Want to be a Landlord? A 2-Flat on a Double Lot at 2726 N. Mozart in Logan Square
This vintage 2-flat at 2726 N. Mozart in Logan Square came on the market in August 2020.
Built in 1896, this 2-flat is on a double lot measuring 60×125. It also has a masonry 2-car garage.
The house has some of its original features including wood work and stained glass.
The first floor is a 2 bedroom, 1 bath unit with a south facing porch.
It has washer/dryer in the unit but no central air.
There isn’t a picture of the kitchen.
The second and third floor is a 3 bedroom, 3 bath duplex up unit with central air and washer/dryer in the unit.
It has skylights and a primary bedroom with en suite bathroom.
The duplex unit also has built-in bookcases and a fireplace in the living room.
It’s kitchen has wood cabinets, an island and stainless steel appliances.
Each unit pays electric and gas.
There’s an unfinished basement.
Here are the rents:
- Unit #1: $1,700 a month
- Unit #2: $3,000 a month
Logan Square is one of the hottest neighborhoods in the city.
This property is on a rare double lot.
It has come on the market at $1.299 million.
Will a buyer live in the duplex up and rent out the other or will someone convert it into a single family home?
Stephen Schneider at Corcoran Urban Real Estate has the listing. See the pictures and floor plan here.
2726 N. Mozart: 5 bedrooms, 4 baths, 2-flat
- Sold in May 2005 for $775,000 (per Redfin as the CCRD was down)
- Originally listed in August 2020 for $1.299 million
- Currently still listed at $1.299 million
- Taxes of $12,967
- Double lot of 60×125
- 2-car garage
- Unit #1: 2 bedrooms, 1 bath rented at $1700 a month
- Unit #2: 3 bedrooms, 3 baths, duplex up, rented at $3000 a month
- Washer/dryers in the units
- Full, unfinished basement
- Fireplace
Realator is really mailing it in on a 1.3MM property
Being on the market for 40 Days would tend disprove the HAWT-ness ™ of LS
Nice that the assessor thinks this is worth $677k, must be connected The increase in prop taxes is just about going to negate the 1st fl rental income. I dont see a large ground swell of folks looking to put down $260k + 6k mo who want to be a landlord. Not sure what the Raw land is worth, but even selling it is going to keep this property a shooting range of $1MM.
As for SFH conversion, Minimum $300k and probably closer to $500k to match finishes to the price point
Price makes no sense if the intent is to maintain it as a rental. A combination of the following has to occur for anyone who doesn’t intend to convert this to a SFH (and that would still require lowering the price since that will require some work)
1. Lower price by $200K
2. Increase Rent on whichever unit stays a rental (this looks like owner occupied property to me given the below market rents…. that or they hit the jackpot with their tenants keeping everything neat and clean. For argument’s sake, lets say the 1st floor rental unit stays a rental unit. Rent needs to increase at least $300/mo (maybe even $500).
Taxes will be reassessed upon sale and will increase at least $600 a month (or should if the world were remotely fair).
3. After P&I, taxes, insurance, at least $2K income from the first floor unit, negotiating the price down $200K, locking up a huge $220K down-payment, if you plan to occupy the duplex up unit, think of it as paying yourself rent: $3,600/ month.
This makes no sense as a rental from a numbers perspective for anyone other than the current owner.
I don’t know what these schools are like but something tells me if you can afford to privately educate your kid at this location, you definitely don’t have time to be a small time landlord. The income from the first floor unit just wouldn’t be worth the headache and this becomes a single family home that is a little over priced even for hawt Logan Square. 40 days on the market for a SFH is very telling – – they are flying off the shelves in other neighborhoods.
“Nice that the assessor thinks this is worth $677k, must be connected”
Nah, above-average quality 2-flats are systematically underassessed.
2018 re-ass was at $90,002, and they won an assessor appeal (to $76k) AND a BOR appeal (to $70k). Then appealed again and got the further reduction from the BOR to the current amount.
As I’ve suggested before, system should include a right for any 3d party to buy at forced sale at 125% of AV when there is an appeal. They think it is only worth $677k, I should be able to buy it for $846k. Rule applies to commercial buildings, too. That shuts down the tax appeal BS.
“As I’ve suggested before, system should include a right for any 3d party to buy at forced sale at 125% of AV when there is an appeal. They think it is only worth $677k, I should be able to buy it for $846k. Rule applies to commercial buildings, too. That shuts down the tax appeal BS.”
