2-Flat Short Sale: Do the numbers really work? 710 W. Melrose in Lakeview
Many of you are interested in investing in multi-unit buildings with the hope that you can cover your costs by renting out the units.
This new construction 2-flat at 710 W. Melrose in Lakeview claims that if you “do the math” the “numbers really work!”
Do they?
Both units are 3-bedroom, 3-bath duplexes. Both are on the market as rentals for $3500 a month.
Top Realty Group LLC has the listing. See the few pictures here.
Here’s the history:
710 W. Melrose: 6 bedrooms, 6 baths, 2-units, both duplexes, 2 car parking
- Sold in January 2006 for $700,000
- Currently listed in a “short sale” for $1.2 million
- Lis pendens filed on December 12, 2008
- Taxes of $3,339
- Both units available to rent for $3500 each
- New construction
- Listing tells investors to not “miss this armchair opportunity of a lifetime”
Interesting. If you could get $3500/month on the rentals then it would work out to an ROI of more than 6.1%. You could certainly get this at much less than 1.2MM so the return would be higher. However, taxes are really low so they are likely to go way up and the return would be lower. Depends upon the financing you could get.
30 day delivery on the rentals – must not be completed? No interior pictures is always a red flag for me. And if the rentals are on the market at 3500 then why does the sale listing show the market value of the rentals at 3600? Minor glitch perhaps.
WTF – these very units are for rent on Craigslist for $3,295 with free $100.00 gift card (let’s hope it’s not for Circuit City).
http://chicago.craigslist.org/chc/apa/982992238.html
Look at the pictures, it’s the same building.
$7,200 a month income my a$$.
HD nice catch, and they are tough to rent with no appliances. THis guy is going down. Wait a year, it will be $700K after the bank takes it.
HD: Thanks for posting the link to the rental ad.
Interesting that they were available as far back as November.
This is what I’ve been saying. Why does everyone assume that if they try and rent out units that they will “instantly” rent and money will start rolling in? They’ve been trying to rent these units for 3 months.
Granted- they’re on the more expensive side- but they’re still 3 bedroom/3 bath and brand new (though the lack of appliances in the pictures is a bit scary if you’re a renter.)
Clearly this guy deserves a $500k profit (over 2006 prices!) after looting all the appliances from the place.
Anyone who can afford 3500/month in rent can afford an 700k property.
Most people in the 3/3 segment would rather own than rent is my guess.
HD, gold star for most hilarious cross-check of the week.
This is an amazing location and I’m a big fan of duplexes. It’s always nice to have bedrooms on a separate floor from your main living space. However, as everyone has pointed out, the rent expectations here are too high. There just aren’t that many people in Chicago who can spend 3500 a month on rent…and those who can have a lot of options. I would be willing to rent one of these places for 2500/month (assuming there were nice appliances included). So, I’d consider buying the building if, after renting out one of the units for 2500, I was left paying about 2500 of the mortgage myself while living in the other unit. However, I’m sure there’s someone out there who won’t be so hung up on cash flow and will just buy it because they think it’s a bargain and they assume it’ll appreciate dramatically when the market recovers.
$3500 a month is nowhere near the return on investment anyone sane would need for $1.2M. Given the current taxes, liability insurance, and maintenance fees we’re probably talking ROI of 2-3% with a 100% cash purchase. With 20% down, you’re not even cash flow positive.
Strictly as an investment, this would only become attractive in the 500-600k range — and I wouldn’t even pay that much. I have a rental in another market that pulls in more than 3500 and paid less than 360k.
The Chicago market is still irrational.
So was just the lot or the building sold in 2006 for 700k? I’m guessing the lot (maybe a teardown house too), otherwise this dude is nuts for attempting to get a 500k profit.
The bank is taking this one back. This loser has an outstanding loan balance of $1.4MM and a bunch of contractors liens. Do the math, but I wouldn’t purchase this thing unless it had a 6%+ cash-on-cash return day 1 using conservative rent assumptions. On an investment property like this you are probably looking at a 7.5%+ rate (with the mandatory 20% down).
