After (Alleged) Multiple Bids, This Bank Owned 1-Bedroom Sells: 630 N. Franklin in River North
This bank owned 1-bedroom at 630 N. Franklin in River North was the topic of much conversation in January 2011 when it was reduced from $149,900 to $108,900.
See our prior chatter here.
Here is sampling of what many of you thought about whether or not it was a deal and what it would sell for:
“Obviously I think it’s a screaming deal at ask (this is not, afterall, the sloop). However I do expect it to close above ask. We’ll see.”- Bob
“Agreed. 100k is a bargain for a newer 1 bed in this locale.. It’ll go above ask.”- Riz
“There is zero chance this sells for 109k. I bet it sells much closer to 150k than it does to 100k.”- Chuk
“Wow, this is a STEAL. I can’t imagine who would rent when they can live here for a fraction of the cost. Thanks for the lead, I hope it’s not too late, as I bet this thing sells for way over asking. If I get it, I will have this thing paid off in 4 years, and then rent it out for the next 20.” – Jackson
“Thanks for the info Chuk – this has been my experience as well. These properties that are too good to be true lure the investors out of their hiding places. I am always amazed at how many people have so much “extra” cash. Seriously, as you said, there were multiple CASH offers above asking. People on CC – take note – more proof to my opinion that there are a ridiculous number of people/investors waiting to snatch up foreclosures/short sales.”- Clio
The unit just closed.
- Bank owned and listed for $108,900
- Sold for $113,000
Did someone get a deal or is this the “new” River North market?
Corey Scott at Prospect Equities had the listing.
Unit #513: 1 bedroom, 1 bath, no square footage listed
- Sold in November 2005 for $171,500
- Lis pendens filed in April 2008
- Bank owned in April 2010
- Originally listed in November 2010 for $149,900
- Reduced twice
- Was listed in January 2011 for $108,900
- Sold in February 2011 for $113,000
- Assessments of $191 a month (includes cable)
- Taxes of $2531
- Central Air
- Washer/Dryer hook-up in the unit
- Bedroom: 11×10
- Living room: 15×16
- Kitchen: 10×10
reasonable for dumpy buildings (sorry to whoever on here lives there)
The North facing 2/2s are somewhat pleasant
After 1016 W Grace this is maybe the best deal I’ve seen in the city.
Didn’t Chuk claim that he offered 130k for this?
Something seems awful fishy that the same poster shows up in all three threads about this place and then claims to have not gotten this, yet says he bid ~20% more than what this actually sold for.
Hmmmmmmmm.
Shill much?
Alright, ~13%.
I did bid 130k for this. I am trying to find out what happened right now. On one hand, I am glad I didn’t overpay by 17k. On the other hand, I’d like to know why I didn’t get it. The only thing I can think of is that my closing timeframes, etc weren’t as favorable. I’m really shocked it went this low, and I think it would have been worth 130k even though I would have overpaid.
chuk,
did you bid with an all-cash offer?
“did you bid with an all-cash offer?”
Yes. I will admit that I put the offer in with about 1/2 hour to go before the deadline on a Friday. There was some confusions about whether the bank was still accepting bids. I was told originally that they were not, and then I got a call back a couple of days later saying they would accept them until Friday at 5pm. I have the feeling maybe mine never made it in. I was not dealing with the listing agent directly, but I have my own buyers agent.
This probably was an inside deal. If you offered a cash substantially over ask, then others probably did too. We’ll track down the name of this ‘buyer’ in a few weeks and figure out who the hell he/she is.
Why ‘alleged’ multiple offers,Sabrina? It is happening pretty frequently on good deals these days.
Well, I certainly hope G, sabrina, et al are right about these deals becoming plentiful. I am really kicking myself that I wasn’t the one who got this place for 113k. This was an ideal setup for me, and I just hope that another comes along near this price in this building before the end of the year.
“Why ‘alleged’ multiple offers,Sabrina?”
I’m guessing the alleged is because I previously reported that I was told that by my broker, and I put in a bid above the selling price. Seeing as it sold at 113k, I could see why she is suspect of my info. Quite frankly, I’m suspect of my own info at this point.
BTW, this unit was brand new, never rented. I was told the owner had bought 2 units as an investment, and never moved in.
Yeah. But it sold for over ask, which would lend credence to the multiple offer situation.
chukdotcom – I know you love this building/location, etc. but do you worry about the types of people that are going to be moving in? That could really hurt values and change the whole “feel” of a building. Don’t mean to be negative, but maybe you dodged a bullet there.
“I know you love this building/location, etc”
I don’t really love the building or the location. I love the low fees and low taxes. I will only be using it 1 week a month, so that is important for me. Also, I need to be within reasonable walking distance to the Willis Tower.
