Are The Flippers Back? 1-Bedroom Loft Back on the Market at 1601 S. Michigan in the South Loop
This 1-bedroom loft at 1601 S. Michigan in the South Loop just came back on the market after selling as a short sale sometime between December 2011 and February 2012 (I can’t tell exactly from the public record.)
We last chattered about it in March 2011 when it was listed for just $100,000.
See our prior chatter here.
This is the short sale unit that Chuk attempted to buy last year. From Chuk:
“I was under contract for this unit for 107k. There was a 1st and 2nd mortgage on the place and the short sale was taking forever. They wanted me to kick in more money, but I wouldn’t. After 5 months, I told my attorney to cancel the contract because I found something else I wanted to buy. They immediately approved the short sale to me that day, but I had made up my mind. This unit closed today for 107k, and is back on the market for 175k. Who said flipping was dead?”
From the pictures from the two listings, it appears that the only major renovations done to the unit were in the kitchen.
The “new” kitchen now has dark cabinets (painted?) and a backsplash. The “old” kitchen had lighter, maple cabinets.
Both have the same counter tops and black appliances.
The bathroom appears to be the same in both listings.
See the prior listing here.
Bought as a short sale for $107,000, it is currently listed for $175,000.
Will the seller successfully get the higher price?
Laurie Foote at Century 21 S.G.R. has the listing. (She also had the prior short sale listing.) See the current pictures here.
Unit #205: 1 bedroom, 1 bath, no square footage listed
- Sold in May 1999 for $93,000
- Sold in September 2006 for $221,500
- Originally listed in November 2010 for $180,000
- Reduced several times
- Was listed as a “short sale” in March 2011 for $100,000
- Lis pendens foreclosure filed in November 2011
- Sold in December 2011 or February 2012 (I can’t tell for sure) for $107,000
- Just re-listed for $175,000 (no parking)
- Assessments of $218 a month (includes cable)
- Taxes of $1435
- Central Air
- Washer/Dryer in the unit
- Bedroom: 12×10
- Living room: 18×14
- Kitchen: 12×5
Their camera angles make it look bigger at least! Good luck with that price though…I would think it would be tough. Particularly for a 1-bed! There are certainly much better deals to be had for buyers.
Note, parking is not included. The listing says access to gated GUEST parking. Also, #305 was a short sale as well and sold for $125k. Those pictures are ridiculous. The balcony looks about 3x the size. This is a tiny unit.
“Will the seller successfully get the higher price?”
I can only hope so as that comp will help me out. I can also hope the Bears win another superbowl and the Cubs win a World Series — won’t make it happen.
There is probably decent money to be made flipping short sales. Buyers just don’t have the patience for them – or they don’t have the timing flexibility – so they go for a pretty big discount.
Gary, perhaps flipping some short sales….but this South Loop tiny 1 bedroom without parking and nothing done but the cabinets painted and a quick backsplash? That couldn’t have cost more than $2k (if that).
If someone pays $175k for it I think the buyer is not smart and would they find an appraiser to agree with them with the previous sale/others?
“but this South Loop tiny 1 bedroom without parking and nothing done but the cabinets painted and a quick backsplash?”
It has gated parking.
“Note, parking is not included. The listing says access to gated GUEST parking. Also, #305 was a short sale as well and sold for $125k.”
Sorry- I stand corrected then. That makes a big difference- that there is NO parking.
Breaking News!
Michael Jordan’s Highland Park home was just listed for $29 million. (No, it is NOT April Fool’s Day today.)
LOL!
http://www.chicagorealestatedaily.com/article/20120229/CRED03/120229769/michael-jordans-suburban-mansion-listed-for-29-million
“Gary, perhaps flipping some short sales….but this South Loop tiny 1 bedroom without parking and nothing done but the cabinets painted and a quick backsplash? That couldn’t have cost more than $2k (if that).”
It’s not about the upgrades done but the removal of uncertainty. Sure, you can extract extra value by doing some upgrades but there is substantial value in eliminating the PITA factor.