Maybe someone can help explain – why wouldn’t this person try to sell the two duplexs seperately? I think he could get a lot closer to his asking price if he looked for two seperate buyers.
this is a new construction building. the guy bought whatever was on the lot and tore it down back on ’06. originally these units were listed at $800k each i think. i’m surprised he’s not listing these at condos for $600k/each. i would think that would sell easier than $1.2mln for the whole building.
“So was just the lot or the building sold in 2006 for 700k? I’m guessing the lot (maybe a teardown house too), otherwise this dude is nuts for attempting to get a 500k profit.”
Google Earth shows the place under construction (walls up, studs showing) in 2007. I think $500k is barely construction costs for this one (although maybe there’s enough $$ in that $1.2 to pay for appliances).
“why wouldn’t this person try to sell the two duplexs seperately?”
Probably didn’t do a condo declaration.
For $3500/month, I can rent a nicer 3BR place in Lakeshore East or some other super-convenient-to-the-Loop location.
The market for $3500/month rentals is probably larger than many here would have guessed, but outside of actual detached homes I don’t think it exists all the way up in Lakeview.
No way do these two units rent fast for big bucks.
“The market for $3500/month rentals is probably larger than many here would have guessed, but outside of actual detached homes I don’t think it exists all the way up in Lakeview.”
Middle aged gay men who need to be near sidetrack.
****“why wouldn’t this person try to sell the two duplexs seperately?”
Probably didn’t do a condo declaration.****
The two duplex units had been on the market separately over the summer. I believe this developer also has at least two projects in WP/Bucktown that haven’t sold as well.
Here’s a pic of the teardown that was purchased in 2006:
http://www.cookcountyassessor.com/data/searchflat//ParcelImage.asp?pin=14213110410000
The units were listed seperately several times while bldg was under construction for various prices between $749K-$899K each. It doesn’t appear a condo division was completed since the assessor has it as a class 2-97, which typically denotes the point when a proposed condo has a new underlying PIN but no unit PINs yet.
nd,
that is a market, just not a huge one…
These rents are definately too high, this is also a young neighboorhood, and my guess is why spend $1200 a month to live with three people, when there are any number of places you could live on your own for $1200 a month for several blocks in either direction
Also this thing barely squeks by at 7K in rents at 1.2
This is in the heart of boystown = 20% discount at least, so maybe worth $1mm in current condition in other location but in that are it is $800k.
I could have rented a single family on Burling last year for $3500, an older SF but decent, $3500/rent on these is smoking dope, prob $2500 is doable.
Evidently, Nd & KP are not middle aged and/or gay men. I am both. And, therefore, feel compelled to set the record straight, so to speak. Most well-educated middle aged gay men, single or partnered, and fortunate enought to be considered well-off, have no interest in Side Track (or being some twink’s sugar-daddy, for that matter).
I, along with most of my friends, choose to own in Streeterville; River East; River North; and/or the Loop. No one I know would be caught dead living on W. Melrose. At least in my social circle, anyway.
So, please Nd & KP, refrain from making offensive incorrect stereotypes about middle aged gay men.
Luke, your post was fine until:
“No one I know would be caught dead living on W. Melrose. At least in my social circle, anyway.”
You just reinforced the most irritating stereotype of gay men (middle aged or otherwise) that there could be… the endless need to feel superior to others because the straight boys didn’t like you in high school. And just for that comment, I felt the need to dig and ask you to guess who owned this place I happened to view at 508 melrose?
http://www.urbanrealestate.com/property/508-W-Melrose-St-Unit-5D-CHICAGO-IL-60657-T6FGTKCUDSF4S.html
It was owned by 2 middle aged gay men. Stereotypes are right sometimes. Also, for those of “us” (though I use that term loosely since you wouldn’t be caught dead in my neighborhood) who prefer the sight of trees over the sound of endless ambulence sirens, “Streeterville; River East; River North; and/or the Loop” don’t work out very well.
And finally, as far as “offensive and incorrect stereotypes” about people are concerned, you should know that I (with my Ivy League BA and MA) will be hanging out tonight at side track with some retail queens who didn’t finish high school & I can’t wait. Glad I won’t be seeing your social circle there!
