Dreaming of Living in One and Renting Out the Other: 1314 W. Cornelia in Lakeview
This vintage brick 2-flat at 1314 W. Cornelia in the Southport neighborhood of Lakeview is strategically located within walking distance of the Southport El stop as well as Southport’s shops and restaurants.
Built in 1910, it also has a large and updated 3-bedroom owners unit which makes it possible to live in your dream unit and use the proceeds from the other rental property to fund the purchase.
The owners unit is a duplex up with a chef’s kitchen complete with a Viking stove and stainless steel appliances. It also has 2.5 baths.
While this is an owners unit, the listing on Redfin also lists the bigger unit as being rented.
The units consist of the following:
- Unit #1: 2 bedrooms, 1 bath, washer/dryer in the unit, rented for $1650 a month
- Unit #2: 3 bedrooms, 2.5 baths, washer/dryer in the unit, rented for $3250 a month
Both units have the original moldings and other vintage features intact.
The listing says it has steam heat but doesn’t mention any central air.
There’s a two car garage.
Does the math work to buy this building to live in the duplex and rent out the second unit?
Jennifer Ames at Coldwell Banker has the listing. Be sure to check out all 22 pictures here.
1314 W. Cornelia: 5 bedrooms, 3.5 baths, 2 car garage, 2-flat
- Sold in June 1997 for $545,000
- Originally listed in October 2009 for $1,059,000
- Currently listed for $1,059,000
- Taxes of $11,963
If you can afford this place, then you should be able to come up with the $19,800 a year so that you don’t have to (1) play landlord, (2) listen to your downstairs tenants, and (3) share your yard. And as for that duplex up (I spot a window A/C unit)… Your friends would be SO impressed!!! They would NEVER guess that you paid a million for that and the place downstairs. Like never ever guess. Ever.
I’d verify that the lease for Unit #2 at $3250 is arms length, legit, and at market rate. Could be dangerous to underwrite based on that rent.
From the listing remarks – “A great alternative to a condo or townhome.”
LOL
Beautiful place, and the duplex-up is gorgeous. But at the rents these units are paying, the price makes no sense.
I can’t imagine that many people who are able to afford a $1M + building would want to deal with tenants, walk up those stairs, deal with window A/C units, have neighbors breathing down your neck, etc.
Who is the target buyer? If I had $1M to spend, I would want space and beauty. There are any number of SFH’s in the City and Suburbs that I would chose before this.
does not compute
That price is pretty absurd. Inflation adjusting $545,000 in 1997 to 2009ish, that’s about $730,000. What could possibly justify a 50% price premium?
It’s land value people.
This is a great street and has seen two 2-flats in the 1200 block sell in the last year or so (1248 I think is currently under contract, but can’t find it now, and 1230 sold for $735K in May-09). I went through 1248 and 1230 and both were in need of a total gut and both are only 2 stories above grade. Although, I believe both were also on 30′ wide lots. We seriously considered 1248 to convert to a single family, but the amount of work that was needed was so extensive that it ultimately grew out of price range and the requirements for a construction loan have become quite a challenge. Based on the fact that 1230 sold for $735 and was in terrible shape and only 2 stories, this price may not be too far out of whack. I wouldn’t be surprised to see it sell for mid-900’s, which would be ~15% below current asking. I agree that it makes no sense as an investment property, but perhaps you live upstairs for a while and rent out the first floor, come up with plans to convert to a single family and then do the work piecemeal over a few years. This would eliminate the hassle of a contruction loan if you could pay cash for the modifications. One of the biggest issues for me in these types of buidlings is the lack of ductwork/AC and very low ceiling heights in the basement. Those two things are surprisingly expensive to rectify.
1230 W Cornelia – My guess is this will be converted to a single family.
http://chicago.blockshopper.com/news/story/500034941-Investment_management_firm_partner_buys_in_Lake_View
‘I agree that it makes no sense as an investment property, but perhaps you live upstairs for a while and rent out the first floor, come up with plans to convert to a single family and then do the work piecemeal over a few years. This would eliminate the hassle of a contruction loan if you could pay cash for the modifications.’
But why pay the premium for the semi-fantastic (window units for A/C is a big fail) owner’s unit when you plan on gutting it out anyway?
And there are cheaper options for the land value around here, for sure.