The problem I am finding is this: The majority of the short sales and foreclosures are in crappy buildings. 182 West Lake, 8 West Monroe, etc. In addition, all of those places have assessments 350 and up. That is a big difference to me.
So, my choices are limited to 1 br, relatively new construction, common fees below $200, walking distance to Willis Tower. The CMK buildings seem to be the only ones that fit that bill. 235 WVB is too expensive and I hate the area. 1620 S. Mich is a little too far, and that bldg is in worse shape than 630 N Frankin.
If I was a “normal” buyer, I’d have many more options and different priorities, and N Franklin would not be at the top. But given my situation, 630 N Franklin is perfect. And at 113k, I think my investment would be relatively safe for the next 5 years. There are 2 other 1 br’s in this bldg that just went under contract that were asking 175k and 189k. I’m guessing they didn’t sell for anywhere near 113k. Having a 50k head start would have been very nice.
“BTW, this unit was brand new, never rented. I was told the owner had bought 2 units as an investment, and never moved in.”
This is a bunch of the 1-bedrooms in the building. They were almost all sold to investors. When the building first closed, investors who lived in the western suburbs owned like 3 or 4 of them (each) and were trying to rent them out. What do you think it happening to them now?
There have been short sale/distress sales in this building for many months now (especially for the 1-bedrooms.) I’m doubting this will be the last we see here and now there is a comp at this price.
“Why ‘alleged’ multiple offers,Sabrina? It is happening pretty frequently on good deals these days.”
There is no way to confirm this really happened unless the listing agent actually e-mails me and tells me (and even then, not sure I believe it.) Yeah- they put it in the listing and say “multiple bids please submit your highest offer by 1/21 at 5 pm” but that doesn’t mean it happened.
Just ask Milkster, who has been buying foreclosures/short sales around the city over the past year or more. She has some stories to tell. A lot of things are said that never exist.
I don’t know whether this one had multiple bids or not. It appears to have though- based on chuk’s comments and the sold price.
“There have been short sale/distress sales in this building for many months now (especially for the 1-bedrooms.)”
The one for 189k was a short sale, but I haven’t seen any others in the last few months.
“I’m doubting this will be the last we see here and now there is a comp at this price.”
But I’m worried that the 2 other 1br’s that went under contract after this may mess up that comp. That is what made it so hard for me to decide what to bid for this. Which is why I basically split the difference. You had a 1 BR for 110k and one for 189k. And now most surprisingly, they have both sold! Which was the “right” price?
The only thing I see in the pipeline (realtytrac) is unit 509 that appears to have gone bank owned on 9/28/2010.
“NAR overstating Real Estate Sales” Go figure-Realtors lie. Real numbers show why the market continues to plummet-not even close to bottom.
http://www.ritholtz.com/blog/2011/02/is-the-nar-overstating-re-sales/
“You had a 1 BR for 110k and one for 189k. And now most surprisingly, they have both sold! Which was the “right” price?”
Obviously, neither one of them…. The same thing has happened to me time and time again over the past 2 years. I have bid on scores of short sales/foreclosures that were priced really low (all cash offers) only to be rejected EVERY time. The majority of the sales prices were actually lower than what I offered. I am not sure what happened – but I assume (maybe incorrectly) that the insiders have the power and there is definitely some unethical (if not illegal) behaviour going on with some of these sales. Maybe the brokers are in cahoots with the banks and are making inside deals. Who knows?
Definitely an inside deal… probably a friend of the bank’s portfolio manager.
Crony capitalism at its best right here… the rich get richer while “the poors” don’t even get an opportunity to get in on a good deal.
This is an examply of why, unless you have a good friend thats an REO portfolio manager, or are an established semi large landlord who does business with a specific bank a lot, or a big time realtor, you won’t be getting any good “deals”
Bri.. keeping you updated, up 47% last year…
http://www.bloomberg.com/news/2011-02-18/rio-de-janeiro-office-rents-overtake-new-york-for-first-time-study-finds.html
It wouldn’t surprise me if there were multiple offers on this property. Although I have toured many properties where “multiple offer situation” wasn’t specified in the MLS…it was only communicated via email upon presentation of an intial offer. And then they immediately ask you to resubmit best and final…which is kind of annoying, since it took time to put together the first offer.
Some of the best deals I’ve seen were literally CRAWLING with prospective buyers on the first and second days of the listing. Several parties in the property at the same time…it’s kind of uncomfortable to be looking at a property with tons of other interested parties.