Hahahaha, way better response, SuperGay, than I could come up with!! know a lot of middle aged, well educated, upper middle class gay men who live in East Lake View and go to sidetrack, but most of them live further north.
Though I was going to apply this;
“that is a market, just not a huge one…” applies to Luke as well.
I had to look up the definition of ‘twink.’
Blond outside…..
(though now is applies to pretty 20 somethings in general, unless they fall into the ethnic group “club kid”)
I go for lunch and what the hell happened here. Rare to hear terms I never heard of before.. ROFLMAO!!!
You go girls!!!!!
retail queens… LOL
Best thread ever.
Ah, finally! A gay-themed conversation/catfight to baffle the regular straight commenters on here. If I had to read one more volley of econ stats analysis and hear about the impact of ARM resets and Fed rate cuts on GDP and inflation, I was going to lose my mind.
What we really should be discussing on here is why middle-aged gay men feel the need to decorate their homes in granny-chic. I keep seeing this everywhere…lots of fringe and tassels and gold-toned fabrics with sateen paisley/damask patterns covering every window and chair…or some burgundy explosion with 500 pillows on every bed. I get it. 40-something gay men like expensive fabrics. But there’s a difference between a place that looks expensive and hip and a place that looks like a Kirlkand’s/Bombay Company showroom.
This thread is so fabulous I don’t know where to start.
I stand by my earlier comment. I was not trying to be a snob or superior.
I simply wanted to quash the anti-gay and anti-age comments made here.
The point in my earlier email, albeit made with some ire, was that most well-educated and well-off middle aged gay men do not make investments—real estate or otherwise— based on their
sexual orientation and/ or proximity to a gay bar.
For nd & kp to suggest this was, well, very offensive, if not completely stupid.
That you, super[SILLY]gay, condone their rhetoric while castigating me reveals more about you then me (which you got wrong on all fronts: I was very admired both academically and athletically in
high school and why I earned an academic and athletic scholarship to a prestigious university, which got me into graduate school, and then a high-paying career; I earned all of it).
BTW: Ours is a free country. You may imbibe anywhere you please. Just do not purport–- for the straights here– that I am the mean elitist when you praise one of the most snobbish
gay bars in the city (and why I choose not to frequent it).
As for my social circle, it is not comprised of all gay men. In fact, many are straights of all ages and income levels. So, don’t hate me because I opt to “mainstream” and you probably can’t. Clearly, that’s your issue (that came out in your last comment).
My snide remark about W. Melrose was said for 2 reasons:
1. I am way past being tired of developers constructing UGLY buildings in “Boystown” and thinking gay men will come calling with money in hand because its in Boystown; and
2. When I said I wouldn’t be caught dead on W.Melrose is not because it’s “inferior,” but because too many of my lesbian and gay friends re-gentrified pockets of Lakeview (i.e., “Boystown”) to then have straight married couples (with ot w/out kids) move next door and complain that “the gay lifestyle” was an affront to their “family values.”
“So, don’t hate me because I opt to “mainstream” and you probably can’t.”
Sounds like a bitter closet case to me.
Luke,
I am not sympathetic to your lifestyle. I am all for the straights moving in and gentrifying the fabulous areas and making them more family friendly.
Lakeview was not always a bastion for this alternative lifestyle, so if we can move it further north to Uptown, or better yet export it to Schaumburg, that would be ideal.
Bob:
Quit being an a$$hole.
I’m all for gay folks running up property values in a run-down ‘hood, then cashing out and moving to a new cheap neighborhood and doing it all over again. Not sure I can get behind an eventual exodus to Schaumburg, though. We gays are a proud people, and we have an aversion to vinyl siding.
Obviously there are strong feelings on both sides and we won’t agree on everything. But I’m sure we can all agree on the really important issues–like the fact that no one under 60 should own a curio cabinet.
as this is america, green should be the only color/lifestyle that matters….that being said, let’s get back to the issue at hand….
you could buy a GE bond yielding 7% today.
Doing the math for this property, you will (very, very, very optimistically) may a 7% return on this property as well.
So which would you rather have…..a 7% yield on a bond that can be liquidated on any business day or a 7% yield on an illiquid asset with high transaction costs?