I dont think Gov Fat Bastard and Madigan would approve
Great idea tho
I would get behind anything between 115% and 130%.
And it’s only triggered if you appeal–which means you better be damn sure you’ve been over-assessed by an actually unfair amount (national consensus is that “fair assessment” means 90%-110% of actual FMV). If you are underassessed just due to the Assessor being a moron, no risk to you.
@anon (tfo) – – I really like this idea.
I agree that anon (tfo)’s idea is interesting. Two problems though. First, if someone is over-assessed, they might be afraid to appeal because someone could then buy their property out from under them. That gives too much power to the assessor which, ironically, could result in more over-assessments. Second, I could see a situation where a politically connected person convinces the assessor to intentionally over-assess property sought by the connected person. The owner would appeal, the assessor would cut the AV in half, and the connected person would be the first in line to pick it up for a song.
Even with these issues, it still beats the current system.
“As I’ve suggested before, system should include a right for any 3d party to buy at forced sale at 125% of AV when there is an appeal.”
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So, lemme get this straight: If the government failed to properly do its job and I protest the action by appealing, then I can be compelled to sell my property and endure the concomitant disruption to my life and family.
You idiots don’t think very much, or even in advance, do you?
As a two-flat owner myself I have to agree with The Cat’s analysis. Acquisition price is too high, rents are too low, and taxes will be too high. I immediately stopped myself from doing a cap-rate calculation as soon as I saw the rents because I knew it would be pathetically low. It’s too expensive and upgraded for any value add or to spend on deconverting to single family. Perhaps splitting up the duplex down into two units — creating a garden unit — would probably net you an extra ~$300-400/month. Again, probably not worth the trouble of getting an upzone and zoning fairy lawyer involved.
Johnc – I’m glad I’m not the only one who sees the insanity and potential abuse in that “forced sale at 125% of AV” – I consider myself pretty liberal politically and I want fairer property taxes but damn, implementing a system like that would be a gross overreach.
oh, I forgot about the last part of it:
You can avoid the sale by agreeing the the FMV of your property is that 125% amount, with no right to appeal before the next reassessment.
as to this concern:
“The owner would appeal, the assessor would cut the AV in half”
that gets fixed (partly) by the Owner stating what they believe FMV to be, and the Assessor is not allowed to go lower than that number.
And everyone has to keep in mind that, in Cook County, if every property is assessed at 150% of FMV or at 50% of FMV, the taxes are still being fairly allocated. The unfairness comes from 90% of properties being valued at 90% of FMV, and the other 10% at 50% of FMV.
It should be all about everyone being fairly assessed.
@anon (tfo) – reasonable tweaks to address potential problems. Nice.
This one presses all the right vintage buttons for me. Love it inside and out. Not crazy about trying to be a landlord, however.
I’d rather kick out the tenants and make it a SFH. Not that I need all the space, of course.
“oh, I forgot about the last part of it:
You can avoid the sale by agreeing the the FMV of your property is that 125% amount, with no right to appeal before the next reassessment.
as to this concern:
“The owner would appeal, the assessor would cut the AV in half”
that gets fixed (partly) by the Owner stating what they believe FMV to be, and the Assessor is not allowed to go lower than that number.”
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More idiot babble. You are still punishing the homeowner for challenging the government. The entire philosophical premise of your scheme is wrong. Full Stop.
Then there’s the small matter of a lay person setting the floor for the value, and not trained professionals. Again, your premise is wrong.
Your issue comes from an unprofessional and politicized system. That is what needs to be addressed. Do the hard work of solving those issues and stop advancing schemes that prey on innocent citizens and outsiders.
@johnc – serious question, putting aside the proposal, why not make a property owner state what they think their property is worth in an appeal? We pretty much require that now because an appeal usually contains an appraisal from someone hired by the property owner. If you don’t come in with some statement and evidence about what the property is worth, your appeal is going nowhere.
So the current system pits lay people against experts. That’s why lay people hire lawyers and appraisers. I completely agree that it is far preferable to have a professional, non-political process based on objective evidence. Unfortunately, that’s simply not achievable on any level of government – county, state or federal (unless you want to change the constitution to allow campaign finance reform).
That’s why the propasal by anon (tfo) has merit. It uses incentives to control the worst excesses of the system. It is far from perfect, but these kind of self-regulating systems can produce results.