I live in River North and am definitely getting the sense of a change in demographics. Many more younger people now — probably due to lower prices and more rentals. I currently rent, and though I love River North, I’d be hesitant to buy there now. The neighborhood is not collapsing by any means, but I think the younger, lower income, more transient crowd will soften values in the near term.
As a buyer, I like to see this. I like to consider the 1BR/1BA downtown condo the “atomic unit” of real-estate and to hear that they’re going for ~$100k gives me the impression we’re converging at a bottom..
Lincoln park seems to be doing fine with a lot of young transient people…
Values will soften when you have giant vacant lots, crime, and section 8 housing… 100% occupancy is a good thing, regardless if they rent or own
I’ve been on both sides of a multiple off er situation in the past few months and both were real .
“Just ask Milkster, who has been buying foreclosures/short sales around the city over the past year or more. She has some stories to tell. A lot of things are said that never exist.”
Hi – Yes, that’s true! I’ve been bidding on condos and multifamilies in the cheapest price bracket all over the NW side since July 2009 and nothing has ever been straightforward and normal. A couple of months ago I bid on an REO. I aggressively lowballed it and they asked me multiple times to submit my highest and best offer. I did not raise my bid because I could not afford to, and in the end they accepted it. Sadly I ultimately had to turn it down because the health of the HOA was questionable.
In multiple other cases I’ve been beaten out by higher cash offers. In other cases, the listing agents were unscrupulous and kept raising the asking price whenever I met their counter-offers. I’ve bid on multiple properties through the Fannie and Freddie programs where bidding is only open to owner-occupiers for the first 14 days. The way those always go is that they go through at least 2 rounds of highest and best offers and by that time the 14 day owner-occupier period expires and bidding is opened to investors and the property will go for way above asking price. Once a house I wanted went for 4 times the asking price.
My story is that I live in NY, but I love Chicago and spend a lot of time there. I am trying to buy a place for myself in town. I did buy a studio on Sheridan Road a year ago for myself which I love, but there was a tenant in place who wanted to stay and I felt bad asking him to leave. So he stayed, and I guess you could say I became an accidental landlord. But I got a great deal on it and I am cash-flow positive and my tenant is great and he’s helping me pay off my closing costs and monthly expenses and helping save to renovate once he moves out (because the place is a wreck).
So maybe I’ll keep that place as a rental or for my parents, or if I don’t find another place and my tenant decides to move, I’ll just take it over. Right now I’m looking at condos and multifamilies. I ruled out SFHs because a SFH will be too hard to maintain when I live in NY most of the time.
My advice to everyone is set your ceiling for your finances and your monthly expenses and do bow to pressure to go beyond that when you’re bidding on properties. Overall, I take a pretty conservative approach and I will not buy anything with a questionable or non-existent HOA. After 2 years of actively looking at and bidding on many properties, I’ve only managed to buy that one studio on Sheridan Road.
Milkster. Wanna split a 1 or 2 br? I only need it one week a month…
I think that most condos priced at 50k or spare going to have nonexistent or troubled HOA or be mostly rentals.
Also. For those of you dreaming about buying a REO condo, factor in 6 months assessments due at closing.
chukdotcom and milkster – let’s buy a 3-4 flat. We can get one pretty cheap, renovate, separate into 3-4 units, and each have a place. The fourth unit could be a rental that provides the money for the maint./taxes. Wouldn’t that be a great deal?!!
“Also. For those of you dreaming about buying a REO condo, factor in 6 months assessments due at closing.”
I was told the bank had to be keeping up with the assessments by law. Why do you say that?
chukdotcom –
I see some reasonably priced studios and 1 BRs pop up around 100K or so at 345 and 400 La Salle from time to time. Maybe the other CCers can tell us if those are good buildings? I don’t know personally, because that’s above my ceiling for a condo and I don’t usually find stuff in my range downtown so I’m not really familiar with the various buildings.
Also, I see a studio at 33 W Delaware Unit #9C closed on 11/18/2010 for 89K. This seems like an amazing deal for the location, but I don’t know what the story is at that particular building either.
“I was told the bank had to be keeping up with the assessments by law. Why do you say that?”
Has someone provided you a reference to the law, or is that just on faith?
If the bank actually forecloses, then, by law, the association can only lien for 6 months of unpaid assessment for pre-foreclosure periods. The banks will (generally? always? should be always) pay the current assessments, b/c then the association can then place a lien for all post-f/c unpaid assessments and seek to foreclose, if they like and as there is no longer a mortgage, come away with a free and clear unit. I don’t think the banks are paying that 6 month pre-f/c lien off until REO sale, but that might be a mistaken impression.