IMHO we are still in a landlord bubble with too many rentals chasing too few tenants at all price levels. As always YMMV.
Damn, I thought me and my pot smoking went off topic for this site.
Danny, your post above about the pillows and shit had me rolling. You do of course realize 95% of straight men have no freaking idea what the hell a curio cabinet is. I had to Google that shit, and then I found out I actually have one. Black leather couch.. TV… 1 painting on the wall is about as far as we can figure out. I went to a wife’s friends apartment once and it looked like the freaking Ralph Lauren store. I give you guys serious credit for how you do that.
So I guess soon we will be hearing opinions about how Sabrina should use different shades of blue on the sidebars to really liven up the site???
Oh, I’d never chastise Sabrina for anything. She’s far too powerful and if I were forbidden from commenting on this site, a part of me would die. Plus I think when in doubt, keeping things simple is always a wise approach. I don’t mind bland design. It’s the stuff that requires a lot of time and money and STILL looks awful that I like to make fun of. Bachelor pad decor is at least practical and functional. All you need is a bit of furniture from The Room Place (or if you’re from the South like I am, Rooms to Go) and a giant TV and you’re good to go. At least a foosball table in the dining room makes people smile.
Ok so now I found a source for problems. Help me on this one. Just redid my vestibule ceiling literally today. It is about 6ft by 6ft and I had a fire sprinkler I couldn’t move without jumping through hurdles with the bldg, fire dept, etc. So basically I brought the ceiling out about 10 inches and then up about the same and made the rest of the ceiling the same height. Didn’t want to go up so much but i needed to make a little hidden door that i want to centralize my electronics runs throughout the apt from.
So question is. Do I use 1 3-4″ diameter recess light centered in the ceiling or 4 of those real smallish pinpoint lights?
Oh and all white. Everything I do is pretty much always all white (not counting the affinity for latin girls of course) 🙂
“Do I use 1 3-4? diameter recess light centered in the ceiling or 4 of those real smallish pinpoint lights?”
Use more than one of whatever. One can will make it look like a crappy alcove in a Class-C office building. Or a Super 8. Not sure which.
Ok I’m sorry Luke. You have to admit the end of your first post sounded pretentious…I couldn’t possibly read all that subtext. So, I agree with you on your points about Melrose actually and will elaborate below.
But, now you have brought up this “mainstream” thing. Not like it should matter, but I spent like 7 years living in Old Town with all my straight friends who finally decided their eggs were drying up and required fertilization by the nearest male making a respectable salary (and I was forced to spend many hours on the phone with them through consternation as they sold their vagines for less than their mothers did many years ago – net of inflation). I felt the need to leave for grad school and make gay friends for the first time in my life (they weren’t so bad – I learned how to straighten my hair chemically and via ceramic iron). When I came back, I left the pregnant/lactating females alone (as one is advised to do in a pet store). So, that is my history now that you have shared some insight into your own. I was (gasp) mainstream for a while there…and I am even an unwilling “uncle” to a small cadre of trixie-babies. So what does it mean that I can’t “opt to be mainstream” anyway? That I would be denied tenancy at Eugenie Terrace for flammability and/or an inability to push open that pesky revolving door due to a limp wrist?
Anyway… aside from my watching my once-close college friends & coworkers openly breastfeeding (and I am talking about the male ones – straight people and their vulgar lifestyle) I realized that gays don’t travel…well, not unless you’re a 10. I am not a 10 – not even online. (I’m an 8×6) And I’m not just talking about proximity for ass (or dick, depending on top/btm) – but the fact my social network was abysmal in Old Town. Am I supposed to hang out at Salon 1800? So, I moved here (post grad school) with a new found appreciation for the homosexual culture.
Unfortunately to my shock and awe, the culture had drastically changed. Shortly after my move, I had a simply terrifying run in with 2 girls, 1 stroller (almost as terrifying as “2 girls 1 cup”) at the Broadway Starbucks. I cannot elaborate on this experience, but I will say that black leggings and a pink tank top are very confusing when worn on genetic females in this neighborhood.
