Buying a Foreclosure and Re-Listing (Quickly): 512 N. McClurg in Streeterville
This 2-bedroom at 512 N. McClurg in Streeterville just came on the market.
However, it sold only a month ago in a foreclosure auction for $80,000 under the 2002 purchase price.
It has come back on the market for $174,000 above the foreclosure price paid in May.
Has it been renovated (as we’ve seen with other foreclosure sales that are then put back on the market)?
The new listing simply says it has new paint and carpet. There are no pictures from the foreclosure listing to determine if anything else was done.
The kitchen currently has granite counter tops and black appliances.
The bathrooms are marble.
It has central air, in-unit washer/dryer and parking is available for rent in the building.
It also is a corner unit with East, North and West views.
This unit is currently the cheapest 2/2 for sale in the building.
Is this really just a flip?
And what will a new buyer ultimately pay for it?
Brett Hall at Jameson Commercial has the listing. See the pictures here.
Unit #4101: 2 bedrooms, 2 baths, 1400 square feet
- Sold in February 2002 for $391,000
- Sold in February 2005 for $523,000
- Lis pendens foreclosure in June 2009
- Sold in foreclosure in May 2011 for $311,000
- Currently listed for $485,000
- Assessments of $551 a month (includes heat, ac, doorman, cable)
- Taxes of $6457
- Central Air
- Washer/Dryer in the unit
- No parking- leased in the building
- Bedroom #1: 18×14
- Bedroom #2: 11×14
Does this flipper think that no buyers or bank appraisers ever check the latest sales price? The last tic is the truth, sorry. The price at which this place sold last month is the new “comparable” for a unit on this tier and there’s nothing exceptional about this unit, so why would it sell for a premium of nearly 50% over last month’s price? No one but a cash buyer is going to be ALLOWED to pay a such a steep premium and I doubt anyone who has the cash would be so clueless.
If anything, it will sell for less, not more. Financing is getting harder to get, not easier.
Jeez.
Yes, but I think the flipper got a great deal in the foreclosure. Inside knowledge? I don’t see good foreclosures like this available. 1400 sq foot and the living room/dining are large enough for a good size dining table.
“This corner unit has 180 degree E/N/W views”
There is definitely something fishy about the earlier transaction. It was never listed on the MLS. Must be an inside job. That really burns me. Why aren’t asset managers fired over this crap?
BTW, this must be the building that is rotated 45 degrees. The views are spectacular and you really do get that 180 degree view from a corner unit. Only thing is that the ceilings are kinda low.
it will probably sell at ~400k and the buyers will think they got a great deal @ almost 20% off of list and the buyer will have made a pretty good profit in a short period of time
Sabrina said it sold at auction. So if you had been there you could have bid. Stuff seems to sell at a big discount at auction. I wonder about liens and back taxes when buying at auction though.
Yeah its fishy.. I know the building very well would have gladly bought it at that price and moved in instead of letting a flipper take advantage. But then again knowone wants to see a home owner actualy get a deal do they.. Guess thats why things aren’t going to improve not going to have housing inventory clear when you are just selling homes off to resellers. Kind of backwards thinking if you ask me..
@Gary Lucido
thx about the rotated building
“Sabrina said it sold at auction. So if you had been there you could have bid. Stuff seems to sell at a big discount at auction. I wonder about liens and back taxes when buying at auction though.”
If it is the actual foreclosure auction, the buyer gets all the benefits of the lender in wiping out junior liens, and the limit of 6 months of back assessments.
It (often) makes a lot of sense for lenders to allow props to go to actual buyers at the f/c auction, as they avoid carrying and marketing costs and transfer taxes on what would otherwise be an REO re-sale. Anyone know if this is starting to happen more?
Thanks anon
Question : what are auctions other than “actual foreclosure auction” where distressed props are sold?
“Question : what are auctions other than “actual foreclosure auction” where distressed props are sold?”
Dunno. Something like the Vetro auction, but involving multiple buildings, maybe. It would be non-absurd for a REO portfolio to be marketed that way–would do a good job of establishing prices.
all corner units would have greater than 180 degree view, no?
should approach 270 if i remember my geometry lessons
“I know the building very well would have gladly bought it at that price and moved in instead of letting a flipper take advantage. But then again knowone wants to see a home owner actualy get a deal do they.. Guess thats why things aren’t going to improve not going to have housing inventory clear when you are just selling homes off to resellers. Kind of backwards thinking if you ask me..”
Why didn’t you go to the auction and buy it?
“all corner units would have greater than 180 degree view, no?
should approach 270 if i remember my geometry lessons”
If you stick your head out the window, sure. Standing fully inside, and getting a complete view, you get the 180 deg from due W to due E. Can see a bit south of the line described by the southern-most points of your windows, but that’s like the partial ocean view rooms at a beach resort–not really the same.