“Milkster. Wanna split a 1 or 2 br? I only need it one week a month…”
LOL. You can feel free to e-mail me at oakstbeachgrrl@yahoo.com if you’d like to talk about it.
All the best to you in your search and don’t feel pressured to spend more than you are comfortable spending 🙂
Hi Clio –
How do we contact you?
“Has someone provided you a reference to the law, or is that just on faith?”
Just what I was told by my agent.
“Just what I was told by my agent.”
Fair enough.
My description–tho perhaps not clear–is the reality. There is nothing “by law” that requires the bank to pay assessments, but the association has remedies, and the law does limit the amount of pre-f/c assessments that can be collected to 6 months. And the Bank need not pay that lien off until sale.
Link to a pdf discussing the relevant provisions:
http://www.fischelkahn.com/docs/condominium_legislation_effective_in_2007.pdf
probably not the single best discussion out there, but it was the first I found, so you get what you pay for.
Big ooops! Meant to say “don’t” bow to pressure to raise your bid. Not “do” bow to pressure.
“I see some reasonably priced studios and 1 BRs pop up around 100K or so at 345 and 400 La Salle from time to time. Maybe the other CCers can tell us if those are good buildings?”
From what I’ve heard, 345 N. LaSalle is nice to live in, but not good to own in. American Invesco — ’nuff said!
I think the majority of REO sales are insider transactions. I have no data to back that up, just a hunch based on my experiences. I tried to buy an REO 2 or 3 flat in Logan Sq./East Humboldt Park area from Jan. 2010 to Aug. 2010. During that time I looked at 25 buildings and couldn’t get one. Most of the time I couldn’t even get the listing agent to call me or show the property. Usually the only ones I did get into were lockboxes so the agent didn’t have to bother coming out.
I wound up making offers on 7 buildings. Cash offers, closing right away. 2 of them sold for $1,000 more than my offer. How is that not an inside deal? On one of those the selling agent was also the buyers agent. Finally I just gave up, not worth the hassle and headache to play this game if you’re not in the business and have contacts at the bank or with the listing agency.
“I think that most condos priced at 50k or spare going to have nonexistent or troubled HOA or be mostly rentals.”
Dahlia –
If you are interested, take a look at the Hollywood Towers at 5701 N Sheridan. There are a couple of studios / 1 BRs available right now in the 50K range. I bid on something there a few months back but was beat out by an all-cash buyer who was able to go higher.
For a time, the HOA was exercising their right of first refusal on sales prices they deemed too low and were buying studios in the 80K range.
With the apartment I was trying to buy, they allowed the sale to go through at a low price, but the listing agent had to agree to cancel the listing so the sale would become “private” and the cheap comp would not turn up on MLS.
Yet another complicated situation.
Of course they’re inside deals. CCRD the name of the ‘buyer’ and there’s a good chance the buyer is a veteran RE professional. Quite a few realtors dropped out of the biz (due to lack of volume) and they’re now into RE investing. There’s a bunch of REO’s in my areas purchased by RE investors in the last year yet none of them have yet returned to the market and no one appears to be living there either. maybe they’re ‘buying low’ and ‘selling high’ when they believe the market will return?
And when I see this, all I can do is remind myself to replace the word STOCKS with HOUSES and extend the time period from the 1929 crash. The stock market took three years to reach the bottom and buyers jumped in at every step of the way. And they thought they were the smart money. Ha!!
If fairly liquid stocks took three years to reach the bottom, just how long will it take for houses to do the same?
Extracts from “The Great Crash: 1929”, John Kenneth Galbraith, First Published 1955, Page 130
“A common feature of all these earlier troubles was that, having happened, they were over. The worst was reasonably recognizable as such. The singular feature of the great crash of 1929 was that the worst continued to worsen. What looked one day like the end proved on the next day to have been only the beginning. Nothing could have been more ingeniously designed to maximize the suffering, and also to ensure that as few as possible escaped the common misfortune. The fortunate speculator who had funds to answer the first margin call presently got another and equally urgent one, and if he met that there would still be another. In the end all the money he had was extracted from him and lost. The man with the smart money, who was safely out of the market when the first crash came, naturally went back in to pick up bargains. (Not only were a recoreded 12,894,650 shares sold on 24 October; precisely the same number were bought.) The bargains then suffered a ruiness fall. Even the man who waited out all of October and all of November, who saw the volumne of trading return to normal and saw Wall Street become as placid as a produce market, and who then bought common stocks would see their value drop to a third or a fourth of the purchase price in the next twenty-four months. The Coolidge bull market was a remarkable phenonmemon. The ruthlessness of its liquidation was, in its own way, equally remarkable.”