Furthermore, my whole bldg (who a developer lured in because its boystown) is straight. Thanks to this, nobody will agree that we have to repaint the lobby, seal the stone floors, and scrape the bird feces off of the back stairwell. Really people?? I need the gays back in here. I am living with animals (well, their feces). Where are my gays?
And on to that topic then: Bob- the gays have been moving to Uptown, Andersonville, and Rogers Park forever. So, you are getting your way. Now thanks to this “housing crisis” mumbo jumbo, a lot of people are stuck and the gaytrification has ceased. Second, there are tons of gays in Schaumberg…but they’re just married…to women. Seriously, check out “adult friend finder” sometime. (Tip: Don’t use your regular email address to sign up.) You think the window displays on Halsted were freaky Schaumberg is its own den of sexual depravity. (And I’m talking about the windows before you heteros made them take down the full montage of mannequins with positions choreographed by Chi Chi Larue).
What the hell have I just typed? If you were looking for a point, you didn’t miss it. All of you homophiles salivating for entertainment on this blog done egged me on….
Oh PS – Side Track is not that snobby. Minibar and Roscoes are WAY worse.
(PPS – Danny, with your “Granny Chic” comment – might you be a fan of Top Design? Didn’t that Martha Stewart disciple queen drive you NUTS?!)
I need a dictionary. It’s like freakin reading gaybonics.
…and anon thanks. That was my feel too. I just think 2 looks weird in a square (better in a rectangle) so I came up with the 4 real small lights idea.
Sorry Ze. I say – 4 lights over 1… but a diagram or photo would help. But beware, I may recommend upholstering it in leather.
SG,
Do you have a nice blue shirt with a red cape with an SG logo on it?
6’*5’6″ space – 7’6″ up I went out 9 inches all the way around parallel to the floor. Up from there 10 inches (parallel to the wall) then made the ceiling flat (so essentially raised the ceiling 10 inches with the edges (9″) where it used to be. Kind of like if you took a Z and then pulled it to right angles. Thank god I don’t have to explain the living room and hallways. And would 5 be better so there is something in the middle. Weird thing about Rio is no shortage of gay people but they surprisingly seem to have really poor taste. Kind of an oxymoron.
Yes, four lights! One light never really looks right. You could also do a cove with cold cathode lighting (w/o seeing your interior though I can’t help more). You could also use the recessed spots which mount in a black ‘box’ within the ceiling too.
And don’t forget to stop at Hunter’s next time on your way to IKEA. LOL It was like the Castro, all very young and fifty plus guys.
Actually, the trend of the gay community throughout the 20th and through the 21st so far is a shift, slowly and gradually, further north, from Wells Street up through Old Town up Clark to Edgewater and beyond. There’s been a dispersal, due to Chicago’s status as gay mecca, more people being out overall and due to acceptance in other areas (Wicker Park, Jefferson Park, etc), though with the crumbling (collapsing?) economy, I suspect that will change and the ‘gay village’ will re-coalesce into tighter gayborhoods.
.. left out “i had thought” at the end.. sounds weird.
Funny ND.. did the cathode thing around the entire living/dining perimeter. gave 6″ between the side walls and the ceiling ends and then ran an edge up about 4 inches to hide them behind – looks absolutely incredible. Dont even notice the ceiling until you turn the lights on. Couldn’t have been happier with that part. Reversed the design in the hallway and running small recessed lights down the center.
This is the best part of owning in my mind… it’s like a toy.
Oh and SG.. I’ll except any ideas with the exception of chandeliers!!
accept. I am retarted today. weed coming tomorrow so all should be ok. Too bad I can’t post a pic or 2.
What about dropping the center of the ceiling and having a recess around the sides – or would there be an area w/o a cove for pipe access? That IS the fun part about owning is being able to trick out the lighting.
No bob. That’s too hetero. More like a lavender spandex vneck a la Brenda Dickson in “Welcome to My Home” http://www.youtube.com/watch?v=dO65OlAhEJg
Is that… Delta Burke? I think Brini Maxwell would be a good icon for decor advice.
The cape sounds like a Furry kinda thing.
Gov’na is about to speak!
