, vehicle note deficiencies, and other various forms of credit.”
No its not. There have been multiple studies done and they all come to the same conclusion. medical bills are the leading cause of BK.
Yeah, easy credit certainly didn’t help the matter of BK’s but how many people were loaned money that they couldn’t afford the monthly nut? People lose jobs, it happens, people can’t pay bills.
And who’s fault is it if these people choose to buy a house for way more than its worth with no money down? WHo’s fault is it that they don’t have 6 months of expenses saved? I’m sure its the credit card company’s fault too that people were cashing out equity in their homes or refinancing to pay off credit cards right?
http://www.cnn.com/2009/HEALTH/06/05/bankruptcy.medical.bills/
http://www.consumeraffairs.com/news04/2005/bankruptcy_study.html
You’re getting owned in this thread with your dumb comments. Are you sure you’re a BK attorney? “It makes me sick”… LOL whatever, I can certainly tell you that this CASH buyer won’t be one of your clients someday.
“You should be more upset with the cost of healthcare since 50% of bankruptcies are caused by medical bills, and NOT buying too much house.”
Jeebus, I could go on for *days* about the problems with that “research”, but that’s just too far afield, even for me. Suffice to say, you should be *very* skeptical of anyone using that “data” to talk about the need for health insurance reform or bankruptcy reform (both of which I favor, but in different forms and for different reasons than those using that “data”).
Suffice to say, the “crisis” is more about loss of income from short-term disability than it is from medical bills–which is *not* to say that medical bills are not a problem, just that it’s more often loss of income/loss of job that drives the BK.
I am NOT a trader but I thought that one of the things that traders like to do to make money is exploit inefficiencies in a market.
If banks are setting their foreclosure prices “too low” due to panic, lack of buyers, etc then there should be an opportunity for speculators to buy low and sell high. The question is what is “too low”. There is a fair chance that market prices (non-foreclosure) in the near future will not be that much higher than many current foreclosures, making flip attempts “inefficient”!
There’s little difference between a hedge fund speculating on oil future contracts and this capital investment group (aka flipper) investing in properties. Both are buying short term looking to speculatively sell the product for a significantly higher price within a short time period. Just because it’s a cash deal we don’t know if the cash he used was leveraged. Maybe he raised $50k from four separate investors who each borrowed their money from HELOC’s from their primary residence. We have no idea. But we do know that this unit sold, after overbidding, just a few months ago for $200,000 and within days it’s s relisted for a price $67,000 higher. It seems to me this guy thinks its 2005 all over again.
“That’s a myth and fallacy perpetuated by one biased study with bad methodology. ”
Oh, the methodology is (most likely) okay, they just interpreted the raw data in a way to make their point–very, very biased, but I doubt the methodology itself was bad.
http://www.aei.org/speech/100089
“A major shortcoming with both the Himmelstein et al. (2005 and 2009) studies is what economists dub the “sample selection issue”. Himmelstein et al. (2005, 2009) conducted a survey of bankruptcy filers from public court records for the year 2001 and 2007. Based on a sample of 1000 debtors, they concluded that more than 50 percent of these had filed for bankruptcy due to a medical reason. By limiting the sample to those who had already filed for bankruptcy, the study overstated the incidence of medical debt. To account for causation, the study sample should have, at the very least, included a “control” group of medical debtors who did not file for bankruptcy. In other words, if the authors were trying to establish whether medical debts cause bankruptcy filings, the appropriate sample should have included households with and without medical debt, and households who filed or did not file for bankruptcy. In short, what the authors have established is some correlation, but not causation.
The sample also seems skewed towards debtors with high medical debt. The USTP report of bankruptcy filers, which included a much larger sample of 5203 filers, found that 90 percent of filers had medical debts less than $5000. The Himmelstein et al.(2009) study reports nearly 35 percent of filers with more than $5000 in medical debt. The authors make no attempt to reconcile or explain their findings or reveal the distribution of medical debts across filers in their sample.”
“By limiting the sample to those who had already filed for bankruptcy, the study overstated the incidence of medical debt. To account for causation, the study sample should have, at the very least, included a “control” group of medical debtors who did not file for bankruptcy. ”
Interesting but, why would they include people who haven’t filed or might file?
Isn’t the point of the claim that medical Bills cause bankruptcy not the other way around of bankruptcy causes medical bills? I don’t think that people who have the means to pay their medical bills have anything to do with the study, or am I missing something here?