“Throw the bums out” – which I assume is what you are advocating for – is a popular refrain that literally everybody can get behind. In reality, it rarely works because you replace one set of bums with another, the latter who just bestows favor on a different group. The system needs to be set up to prevent favoritism. We should be discussing any solution that might make the system fairer to all.
Matt:
The first thing to do is determine whether there is a problem.
The second thing to do is to determine the nature of the problem.
The third thing to do is to determine the context of the problem.
The fourth thing to do is to determine a solution that addresses the nature and context of the problem and is not side tracked by irrelevancies.
With that in mind, let’s look at the question of property tax valuation appeals.
1. Are the number of frivolous appeals great enough to rise to the level of actually being a problem?
2. Is the nature of the problem the fact there there is a large number of frivolous appeals, or is it in fact the reaction of the assessor’s office to each appeal?
3. Context:
Berrios systemically undervalued commercial property and expensive residential property. Now I have no doubt that Berrios thought he was doing the Lord’s work for Cook County in acting that way. He encouraged commerce and rich people (who consume fewer government services and give more resources to the government than the poor) and discouraged poor people, encouraging them to move away (vice cersa).
Berrios systemically used improper valuation methods (e.g. Zillow) within his framework of valuation biases to determine values.
Given that not all properties are re-assessed at once, properties that are re-valued earlier are at a competitive disadvantage to those re-assessed later, when correct, unbiased, valuations are introduced.
Punishing people for exercising their rights is not an option.
Values must be determined professionally, and not set/influenced by lay people.
Appraisers are professionals, not lay people.
Stating that the assessor’s office must be professionalized and unpolitical is not “throw the bums out.”
4. The problem is not that people are filing appeals, and any solution should not involve a landowner gambling with his rights. Any consequences have to be proportionate to the issue involved. “Forced sales” to a one-in-a-million buyer is not proportionate.
5. The problem is that the assessor’s office’s reaction to challenges reflects the culture of the office and the untrained, un-professional, nature of the rank and file assessors.
6. As the biases of the Berrios system are removed and properties re-assessed, the competitive dis-advantage of early-assessed properties will disappear.
7. I liken the process of routinely challenging assessments to the reaction of a 19th century western state judge when a man was sued by a woman when he solicited her for sex: “There’s no harm in asking.”
@johnc – thank you for a thoughtful and reasoned response.
I will take issue with one point – that people should be able to challenge as of basic right without consequence. Allow me to give you an example: if you get arrested, you have a very clear constitutional right to challenge the charges – you can make the State prove its elements. But if you do, there will be greater punishment than if you plea bargain or plead guilty. So why should money have greater rights than loteral physical freedom?
If Barrios thought he was doing the Lord’s work, then he must have thought Burke was God. That seems like an awful religion to me.
Ah yes, the “jury tax.”
The problem with your comparison is that criminal violations involve violating the law, and there are explicit penalties for violations. There’s no law that says you have a right to appeal assessments, but only if you win. Therefore you seek to punish people for the mere exercise of lawful rights. Not an option my dear boy, not an option.
Finally, where do you fit discretion into your system, particularly without opening yourself up to a charge of favoritism/clout/politics/etc.? Let me give you an example: In every state that I have driven in (and I just got back from the East Coast), the state police will NOT pull you over for speeding if you are doing less than 80 mph. Even on a 55mph section of interstate, if you are doing less than 80, the lights do NOT come on.
Where, and how, does such forebearance (sp) fit into your system? How do you apply a fundamentally different issue (one does not have a right to perform criminal acts) to the exercise of lawful civil challenge?
So first things first — are there so many demonstratively “frivolous” appeals as to be a problem?
“the state police will NOT pull you over for speeding if you are doing less than 80 mph.”
Should read “the state police will NOT pull you over for speeding on the interstate if you are doing less than 80 mph.”
Discretion is always going to be part of the system, especially with real estate. For at least 500 years, we have believed that every piece of real estate is unique. There simply will never be a formula that you can just plug in and spit out a result.
Discretion leads to opportunitiesfor mischief. In your example, the cops have a uniform rule. That’s not an example of discretion.
Money in politics is going to cause those in power with discretion to exercise it in favor of their donors. So what’s the solution? I ask that seriously because the current system is failing everyone. Just because Barrios is gone, you can’t assume things are going to get better.
