Attention All Mini-Trumps: 4-Unit Investor Opportunity in East Lakeview: 441 W. Briar
This new construction 4-unit building at 441 W. Briar in East Lakeview recently came on the market as a short sale.
Built on a 36×135 lot, the 4 units were designed for luxury as the kitchens have stainless steel appliances and unique granite counter tops.
Each unit has 2200 square feet, including 3 bedrooms and 2 baths with 2 balconies.
There is an elevator which opens in-unit for each unit and a deeded garage space.
From the listing pictures, it looks like there are some appliances in some of the units. It’s unclear if any further construction work remains on any of the units.
Is this a golden opportunity for an investor to pick up easily rentable units on the cheap?
Jeanine Wheeler at @Properties has the listing. See the pictures here.
441 W. Briar: 4-flat with 2200 square foot 3 bedroom, 2 bath units with garage
- Old 3-flat sold in September 2007 for $1.26 million
- Originally listed in May 2009
- On and off the market
- Listed as a “short sale” in September 2010 for $2 million
- Currently still listed as a short sale for $2 million
- Taxes are “new”
- Central Air
- Garage for each unit
Even with generous underwriting this appears to be a 5% cap at this price. I would pay 1.4m for it. Call me if you will sell for 1.4m.
MGG
I may take 1.5MM, but it can’t be much more than that unless you are the current owners Dad and want to make him feel good about himself.
Isn’t 1.5M a bit high? East LV has quite a few 3BD/2BAs the same size in the 500s/600s ($2700/3000 rent)
“Isn’t 1.5M a bit high? East LV has quite a few 3BD/2BAs the same size in the 500s/600s ($2700/3000 rent)”
If they’re “worth” $600k each, then even $2mm is a pretty good deal for 4 of them. I’m in at $1.5mm, if that’s true.
Lauren, the whole building is for sale.
“East LV has quite a few 3BD/2BAs the same size in the 500s/600s ($2700/3000 rent)”
Don’t confuse what is listed with what is actually selling, Lauren.
If we’re talking about what is actually selling East LV _had_ quite a few 3BD/2BAs the same size in the 500s/600s.
Heck I don’t even remember McCrapBoxes going for the 600’s though to be honest.
I don’t know… it be profitable for an investor, you may have to go 1.2 million. You probably could turn around and sell all of the units around 400k but you are taking a bit of a risk and have to figure in carrying costs, closing costs (X5 – the initial and 4 closings), and legal fees not to mention the headaches of creating an association, etc. All said, I would pay 1.2 million cash for this place – nothing higher – it wouldn’t be worth it
I looked a few 3/2’s in ELV about a year ago, in the $450-500k range, with no parking (“rental nearby”). They were all nice enough enough, but none were as big or nice as these places are (or could be), and none had garages (as these do).
This place would be a heck of a deal at $1.5 million. Let’s say it takes $50k to get the first two levels into selling condition. I’d then try to get $425k for the first level and $525k for the second level (which shouldn’t be hard), then spend another $150k turning the top two levels into a duplex and putting a spectacular deck on the roof (which I would keep private to that unit, along with 2 of the four garage spots). $750k for a brand new, 4,400 sq/ft duplex, 6 bed/4 bath (and I’d add a half bath), with four balconies and a 2,000 sq/ft private roof deck, two garage spaces, in a very nice ELV location?
Oh, and I just noticed that it has an elevator! (I felt like Clio just now with that exclamation point.)
Anonny I think your prices are low, as I think Bob’s memory is imperfect.
I just looked, and in the past 3 months, about 1/3 of all 3/2’s in 60614 sold for over $600. For 60657 the number was still almost 20%.
Although McCrapbox, even I have to admit this is high-end McCrapbox– private garages, decks, nice layouts.
Btw, between this and the Paulina place, is it “High End McCrapbox Day” at CC??
I don’t think this place is the least bit McCrapbox. I intentionally set my resale figures for the first two levels low ($425k and $525k), to demonstrate how awesome a deal the building would be at $1.5 million. Heck, it would be a deal at $1.8 million (because even assuming my $200k in renovation costs, if you got close to a million for the two lower level units, a million for a …4,400 sq/ft, elevator-served, duplex penthouse 6 bed, with 4 balconies and 2,000 sq/ft roof deck, and two car garage, in ELV…would be a deal).
The duplex PH is an awesome idea and I could see someone being willing to pay top dollar for a place that unique (I’ll gladly make an offer if someone is kind enough to give me 400k).
How many 3BD/2BAs have sold in that area in that price range?
” Heck, it would be a deal at $1.8 million (because even assuming my $200k in renovation costs, if you got close to a million for the two lower level units, a million for a …4,400 sq/ft, elevator-served, duplex penthouse 6 bed, with 4 balconies and 2,000 sq/ft roof deck, and two car garage, in ELV…would be a deal).”