“[HD citing AEI]”
Dude, countering one biased source using another biased source isn’t sufficient.
Have you read the “study”? It’s bias is all in the interpretation of the data; the methodolgy is valid, but they then exclude/parse-with-bias a bunch of stuff that doesn’t help establish their point.
They include in “medical bankruptcy” those who:
1. reported uncovered medical bills over $1000 in the past 2 years
2. lost at least 2 weeks of work-related income due to illness/injury
#1 describes me–dedcutibles + co-payments are over $1000/year for my family; it’s wildly over-inclusive, but not a methodological failing.
#2 is not a medical insurance issue, it’s a disability insurance issue (OR a anthropomorphic duck issue, if you prefer).
These are both interpretation issues, not method. AEI thinks they should have re-designed their method, but AEI isn’t particularly consistent, if using bad method supports *their* policy goals, it’s good enough.
On average, if a person uses an agent and sells their home, would you expect for them to get a higher price than the same place being sold by a bank? Sometimes a little cleaning, a layer of paint, some simple staging, some marketing and some patience can be a big difference between a mom and pop sale and a bank sale, right? So if the same property sells at two very different prices, there should be a realistic arbitrage between the two. If there were no stamp taxes and realtor comissions, I would think someone would be able to buy places and quickly squeeze a little juice out all the time; but the 7-8 percent in fees/taxes elimates most those opportunities.
This must be happening all the time especially if someone can elimante half the commision because they themselves are a realtor. I can’t believe everyone is so suprised/angered by these people.
“I can’t believe everyone is so suprised/angered by these people”
the anger stems from actions like these lead to inflating prices/comps/ect.
and look where that got us as of today.
It’s the chicken and the egg. Did speculators drive up prices or was it cheap money, bad loans, and over leveraging that enabled specultors to enter the market thinking they could make money? There are a lot of different areas to point the finger.
“Did speculators drive up prices or was it cheap money, bad loans, and over leveraging that enabled specultors to enter the market thinking they could make money? There are a lot of different areas to point the finger”
point the finger at every one, no chicken and egg. all it took was one of those to stand up and say hey this is not right. (if its too good to be true it is)
and at this point i can give two shyts who’s at fault. JUST FRICKEN FIX IT GOING FORWARD. just fix it.
FHA loans (more overleveraging), 8k tax credit (extend it till next year still wont work), flippers like this one (insanity), and banks like mine (who contiually keep asking if i want to up my HELOC), are not going to fix this but just push it off to another date and time
Ok AK49 well noted and I apologize for my assumption.
“Speculating drives up the cost of housing for all future buyers.”
No HD in a perfectly free market the speculators typically either manage their risk well or go out of business. But here in the good ol’ USSA Uncle Sam rushed to their rescue in 2008.
“I completely stand by my statement that market participants make the market more efficient. Stability is a sign of efficiency.”
I agree completely and thanks for the explanation. I’d rather see the banks puke and die personally, but I guess its more of a personal preference.
Hey HD, a quick question:
In a short sale scenario, the debt forgiveness is taxable as regular income and the lenders report it to the IRS with a form 1099C. Let’s say someone has a $70,000 sale price gap (debt forgiveness), then how in the world is the IRS expecting people with no net worth in many cases to pay those taxes??!!
The law was changed in 2007. From the IRS website:
“Update Dec. 11, 2008 — The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualify for this relief.
This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion doesn’t apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.
The amount excluded reduces the taxpayer’s cost basis in the home.”
Bob – I completely understand that when you see someone post something bullish for the housing market, you might be sceptical of their personal interests. I’m actually the exact same way. I’m always suspicious that someone may be a realtor on here talking up there own listing and I appreciate when they actually admit that it’s theirs. But I’m not so naive to think that I could effect the chicago housing market with my comments. Rest assured, I’m no RE guru. The very little knowledge I have of RE comes from reading posts on this site over the past 6 months.
Thanks Sabrina.
“The very little knowledge I have of RE comes from reading posts on this site over the past 6 months”
so true brother, so true, i have learned more from this site than the surreal life experience i went through when i bought my place.
Hi, I just discovered this site a few months ago and have become addicted. It’s been my education on good values for real estate in Chicago. I’d like to pose a question. Do you think I could find a solid 2 bed/2 bath condo for under $200k in a nice area (downtown, west loop, wicker park, etc) that is a preforeclosure? I’m not thinking about right now, but let’s say Sept 2010. Any advice would be much appreciated.