I hope Sabrina does a writeup on his place when he needs to sell. I have a feeling his next career won’t be as lucrative as his current one. (Making license plates pays like $1/day).
ND- That’s what I did in the living/dining and would have done here, but I have a sprinkler in the vestibule ceiling about 4 inches from the damn wall that I can’t move. The hidden door in the part that goes up parallel to the wall does make a nice center wiring access location for me though. I run lots and lots and lots of cables. Saying I am a techno junkie would be an understatement of enormous proportions.
He is talking about healthcare and property tax relief! From watching him it is obvious he doesn’t believe his political career is over.
Will his Mrs be selling it? It looks like a nice place.
Ze – What about a cove only on two walls?
I just catch bits and pieces of it from down here (fortunately) Is this guy really just completely out of his fucking mind delusional? Blago is still governor, Madoff is in his penthouse, Mozillo is at the tanning center. WTF. no laws anymore in that country of yours?????
You hit the nail on the head. Batshyt crazy delusional. His disconnect from reality is a big chasm indeed…a canyon. Guess not everyone needs entheogens like you to live in alternate realities, Ze!
My bet is the fed gov will eventually be selling it for her. Did you see his boat? Marble stairways. This guy should be put in the stocks in Times Square and let SG and friends go to work on him. (yes he is probably not your type, but do it for your country).
Hopefully he will have a few ‘friends’ like SG in the federal penitentiary. Heres to hoping he doesn’t get special treatment and put in isolation. I wonder how many packs of smokes he’ll go for.
Well, ya know, if you invite the President to your wedding he sends you a congratulatory letter, when you do that to Rod Blowdryavitch, you get the letter AND a CONair hairdryer
Ze, it seems you’re already in good hands. I think all the suggestions have been fine. Just FYI, I think you can write in to ApartmentTherapy.com for with these types of questions and get advice from lots of design-savvy folks (gay and straight), but you’ll have to include a photo.
SuperGay, I thought the second season of Top Design was better than the first, but it’s still no Project Runway. I was much more disturbed by Wisit than the Martha guy. Is it just me, or did Wisit sound just like E.T.? Also, if I go to Side Track tonight, will you wear a giant hat or button or something so I can find you? I need to expand my social circle and it’s currently lacking an ivy league alum and retail queens.
I’ve seen only snippets of Burris but he seems to be missing one or two screws also?
Gay.. Ivy Leauge alum.. did someone here go to Yale???
Thanks Danny. Never heard of that site before. Have a wall giving me trouble also so definitely will be going there. I have hundreds of pics as I’ve Been photo documenting the entire gutting/rebuild. Been very entertaining.
Oh my gods! (Any Battlestar Galactica fans in the house?) That “Welcome to My Home” clip was so fabulous I had to post it immediately on my blog, http://www.FrugalFag.com. That’s right…all this time none of you realized you had a celebrity in your midst! Now can someone get me a real job writing for the Red Eye or something? Blogging for three cents a day in Google ad revenue is exhausting.
OK.. Someone said design star… as with when my wife turns that on it’s time for me to leave the room. This is going waaayyyy too far.
Anyone see U6 unemployment figures today… Home prices going down, have to be an idiot to buy, overpriced everything. HELP!!!!!!
Ok – listen up straight people: WTF is up with pimping out a homo of my caliber to “go to work” on ROD BLAGOJEVICH?? And hopefully he has a “a few ‘friends’ like [me] in the federal penitentiary” — um, the only thing I’d be doing is shaving off that Donald Trump hair weave and recommending some plastic and/or craniofacial surgery . And also, don’t presume he wouldn’t like [that which you are suggesting, Ze]. Then what? And finally, just for my own self-consistency, don’t compare me to a “prison top” ok. That is so not the way I like it.
LOL Danny – I forgot Wisit. He was SO bizarre! They actually put him on “The Soup” for when he got kicked off and was singing in that crazy voice. He did sound like ET… Ok so after all the crap about side track, I am not probably even going out tonight! My friend sent me a note saying, “I’m taking you to Jackhammer…” (wha??) which means I am going to bed early. Despite my prolific posts, I actually had sort of a long week so I might be a lame ass this weekend.