“From what I’ve heard, 345 N. LaSalle is nice to live in, but not good to own in. American Invesco — ’nuff said!”
Someone posted here that the association was in great shape. With all that’s happened in that building, they will eventually find a price bottom. At that point, it may be a great building to own in (if you bought near the bottom).
I think it’s probably close to happening.
banks will often not choose cash offers if the buyer will obtain a mortgage through that said bank.
Yes, the unresponsive agents and broken lockboxes drive me crazy!!
My agent went to look at a 2BR/2BA short sale in Albany Park on my behalf around Thanksgiving. The place had been on the market for over a year. List price was 99K. It was on the top floor of a vintage building which was the 3rd floor.
The lockbox was broken and my agent could not get in. We placed an offer anyway of 75K. The LA said it was far-fetched that I would get it and kept harping on that there was water damage under the fridge so I really didn’t want that unit and started pushing the ground floor unit for 149K instead. It was a total bait and switch. He would not respond to any of our questions about my bid on the 3rd floor unit and at one point claimed he had misplaced my offer. I knew he had never even submitted it to the bank. Then one day I saw he had raised the list price of the 3rd floor unit to 149K. And now it is “off the market”. I don’t know what happened.
“Also. For those of you dreaming about buying a REO condo, factor in 6 months assessments due at closing.”
Not true. That is the max allowable debt that the buyer can inherit. The assoc and/or bank can choose to waive this as in the case of my purchased REO.
“This probably was an inside deal. If you offered a cash substantially over ask, then others probably did too. We’ll track down the name of this ‘buyer’ in a few weeks and figure out who the hell he/she is.”
Yes, HD, that might be interesting. What is currently interesting is the fact that the listing office was Prospect Equities Oak Brook and the selling office was Prospect Equities Orland Park. It was the first transaction with these sides in hundreds of listings by the OB office since 2007. The OB office has only sold 2 of the Orland Park office’s hundreds of listings.
I think this was a freddie mac property, so if the highest bid was not accepted the difference is coming from future taxpayers.
That being said, incompetence is so prevalent in all aspects of distressed property dealings that it is hard to distinguish from those who take advantage of it.
@HD,
You can guess on when the bottom of the market is but you don’t really know. Based on your 1929 stock market data when would you GUESS the bottom is? Prices have already been falling for a couple years. I understand there is a shadow inventory but you can’t predict for sure what that will do to the market, you can guess. Isn’t most of that shadow inventory in either crummy or non-livable condidion? Or no HOA in effect so no mortgage availible? This means that the average person won’t be able to buy that shadow inventory over the next 3-4 years, same as now. Most people need move in ready homes, they can’t carry two homes while one is being rehabbed. Or they don’t have the contact or knoweldge to rehab a home.
Chris: Much of the shadow inventory is currently occupied. It’s owners who are in HAMP, alternative loan mods, accidental landlords, with some in foreclosure but vacant, or just being held off the market.
There is a palatable dearth of move-in ready homes, *priced at market*, in decent areas. That’s why when a ‘deal’ comes along it receives multiple offers.
I have so many clients who haven’t paid their mortgage (or loan mod) in many many months, often two years or more, in various neighborhoods and villages in the area. BofA freely admits that it takes 19 months on average for them to process a foreclosure, and IL is a judicial state so I’m sure that average is substantially longer here.
And my clients are a small niche of people who have access to the legal services I provide, I rarely if ever represent private clients in foreclosure, and I can extrapolate outwards from there what the broader market is like.
If you want the ‘bottom’ look for foreclosures and DQ’s to drop significantly to pre-crisis levels. Then you konw the tide of foreclosures will eventually stop. The banks are going to work through them one way or another. It’s not like these homedebtors are going to get their house for free for the rest of their lives.
Have you ever seen a HAMP modification? It’s a joke, they still create a loan where the payments increase from years 5-10 (And even thereafter due to property taxes), the length of the loan is often extended to 40 years, and more often than not, there is a balloon payment at the end of the 40 years! Imagine some 40 year old paying his loan mod for 40 yeras only to STILL owe a balloon at the end? Ha! these are all future foreclosures stalled. We’ll still be dealing with elevated foreclosures for years and years.
Milkster- I am not looking at studios or even one beds. I’m looking for a good cash deal that I can spruce up/rehab and resell at a profit-therefore I would not touch a property where a future buyer had no hope of getting a conventional loan.
So I’m looking a two bedroom apartments in stable associations in decent neighborhoods-not gonna happen at 50k.
I would think then some percentage of these HAMP loans won’t go to REO. For example, someone who lost a job is eventually able to find a new one. When they do work their way through the system over the next 3 or 4 years it sounds like they won’t be much different than the current REO’s on the market which as we’ve discussed are very difficult for the average person to buy.