I admire the creativity of anon (tfo)’s solution for the primary reason that it creates risk for the person challenging the assessment. All solutions come with their own trade-offs. For example, there are people who have proposed shifting our civil litigation system to a loser pays model. There is little doubt this would reduce frivolous lawsuits. But it would take out some suits that had merit, but were too risky.
So the question boils down to what are our priorities when fixing the system. Anon (tfo)’s solution is clear that the priority is reducing the incentive to appeal at the potential expense of legitimate challenges. I’d love to understand what balance you’d strike.
In copying and pasting the following I make some un-noted removals. I believe them to be irrelevant to the gist of Matt’s response.
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we have believed that every piece of real estate is unique. There simply will never be a formula that you can just plug in and spit out a result.
Discretion leads to opportunities for mischief. In your example, the cops have a uniform rule. That’s not an example of discretion.
I admire the creativity of anon (tfo)’s solution for the primary reason that it creates risk for the person challenging the assessment.
So the question boils down to what are our priorities when fixing the system. Anon (tfo)’s solution is clear that the priority is reducing the incentive to appeal at the potential expense of legitimate challenges. I’d love to understand what balance you’d strike.
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First of all, you ignore the question of proportionality. If we can never just “spit out a result” then you risk being forced to sell simply because some clown irrationally thinks your house is valuable when all you did was contest an assessment. You also ignore my question: Where is the harm in appealing assessed valuations? Sounds to me that you have a draconian solution in search of a problem.
Second, the police are exercising discretion — they have simply uniformly concluded that ticketing interstate speeders under 80 mph isn’t worth the effort.
Third, what is the point of “creating risk” for those challenging assessments? Like I said, you seek to punish people for exercising their lawful rights. Nice try, but your entire philosophy is wrong.
So go back to my prior post and go through it step by step: What makes you think there is a problem to begin with?
“the state police will NOT pull you over for speeding if you are doing less than 80 mph. Even on a 55mph section of interstate, if you are doing less than 80, the lights do NOT come on.”
Ever driven on the Eisenhower?
A few years ago, I was pulled over for going 63. But she didn’t pull me over because I was speeding (she claimed I was going 70), it was because my car was old and she wanted to see if I had insurance.
They were pulling over every old car. Lol.
This was a thing a few years ago.
If you don’t have insurance, it’s a $500 ticket, I believe (maybe even more.)
Once she found out I had insurance and I had no violations on my record, she let me go with a “warning.”
@johnc – there is a problem with commercial and industrial property assessments as covered by the Tribune, Pro Publica, and other organizations. I’d also suggest that you look at the July 2, 2020 Washington Post article, covering studies that show black homeowners in Chicago and Cook County are significantly over assessed compared to white owned properties. I could go on, but the problem is well documented.
And this property is a good example – the last sale was in 2005 at 775k. Using the average residential rate, taxes should be about 14k. Not only are the taxes under that, everyone knows that Logan Square has seen massive appreciation in the past 15 years. So not only are the taxes under, the AV hasn’t been adjusted.
“@johnc – there is a problem with commercial and industrial property assessments as covered by the Tribune, Pro Publica, and other organizations. I’d also suggest that you look at the July 2, 2020 Washington Post article, covering studies that show black homeowners in Chicago and Cook County are significantly over assessed compared to white owned properties. I could go on, but the problem is well documented.
And this property is a good example – the last sale was in 2005 at 775k. Using the average residential rate, taxes should be about 14k. Not only are the taxes under that, everyone knows that Logan Square has seen massive appreciation in the past 15 years. So not only are the taxes under, the AV hasn’t been adjusted.”
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All of which is irrelevant to the question of trying to punish people for appealing assessments.
@johnc – I appreciated discussion we were having, but I have to end this. Your literal last question to me “What makes you think there is a problem to begin with?” I answered it. Rather than agree or disagree, you moved onto a different point, one which I also previously covered at length.
Look, this was never meant to be a competition where one side would win, but a discussion to find common ground. If you can’t even agree on the basic premise, after demanding and receiving proof there is a problem, there’s not a lot of point in continuing this.
Hold on, Matt, I asked what made people think that frivolous appeals were so extensive as to be a problem. Nobody ever answered that question.
If they did, I missed it, but no one has every shown, I believe, that such appeals were so extensive as to be a real problem.
Makes sense that johnc is a property tax appeals lawyer.
“Makes sense that johnc is a property tax appeals lawyer.”
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Nope.