“It’s not about the upgrades done but the removal of uncertainty. Sure, you can extract extra value by doing some upgrades but there is substantial value in eliminating the PITA factor.”
Having been through this PITA, I can agree. However, I don’t see this unit going for much more than 125k. Adding in transaction costs and whatever they spent on the “rehab”, I can’t see there being much if any profit. Also, this was not purchased with cash (mine was a cash offer), and the buyer only put down 5%. I’m guessing that will add a couple of thousand to their costs.
“Michael Jordan’s Highland Park home was just listed for $29 million.”
he should have gone with 23 million
LOL!
Some dumb rapper with more money than sense will buy it I bet
“Michael Jordan’s Highland Park home was just listed for $29 million.”
I’m not too familiar with Highland Park, but now I know that both MJ and Billy Corgan of Smashing Pumpkins fame live there. Is there a reason why a super rich person would choose it over Lake Forest, Lake Bluff or even ritzier parts of Winnetka, Wilmette or Evanston? To an informed guy like me, it doesn’t seem to have the cachet of those towns.
“There is probably decent money to be made flipping short sales.”
“Sure, you can extract extra value by doing some upgrades but there is substantial value in eliminating the PITA factor.”
Examples, please? Not necessarily “PITA extraction flips” (which might be hard to find), but maybe some buildings where short sales have occurred along with non distressed comps at enough additional dollars to represent potentially “decent” money?
“Examples, please? Not necessarily “PITA extraction flips” (which might be hard to find), but maybe some buildings where short sales have occurred along with non distressed comps at enough additional dollars to represent potentially “decent” money?”
I see this all the time where the non short sales are selling for substantially more than the short sales. And a listing agent has to be careful to consider the impact of short sales in their pricing of non-short sales but at the same time not price too low. Let’s face it…if there are two identical condos in a building and one is a short sale and one is not the short sale HAS to sell at a discount or no one will deal with it. The two most recent examples that come to mind are not yet public information.
I think Gary has a point about people wanting to avoid PITA of short sales. I don’t think its worth a $75K premium, at least not for me.
Gary, do you think this is by design?
Why live in Lakeview or North Center when you can afford to live in Lincoln Park? that’s basically the same question as why live in Highland Park instead of Glencoe. Well, actually, let’s not get into this right now. Helmethofer (dan) will surely have his opinions as why michael jordan lives in Highland Park…
“I think Gary has a point about people wanting to avoid PITA of short sales.”
Nobody’s arguing that. It’s the examples of potential “decent money” that I’d like to see.
“The two most recent examples that come to mind are not yet public information.”
Then show us the two previous examples of potential “decent money” based on current comps?
“I see this all the time where the non short sales are selling for substantially more than the short sales. ”
Then this should be easy. I’m curious about the potential for substantial instant equity.
The only decent examples I’ve seen of ‘decent’ money to be made flipping short sales usually involves some sort of bank fraud; where the flipper buys a short sale and then flips it to another buyer waiting in the wings the same afternoon or shortly thereafter. I don’t think there’s a much as that as there used to be; I only saw a handful of instances and they were a couple of years ago. There was an article in the WSJ or bloomberg or something like that a few years ago about it but the banks have cracked down on that. A couple of referrals to the FBI takes care of that pretty quickly.
“I’m not too familiar with Highland Park, but now I know that both MJ and Billy Corgan of Smashing Pumpkins fame live there. Is there a reason why a super rich person would choose it over Lake Forest, Lake Bluff or even ritzier parts of Winnetka, Wilmette or Evanston? To an informed guy like me, it doesn’t seem to have the cachet of those towns.”
Before the current Berto Center (located in Northbrook) the Bulls used to train in Deerfield, which is just west of Highland Park, now Highland Park is very close to Northbrook as well but thats why a lot of NBA players are up there. No clue why a rock star would live in the (Chicago) burbs like that though, maybe to be ironic?
“I see this all the time where the non short sales are selling for substantially more than the short sales.”