I don’t think the shadow inventory will be as big of a drag on the market as some do here. People still want quality housing and a move-in ready home is not a comp to an REO in most cases.
Great, so the new mini-Trumps are trying to corner the market on cheap rentals. They are making some awfully big assumptions that desirable renters are even going to want or need to live in Chicago within a few short years. Mini-Trump Madness Redux seems to me to be playing out with the people who only *wish* they were the reasonably informed and connected people from the first go-round that lost their everythings in the bust.
I keep getting this sinking feeling that Chicago is 10 years away from being a white collar Detriot.
The 40k – 130k office jobs that are the bread and butter of this city are not going to exist like they do by 2016. Offshoring and cost cutting is ramping up even now. People like stock market metaphors on this site, it’s just like the current market. Just when you think costs can’t possibly be cut further or outsourcing operations have reached critical mass, we find yet another way to do it cheaper and faster. Just when you think the market has peaked and all the dumb money is in, it just keeps going up, because there are suckers out there that won’t stop until they have lost every nickel of their money.
Chris:
http://www.upi.com/Real-Estate/2011/02/04/HAMP-Cuts-Re-default-Rate/6251296836401/
hamp defaults on the ‘permanent’ mods is allegedly 15%; while private loan mods are higher ex. Chase is 35%.
but like I said above….the way to backdoor a loan mod is to, in this ordeR:
1) lower the interest rate (temporarily)
2) reamortize the loan to 30 or 40 years
3) create a balloon payment.
The HAMPs are not for the borrower’s benefit, it’s for the bank’s benefit, to keep a living body in the house paying ‘some’ money. They will eventually redefault. They have to. Temporarily low interest rates, 40 year mortgages with balloon payments. IT’s a joke. What happens when they want to move or sell? It’s a short sale, without a doubt? If the bank wont’ cooperate then it becomes a straight up foreclosure. They will NEVER be able to sell what they owe on the principal. NEVER.
“If you want the ‘bottom’ look for foreclosures and DQ’s to drop significantly to pre-crisis levels. Then you konw the tide of foreclosures will eventually stop.”
wrong… because wouldn’t “pre-crisis” levels be the peak again?
you won’t be able to find the bottom without hindsight and the ability to time exactly right before forclosures go back to pre-crisis levels because by the time everything goes back to “normal”, well you missed the bottom by a longshot
If anyone out there likes Edgewater or highrise studios or 1 BRs I think Hollywood Towers would merit a look. There is a ton of building information on their website if you Google it. This isn’t one of those sketchy HOA situations.
It’s is actually a stable, well-maintained condo with a ton of amenities included in the assessments although I add the caveat that I have not looked at their financial statements. They have an active and involved HOA who was trying to keep sales prices high by buying the lower priced units themselves through their right of first refusal so the low comps would not show up on MLS and drag prices down across the board for the building.
It doesn’t seem that they were entirely successful because some of the comps have turned up anyway and I guess after a certain point they can’t buy all the cheaper units.
“I keep getting this sinking feeling that Chicago is 10 years away from being a white collar Detriot”
You really believe that? The industries that Chicago was built on have been dead for 50 years and the city re-invented itself, Detriot did not.
“The 40k – 130k office jobs that are the bread and butter of this city are not going to exist like they do by 2016”
They will be alive and well in 2016….probably not in 2026 as tele-communiting becomes more popular and cost effective. However even if the jobs aren’t downtown the people will still need somewhere to live and will stay in the city for the culture.
Milkster: here is a great cash-flowing 1 bd. on the Oak Park city limit line.
http://www.redfin.com/IL/Elmwood-Park/7234-W-North-Ave-60707/unit-1113/home/13521569
The drop in the DQ rate means the the peak is well over and in a few years the foreclosure pipeline will be curtailed. It’s called ‘the light at teh end of the tunnel’.
You can see the bottom ahead from that evidence. Really, it’s not that difficult. and even if you miss the ‘bottom’ so what. I’d rather miss the bottom than buy at the top. Of course you can only see it in hindsight but you can predict it in foresight.
“#Sonies on February 18th, 2011 at 12:21 pm
“If you want the ‘bottom’ look for foreclosures and DQ’s to drop significantly to pre-crisis levels. Then you konw the tide of foreclosures will eventually stop.”
wrong… because wouldn’t “pre-crisis” levels be the peak again?
you won’t be able to find the bottom without hindsight and the ability to time exactly right before forclosures go back to pre-crisis levels because by the time everything goes back to “normal”, well you missed the bottom by a longshot”
Hi Dan –
Thanks for the listing! It’s a super-cheap price, although I don’t know that area at all. I was reading about Elmwood Park recently on Citi Data though and thinking how tame we all are on CC compared to those readers! Unfortunately that area won’t work for me because I like to be in the city and I don’t have a car so I rely on the el and commuting in from O’Hare on the blue line. But I appreciate your thought just the same and maybe that building would work for another CC reader.