No – I don’t think so – First of all, even if you sell the first 2 floors for 1 million and the penthouse for 1 million – that is 2 million. If you bought the place for 1.8 million and put in 200k, you would likely be losing several hundred thousand dollars – remember that commissions alone will be 100k, closing costs will be nearly 40k, carrying costs would widely range between 40 and 180k/per year (40k assuming 6k/unit tax and 14k in maint assuming you paid cash – 180k assuming the above plus 5% interest only mortgage on the entire amount). In addition, you have legal fees and headaches creating an assoc. Plus, there are no guarantees that the units would sell in a timely manner or sell at all.
No sane investor in their right mind would touch this property for more than 1.3-1.4 million – no way.
The duplex penthouse with huuuuge roof deck would be cool, but also screwed by the fact that people able to pay the price may not want to have the top half of the west side of the building immediately to the east looking right down on this sweet roof deck.
Any investor would probably want to buy as low as possible, put as little into completing the units and try to sell at a below “market” rate price and still try to get 7-15% profit.
it would be next to impossible to make any $$$ off this building if the developer pays anywhere near $2mil for it and has to finish the units and pay a commission. How many 3/2’s have sold in ELKVW in the last year for even over $550k. Not many!
Clio: Find me a listing for a brand new, 4,400 sq/ft, elevator-served, duplex penthouse 6 bed, with 4 balconies and 2,000 sq/ft roof deck, and two car garage, in a prime ELV location, for $1 million.
“How many 3/2’s have sold in ELKVW in the last year for even over $550k. Not many!”
I counted 91 in 60657, and another 151 in 60614. Is that “many”?
Looking at those comps (the recent ones), everything that’s sold in the $600 range seems very inferior to these. It’s not till you get north of $700 that they seem comparable.
So I’m assuming you could get $2.4-$2.8 for these relatively quickly.
What “relatively” means in this market, I dunno. . . but it does suggest the building’s worth more than $1.5 (our highest bid so far, from the large gentleman in the yurt).
Obviously all this depends on how much work is left to be done, though. . .
annony:
Not to mention, 2 kitchens! Seriously, I like the penthouse idea & agree that would be worth over $1 MM, so perhaps the person interested in buying this at $1.6 to 1.8 MM is the person who wants that penthouse. Then they only have to sell off 2 condos. I do think it might be expensive to convert this into a good layout befitting the size of the unit.
I do note that even at $2 MM, someone (mostly the bank) is losing a lot of money. They had $1.3 MM + into the place even before beginning construction, and an 8800 square foot brick building had to cost what, $1.3 MM or more of hard costs, not to mention the carrying costs, etc.
“Clio: Find me a listing for a brand new, 4,400 sq/ft, elevator-served, duplex penthouse 6 bed, with 4 balconies and 2,000 sq/ft roof deck, and two car garage, in a prime ELV location, for $1 million”
Annonny (or anyone else)- if you agree to buy the top 2 floors for 1 million then I will SERIOUSLY consider buying this place – not kidding.
“So I’m assuming you could get $2.4-$2.8 for these relatively quickly”
Are you guys kidding?!!! ARe you guys new to crib chatter?!!! Everyone is constantly talking about the halt in sales and the market being in the toilet with everything overpriced and years and years of inventory out there and you guys really think that all four units will suddenly all sell for 600+? Seriously, if it were that easy, the developer/bank would sell these individually for 500k and be done with it. No – this is ridiculous fantasy.
“How many 3/2’s have sold in ELKVW in the last year for even over $550k. Not many!”
“I counted 91 in 60657, and another 151 in 60614. Is that “many”?”
The trend for the past 1, 2 and 3 months:
60657 = 2,8,16
If it’s “ridiculous fantasy” to Clio, I must be onto something. . .
I am looking at 3/2’s nearby that have sold around 600k or a bit higher in the past 90 days, and they all look arguably inferior:
07580968
07549343
07542455
07505954
07552565
07530281
Some would even argue that significantly more expensive sales (and CC specials!!) such as 07542455, or even 07464113, were inferior.
These sales were not fantasy, and they suggest to me that units here could go for more $600k or more. (Though I would keep it as 4 units / no roof deck).
Also, to your other question Clio, no, I am not Steve Heitman.
“The trend for the past 1, 2 and 3 months:
60657 = 2,8,16”
Duly noted, G. And believe it or not, I am not bullish on the market generally.
Just talking about these places. I think they are worth more than many others do.
(And yes I am taking bait because it’s interesting to me that people who talk about the emotional value of real estate don’t factor that in when looking at brand new very large 3/2’s in a prime area close to the lake in a good school district with garage parking. Seriously, I’m the last person who would want to buy one of these places. . . )
FYI…a 2200sf 3/2 at 462 W Briar rented for $3,700 (looks like that included parking) a few months ago. How’s that for a relavent comp? What about renting this thing out for a few years, then wiping it down and going forward with one of the aforementioned plans?
Does anyone want to go in with me on this one?