Actually selling, or for sale? I see lots of places where a short sale sells for 130k, and there is a “regular” sale languishing at 170k. In the areas/units I have been watching, I have not seen a big discrepancy in actual sale prices.
Halas Field is up there too which is why a lot of NFL players end up in, of all places, 4 bedroom homes on 1+ acre in Libertyville.
In order to “start” the short sale process with a bank, you need to find a buyer, so thats why you see some ridiculously low ask prices at times, to get interest in the property and an actual market bid price, then its up to the bank to “approve” the price after months of buerocracy and nonsense from the bank, the seller and the buyer
Did anyone every answer how long on average, between when a property goes LIS PENDENS FORECLOSURE, before it hits the market?
“Actually selling, or for sale?”
I think it’s pretty clear he stated actually selling. Many examples, too, for substantially more. They indicate to him that flippers can make decent money for nothing more than PITA extraction.
“I have not seen a big discrepancy in actual sale prices.”
That’s my understanding of the current market. I can’t say that I have been looking as closely as you, and maybe Gary, though. I hope he straightens this out with some of those examples he sees all the time.
There is no average answer; but generally, it takes 3-6 months of missed payments to get the lis pendens; and then it’s anywhere between 8 months to years, literally years, before it hits the market. I’ve got one case on my shelf, the homeowners stopped paying in 2008 (the property is south suburban), the foreclosure was filed in mid-2009; and nothing has happened since. Every so often I get an e-mail from some California based REIT that claims to be the owner of the property and they want my client to pay to enter into a loan modification. Whereas it’s patently clear the owner of the collateral has no interest in paying attorneys to foreclose on the property. So who knows, they get to live for free for years now. Must be nice. I’ve got another case where there was a seasoned loan (2003 vintage) that went into default in late 2009; it was an option one loan that is now ‘sand canyon’ and nobody can quite figure out who owns what so that too just sits as the homeowners live rent free. OTOH 5/3rds never securitized their loans and by the 4th month of non-payment you’re recieving a summons from the sheriff to evict. To put in all in perspective, B of A claims that in judicial states it takes almost 600 days from the first missed payment until they actually foreclose on the property.
“Icarus (February 29, 2012, 10:32 am)
Did anyone every answer how long on average, between when a property goes LIS PENDENS FORECLOSURE, before it hits the market?”
As a matter of fact, at the level I am looking at (100-200k), I don’t see ANY sales that aren’t either short sales or foreclosures. I see listings that aren’t distressed, but I haven’t seen any actually sell. When I see you post distressed sales of 50%, I’m shocked it’s not 100%. But I’m guessing a lot of those non-distress sales are in markets that I am not in (SFH’s, luxury condos).
“I think it’s pretty clear he stated actually selling.”
I wasn’t sure if it was just a poor choice of words. People will say “Walmart is selling xbox’s for $199”. Doesn’t mean they are actually selling them, just that they have them for sale.
Berto has a deerfield address too. maybe near nbrook border
Berto Center is still in Deerfield. Highland Park overall may not be as prestigious as Winnetka, Kenilworth or Lake Forest, but each have some amazing areas and each appeal to different folks, depending on lifestyle, ethnicity, location preference, etc. Lake Forest appeals generally to those who want more land for the $$, and don’t care as much about proximity to the city. Kenilworth & Winnetka are older & closer in, more walkable lifestyle, but an elite house can go for several million and still be on a 1/2 acre or even 1/4 acre lot.
Highland Park has plenty of multi-million dollar homes near (and on) the lakefront (as well as some further inland), may appeal more to some who aren’t “WASP”/old line, and also has more examples of contemporary architecture (mid century & forward). It also has several “downtown” areas, good culture, shopping, etc.
“I’m not too familiar with Highland Park, but now I know that both MJ and Billy Corgan of Smashing Pumpkins fame live there. Is there a reason why a super rich person would choose it over Lake Forest, Lake Bluff or even ritzier parts of Winnetka, Wilmette or Evanston? To an informed guy like me, it doesn’t seem to have the cachet of those towns.”