“You can see the bottom ahead from that evidence. Really, it’s not that difficult. and even if you miss the ‘bottom’ so what. I’d rather miss the bottom than buy at the top. Of course you can only see it in hindsight but you can predict it in foresight. ”
no shit sherlock… are we still at the top?
nope!
“Milkster: here is a great cash-flowing 1 bd. on the Oak Park city limit line.”
“I don’t know that area at all”
It’s actually acroos North Ave from River Forest, rather than Oak Park.
“BofA freely admits that it takes 19 months on average for them to process a foreclosure, and IL is a judicial state so I’m sure that average is substantially longer here.”
I purchased my REO from BoA and it was listed for 28 days…not sure what “process” means though.
Long story short, if it is a good property at a good price, it will sell.
Don’t forget that a lot of the major culture attractions in the city is dependent on public funds. Donations, entrance fees, endowments, school programs, etc. All of these have dropped in the last few years, causing cuts. My husband works at a major NFP attraction and has seen it first hand.
IOW, all of this culture that people like to bring up needs to be supported. Less support turns into less culture. It’s already happened with the Park District trimming music fests. Don’t expect these attractions to stick around if they’re not supported.
Right anon(tfo), also the SEC of Harlem & North Ave is Oak Park.
“It’s actually acroos North Ave from River Forest, rather than Oak Park.”
A-Fed:
http://www.housingwire.com/2011/01/21/bank-of-america-to-resume-foreclosure-sales-in-judicial-states-early-2011
“BofA said of the foreclosures it conducted in the fourth quarter, 78% of the borrowers had not made a mortgage payment for more than one year. The loans averaged 19 months in delinquency. More than half of the borrowers either lost their job or had their income reduced.”
“Long story short, if it is a good property at a good price, it will sell.”
Except when it’s not a good price, or its not a good property, or the mortgagor is in foreclosure, or default, etc.
Plenty of stories floating around Cali about countrywide loans that are 24 months DQ without even as much as a DQ letter from BofA. it’s like they don’t even care…
These are not just bad properties in bad neighborhoods, yeah there a lot there, but there are plenty where you live too…it could be your neighbor, your aunt, your cousin, your co-worker, your brother or sister, the couple you know from church…
I could not find the interior photos for this one, but I saw some others in the building on redfin and it seems the bedroom has no windows which to me makes the place unlivable! Also the square footage is around 720. Honestly, I don’t find this to be a good deal.
“Right anon(tfo), also the SEC of Harlem & North Ave is Oak Park.”
Yeah, just providing context for Milkster.
HD – thnx for the link. Interesting. From the research I performed, my REO was not occupied for ~6 months before it hit the market confirmed (somewhat) by the doormen who hadn’t seen the prior owner for that rough time. I can very easily see BoA taking 19 months to remove a tenant and acually forclose on the property given the relatively recent concern with removing owners who do not make payments.
Yet, Darwinism, survival of the fittest…if you can’t pay your mortgage, you do not deserve to be in the place.
“I could not find the interior photos for this one, but I saw some others in the building on redfin and it seems the bedroom has no windows which to me makes the place unlivable!”
Yes, this is a common CMK practice. They lower the wall a few feet to allow in natural light, and then they can call it a 1 bedroom. And the square footage feels like MUCH less than 720. More like 550. Can they include the balcony in the sq footage? Having said all that, I still wish I bought it for 113k.
Oh, lord. Here we go with the “Chicago is the new Detroit” thing. Apparently in 2020, everyone is going to telecommute from some sprawling city in the sunbelt because all Americans care about is sunshine and mcmansions for under $200 per square foot. Until gas hits four bucks a gallon and every magazine starts doing articles again about how the suburbs are dead and everyone wants to live in a city with good public transit. Surely we’re already on the way back to that trend in real estate hype. I just heard a thing on NPR yesterday about how more poor black and immigrant families are moving to the ‘burbs and the green zones of inner cities like DC are getting progressively whiter and wealthier, with homes within walking distance to the metro selling for 50% to 300% more than homes not near the train.
Chi-town will never be D-Town.
Research what happened to DetRIOT in the late 60’s to early 80’s under sometimes dubbed “white-flight” and you will understand why.