I wish… i’d love to if I had the money
I can’t believe everyone is so positive about this property. Wasn’t everyone bashing this street and this area of lakeview a few months ago? Isn’t the building next door the one which was featured here a few months ago? I would have expected that everyone would have said that these units would go for 400k tops. Remember that brand new 2 unit on melrose (?7something east melrose) that was a short sale for 900k – everyone hated that place. I think that was a better location and deal than these places. What is it about these condos that make them so desireable to you guys?
Just to clarify the 91 figure includes townhomes. I guess it’s all in what you consider a comp
I agree with clio on this property. You take on a mountain of risk with 4 unfinished units. While they do look nice and the location is good, reselling anything in this climate is difficult at best.
If it is short sale listed at $2mil, would a bank actually accept a 1.5m offer?
“I wish… i’d love to if I had the money”
Know how to make a million dollars? Start with 1.5MM and go in on this deal w/clio.
Under contract – of course. We all knew this would happen fairly quickly.
Also, again today more properties I have been following have gone under contract!!! I know it is the season, but these are properties that have languished on the market for months and months (some short sales, some foreclosures, but most are not). I know that the numbers posted by G didn’t look that different than years in the past but I have to question the reliability of the source (not G, but the records from where he gets the numbers). There could be some delay in recording properties that just went under contract. I also wonder if there is a list of CC properties that you could somehow flag so that we know when they go under contract and for how much they sell. It would be very educational and entertaining.
“There could be some delay in recording properties that just went under contract.”
The only “delay” is if the agent doesn’t check the box in the MLS quickly enough. I’ve seen it “delayed” a day or two and that’s about it.
Yes, Sabrina, which is why I don’t post monthly figures for a few days after month’s end, and also why I only went up to 1/25 when posting the contract data yesterday.
I wonder if this short sale contract will be approved by the bank. Listed as a short sale since September, no price change and contract on 1/24/11. Foreclosure filed in November. The last mortgage was for $4,069,600, but don’t know if all is owed. My guess is no short sale approval (unless way over $2M ask) and we will see the REO later.
G, I’d guess thats a typical 2x budgeted cost construction mortgage. Expected cost of acquisition plus construction of about two million, plus some equity, and a current balance of more than that two million, because of accrued interest and penalties.
But, as always, whaddIknow.
“This place would be a heck of a deal at $1.5 million. Let’s say it takes $50k to get the first two levels into selling condition. I’d then try to get $425k for the first level and $525k for the second level (which shouldn’t be hard), then spend another $150k turning the top two levels into a duplex and putting a spectacular deck on the roof (which I would keep private to that unit, along with 2 of the four garage spots). $750k for a brand new, 4,400 sq/ft duplex, 6 bed/4 bath (and I’d add a half bath), with four balconies and a 2,000 sq/ft private roof deck, two garage spaces, in a very nice ELV location?”
You are breaking even with these numbers, assuming that you paid cash for the property, and you are not going to incur any further unexpected costs, which is a near impossibility. Where is the incentive for an investor who is going to buy this property?
“You are breaking even with these numbers”
You’re misreading that slightly. The suggestion was to live in that 4400 SF duplex, with a (supposed) net cost of $750k.
I think the completion and reno costs are a bit optimistic, but assuming they are close, that sort of place for $800k is a really good deal, no?
G,
Then the bank can hold on to their property for an eternity. The numbers won’t make sense for this building over $1M for a cash buyer. There seems to be still too much work to be done, it’s too risky.
Anon is right. That’s probably how it will have to be structured but $2M is still too high. I don’t live too far away, so I pass by the building all the time, and looks like a mess. It can of course be recovered but again, not at $2M.
I love the building next door though, and it seems like that one is heavily discounted as well. You’d have to look into how that one is selling as well at their published prices. I’m going to try to sneak in to their open house one of these days- anyone been there? they have their open house sign there at all times, does that mean they are open 24h? 🙂
Anon,
This has to be structured like you suggested above, because, you can’t convince people in this environment to go into something half finished, with the construction per sale model. I mean that, whoever buys this, has to undertake the entire construction and finish it asap.
$4400sqft for $800K sounds great on paper, I am not convinced that it will be for is building. I am open minded though 🙂
“Then the bank can hold on to their property for an eternity. ”
I never said that they will hold out for $2M as an REO. Only that approving the SS might not be the bank’s decision now and that it is likely to end up an REO. They will sell it for market value then, whatever it is (and even if less than SS offer.) Happens all the time.
G,
You might be right. I am not very familiar with the bureaucracy involved in these matters.
Anyone knows about the gorgeous building next door?
From now on, I’m changing my name to Spinoza. I am tired of being the only one using my first name,
you are not the only 1. there is joe zekas, tay, bradford, chris, and dollface.
Well CH, I don’t know any of those people yet, kudos to anyone who operates with their full identity though. It’s so Wall Street Journal like.
I’m confused. I thought this was a new posting, is it not?
Dollface…What a fabulous first name!