I like this property, but the price seems a bit rich for a 2 unit. I guess the larger question is what does a large duplex up 3/2.5 bath go for in the neighborhood? Then I would want to know what a 2/1 goes for. Knowing this could help us get to the appropriate pricing. Figure $550-$600k for the owner’s unit? So are we to believe that the 2/1 is worth $400-$450k? That certainly doesn’t cash flow with $1650 in rent.
Friends of mine bought a 4 unit building (4x 2/1), 2 story (2 front, 2 back units) in this same neighborhood in summer 2007 for $975k. Assuming they overpaid (given the date) I don’t see how this building with fewer units, bedrooms, and baths can possible be worth more than $800k.
A million dollars! I can’t help but think some people in Chicago look sight of how much money a million dollars is. A nice (not beautiful) place in a good (not great) neighborhood is worth a million dollars? I’m sorry, I don’t see it.
lose* sight, not look sight.
“But why pay the premium for the semi-fantastic (window units for A/C is a big fail) owner’s unit when you plan on gutting it out anyway?”
I tend to agree – it would make more sense to buy a place that hasn’t been updated if you’re going to do major work. The counter that I’m dealing with is my better half is open to the idea of converting a multi-family to a single family but has no interest in living like a 22 year old in a run down unit while the work is on-going. As a serious question, is it unreasonable to think that you could salvage some of the upgrades in the owners unit (floors look decent, appliances, layout of bedrooms/bathrooms on top floor could remain untouched, staircase, I’m sure I’m missing others). This is all predicated on the idea that you want to do the work over time without a construction loan. For my tastes, the building has great curb appeal and is on a desireable street. I know others on this site are not fans of the Southport area, but I fall into the other camp and being in Blaine school district is a big plus both personally and for resale.
LOL. Paying anything above the rental value is speculative. The rents already figure in the value of the location/school. How sellers can find buyers for anything with this cash flow at near this price is ridiculous. I guess the realtors and their shills haven’t worked through all those with only half a brain yet. They will eventually run out of bagholders.
“A nice (not beautiful) place in a good (not great) neighborhood is worth a million dollars? I’m sorry, I don’t see it.”
I know it’s a relational term, but I don’t see how you could consider this anything less than a great neighborhood.
“I can’t help but think some people in Chicago look sight of how much money a million dollars is.”
Completely agree. These same people – in my experience – leave early when the check comes or argue that they had one less drink than the other people. So it’s not a complete loss of $ight.
This might be one of those properties that languishes on the MLS for 300 days plus w/ only minor price reductions.
I live very close to this place. It is a very good neighborhood. I can’t imagine paying over a million for this place when single family new construction is having trouble selling at $1.4M, and those place are 4500 square feet.
“It’s land value people.”
Maybe there’s oil underneath… black gold, people!
Land value: you know, they’re not making any more of it!
$850,000 max; $800,000 more likely, and very hard to find a buyer willing to live in a glorified three-flat conversion w/tenant on 1st floor and shared backyard, front lobby, entry stairs (x2), etc.
Might find a bachelor trader, if they still exist, who wants to live in Southport corridor and put up with tenant.
“Might find a bachelor trader, if they still exist,”
They exist–ask Sonies. They just don’t exist in LV. 😀
What bank is going to finance even 80% of this? I don’t think it fits FNM/FRE’s conforming guidelines either (533k for 2-unit).
This one will be fun to follow at least.
I’m gonna guess 670k here.
My guess is that this property will sit for a long time.
Of note the owner has refinanced at least 7 times in the last 11 years, sometimes with only a few months in between each refinance.
I can’t tell if there’s a second or not (or what’s even the first!) so I can’t say with certainty what liens are on the property.
In CCRD there are two mortgages without releases…and if both of those mortgages are in fact not paid off then damn he owes a lot of money which explains the purchase price ($400ish plus $400ish). BUT if there is only one mortgage (which might explain why there’s not just one jumbo for $800k rather than two $400’s) then this dude is just plain delusional thinking he’s going to get over a million for this especially when he owes so relatively little.
If he owes only $400k then this place cash flows very well based on his original purchase price but if he’s got a big note then he’s barely breaking even, if that, and he’s using it for tax depreciation to offset his taxes.
Can anyone with access here run a quick chicago title abstract on this (for free of course!)
at a 6.5% cap rate this place is worth $540k. good luck seller!
The $1m price is spot on…
…with zero down and 100% seller financing.