Icarus, here are some stats on the 24 sfh/condo/TH foreclosure sales (REO) that closed yesterday in Chicago that have been reported so far. The totals are the number of days for the following:
Lis Pendens to List Date / Lis Pendens to Contract Date / Lis Pendens to Closed Date
minimum 321 392 425
maximum 1,324 1,394 1,422
median 667 694 729
average 697 770 805
Thanks G (and HD). So it sounds like I shouldn’t wait two years for my dream home to come on the market. Or I could take two years off of searching and crib chatter and save money and sanity. 😀
decisions, decisions, decisions.
I’ve been in a couple of one bedroom units in this building and they are TINY. I like the building overall, but the ones bed rooms are too small. I can’t see this going for $175k without parking. It would be a big stretch even with the parking. They will be lucky to get $130k.
One big question is whether this will appraise for anywhere near $175k since it last sold for $100k and a unit on a higher floor sold for $125k recently.
Not April Fools, but it IS “Leap Day” and remember MJ was quite the “leaper” in his heyday.
Yeah, I can understand a sports star or actor movin’ on up to Highland Park and environs, but a rock musician? Seems s/he would prefer a hip soft loft in the South/West Loop, or perhaps Wicker Park/Bucktown. Or maybe a suburb with a “progressive” image like Oak Park or Evanston.
“a rock musician? Seems s/he would prefer a hip soft loft in the South/West Loop, or perhaps Wicker Park/Bucktown. Or maybe a suburb with a “progressive” image like Oak Park or Evanston.”
Seems appropriate for a pompous windbag, tho. So suits Billy well.
Billy had it out with Chicago Magazine who published a photo of his Victorian in Lakeview. They did not give the exact address but made it real easy to find. After that he had issues with fans and haters on his doorstep as well as many many smashed pumpkins on his property.
Heard that he still has an in-town somewhere in the Gold Coast. Think that the Highland Park home allows him to get away from people.
As for the Jordan property, did his wife get that home in the divorce or did he keep it?
Regarding examples…I think I’ll have to make this a blog post if I’m going to put any effort into analyzing this in depth so stay tuned. I’m most aware of this recently and can actually think of about 4 situations where either the short sale is under contract for substantially less than what non-short sales are under contract for or have recently sold for or vice versa. I will tell you that my buyers will not pursue short sales unless they can get them at a decent discount – 10%+. Who would?
Also, I pulled up all the recent sales in University Commons (plagued with short sales) and all the short sales are in the lower price points and the non-short sales are at the higher price points – and it’s not just the fact that the units are larger at the higher price points.
Why don’t we just watch what this one closes at.
“Why don’t we just watch what this one closes at.”
Because you have already claimed to “see this all the time where the non short sales are selling for substantially more than the short sales.”
“I will tell you that my buyers will not pursue short sales unless they can get them at a decent discount – 10%+.”
That “decent discount” doesn’t seem to support your previous claim of “probably decent money to be made flipping short sales,” if one considers transaction/holding costs.
I’m interested in seeing Gary’s UC Commons numbers. I liked that development and almost moved there.
He probably means discount to REO pricing? Only thing that would make sense
“He probably means discount to REO pricing?”
In my experience, REO pricing is generally lower than short sale pricing.
“In my experience, REO pricing is generally lower than short sale pricing.”
that’s the bank’s experience too, which is why they have finally jumped on to streamlining the short sale process.
“In my experience, REO pricing is generally lower than short sale pricing.”
I’m not seeing that. On an REO the bank often tries fixing it up and getting close to market value. In addition, an REO is much smoother to buy than a short sale so buyer’s don’t need nearly as much incentive to buy it.
“That “decent discount” doesn’t seem to support your previous claim of “probably decent money to be made flipping short sales,” if one considers transaction/holding costs.”
It’s the difference between the minimum discount required for a buyer to buy a short sale to live in and the minimum discount required for an investor to try to flip it. If a flipper can get it at a 20% discount that could work out pretty well. When some of these deals close I’ll give you some examples that surprised me.