Bad location (El, busy road, no neighborhood) and generic, non-inspiring interior….. I vote no.
I don’t think Chicago will become another Detroit, or Illinois another Ohio, but our political leaders are doing their damndest to make that happen.
Has anyone noticed that Illinois, especially Cook Cty, has become Tax Hell to rival Wisconsin? Or that not only are residents leaving the state, but businesses are as well? Or that every major company that comes here demands a subsidy and gets it?
We are taking serious damage as a city and state as businesses leave to set up in more business-friendly locales. Chicago is business-friendly only in the sense that if you are a large corporation, you will get a massive subsidy many times what the city can ever hope to recover from you in job creation or taxes, with no commitment on your part, such as guaranteeing you will provide XX number of jobs, or stay for a given length of time.
Chris on February 18th, 2011 said:
I think the majority of REO sales are insider transactions. I have no data to back that up, just a hunch based on my experiences”
I agree. I was on the Realtytrac site for several months, and wanted to bid on several properties. The agent they were pushing, Marie Leaner, doesnt respond to phone, email, or anything else as best I can determine. My agent theorizes she doesn’t even exist.
I too was bidding on a property that was an insider deal in Humboldt Park. My bid was 120k. It sold back to the bank for 205k and was then sold to an investor for 110k. The game is rigged.
I tried to contect the bank multiple times and even though my bid was higher they went with the other offer. I was willing to do cash and still did not have my bid honored.
“I don’t think Chicago will become another Detroit, or Illinois another Ohio, but our political leaders are doing their damndest to make that happen. ”
You should hope Illinois becomes another Ohio. Aside from Cleveland, Akron & Toledo Ohio is doing okay. Illinois would be lucky to wind up like Ohio.
Unfortunately we have at least four more years of this oppressive tax regime which means more jobs lost.
Illinois is heading the way of Michigan, but that state is so far gone not sure we’ll even get there.
nobody cares about poor places inhorrigle neighborhoods
***************
sorry,i just couldn’t help myself.hic
Why are you guys up at 245 and 313 AM? And… more importantly, how are you able to write so coherently?!!! I am jealous!
“The game is rigged.”
I think this is true of some properties in some neighborhoods. But it all depends on where you’re buying. I’ve heard from “normal” people who have had no trouble buying the cheap REO house in the burbs. There are several REO properties on CC that are sitting there in north side neighborhoods unsold for months that have been featured on CC. Clearly- they’re not priced cheap enough to invoke multiple bids or interest from “insiders.”
I guess the bigger question is: what are all these “insiders” doing with all these properties? Just becoming landlords? Going to flip them?
These sales don’t appear to really be reducing inventories in any meaningful way as many simply come back on the market a few months later.
“The game is rigged.”
Yes it is. I was chasing a REO property listed at 250K. I bid at 270K. It sold for 261K and that same day sold again to the current owners/occupants for 361K. I still can’t figure out what happened; if the current owners got screwed over and gave someone 100K for nothing.
The property in Humboldt Park, 1449 n springfield has been vacant for months but I was able to talk to the handyman last week who was painting the place. Clearly, this investor is able to sit on vacant property for months. I would have had it rented within 1-2 months but I also lived on that block for 4 years and constantly have people asking to rent from my existing property.
Also, I was chasing a property listed at 260K. The realtor/bank could not be reached by me or my realtor at all … voice mails/emails with no responses. 2 weeks later it was sold for 280K. I could not even make a bid.
Part of the reason the game is rigged is because the banks want to deal with buyers who they already have relationships with. If you are attempting your first purchase and they have no idea who you are, they would rather sell to a trusted repeat buyer for less. If you are a serious investor buying multiple properties from a bank the bank will contact you before they even list it.
Good to know … thanks
“If you are a serious investor buying multiple properties from a bank the bank will contact you before they even list it.”
This is what I meant by certain select neighborhoods and cities. In some areas, the foreclosures are selling before they even hit the market. Sure. In others- they are listed for months and no one wants them. It depends on where the “investors” are buying – right?
I find it hard to believe that “investors” are going to buy up the millions of properties going into foreclosure.
But yes- if you want the super cheap brick logan square 2 flat without much damage- you will probably encounter more than just yourself looking. If you’re trying to buy in some other neighborhoods- not so much.
Ive put in bids on about 14 different multi-units over the last month or so, after they had large price drops 20%+.
On pretty much everyone one of them the listing agent responded to my offer by saying that they had 5-10 offers already and asked for BAFO, so far unfortunately haven’t had my offer accepted on any of them.
On the low end properties are pretty cut-throat between investors, its hard not to get caught up in the process and bid more than you should