“should approach 270 if i remember my geometry lessons”
That would depend on where in the room I would be standing and how high I was.
“That would depend on where in the room I would be standing and how high I was.”
When you start into n-dimension space, are you still limited to 360 deg views?
“When you start into n-dimension space, are you still limited to 360 deg views?”
Think of it as a multi colored hypersphere.
Were your parents professors or something?
“Were your parents professors or something?”
Nope.
“Anyone know if this is starting to happen more?”
I’m not seeing it.
Here’s the City of Chicago condo/th/sfh foreclosure auction totals with the number and % of resultant REO:
4Q2010 1,313 1,249 95.1%
3Q2010 3,238 3,097 95.6%
2Q2010 2,585 2,437 94.3%
1Q2010 3,489 3,320 95.2%
The Q4 drop in auctions reflects the self-imposed moritoriums on completing foreclosures by large servicers due to the “issues” with their processes.
OK.. just checking.. I may maintain my anti-academic stance then. Now with Bradford here I gotta be careful about my stance on glass door fridges.
Guy has got to not be married to do that. “honey you forgot to wipe the ketchup bottle top before putting it back in the fridge” I’d kill myself if I ever heard that one.
Missed the part about the auction. I’ve had attorneys tell me to stay away from auctions because of lien and other title issues. Don’t know enough about them.
Regarding the 180/270 degree point….that is true but for some reason (and maybe it’s the location of the building) you get a totally different perspective standing in one of the corner units here. I think it’s because you can look right up and down the streets?
Isn’t the biggest problem with an auction the fact that you have to pay cash (usually)?
I love me a glass door fridge. One day.
Where are these auctions? Where do I sign up??
“it will probably sell at ~400k and the buyers will think they got a great deal @ almost 20% off of list and the buyer will have made a pretty good profit in a short period of time”
This is why the Chicago market is obviously very sick. The apparent arbitrage between foreclosures sold to investors with cash and the price regular people are willing to pay using financing.
Until this gap drops significantly I see a very dark cloud ahead for future valuations.
“Where are these auctions? Where do I sign up??”
One source of info (no rep to quality):
http://cook.ilfls.com/
“I love me a glass door fridge. One day.”
Why, Jennifer? so you can see all the food you are NOT buying every month?!!!
that was a good one clio. you offer up some nice zingers when you’re not typing about psychological benefits over and over.
The public records describe this sale as a foreclosure auction- so that’s what I called it in the post. Either way- I don’t believe the prior sale was ever on the MLS.
“The public records describe this sale as a foreclosure auction- so that’s what I called it in the post.”
Didnt intend to call anything into question, just responded to the content of dahlia’s comment.
“There is definitely something fishy about the earlier transaction. It was never listed on the MLS. Must be an inside job. That really burns me. Why aren’t asset managers fired over this crap?”
I thought some foreclosures just go on auction and never appear on MLS. I am not sure this is considered an inside job. What I have been trying to figure out and failed so far is how does one see the auction listings?
I believe there are two kinds of real estate auctions: “sheriff’s sales” and the big affairs conducted by real estate companies that specialize in REO’s.
Most consumers are only familiar with the latter because they are advertised on TV and the real estate sections of newspapers. Sheriff”s sales are usually advertised only in the much-less-read “Legal Notice” section.
So this action was a “sheriff’s sale,” right?
“clio on June 9th, 2011 at 2:50 pm
“I love me a glass door fridge. One day.”
Why, Jennifer? so you can see all the food you are NOT buying every month?!”
what the heck Clio, are you trying to win me back on your side? well its working.
and by the way, taken in context plus from the person who typed it that has gotta be in the top 5 funniest comments on cribchatter this year. LOL 🙂
“So this action was a “sheriff’s sale,” right?”
Yes- this is NOT an auction held by an auction house. Those properties are usually already bank owned and the bank has hired the auctioneer to move the properties.
These foreclosure auctions or sheriff’s sales take place in two locations in downtown Chicago every day. You can get a list of the properties that are coming up from the Chicago Tribune (or at least you used to be able to.)
In the first year of this blog, I used to use these lists to see where the distressed properties were coming up.
Guys – there is nothing fishy about this transaction. We bought this property at auction sight unseen – we had 30 minutes to make a decision to set the bid and this property had auction hair… like an unreleased 1st mortgage and certain discrepancies which we fixed in court. Try making a $300K decision in 30 minutes on a property that could have an unreleased first mortgage. That’s like burning $300K in a second… and it happens all the time at auction.
Anyone who looks at a transaction like this and baulks at the margin does not understand the auction business. Buying at auction is VERY risky. Many times we buy properties without seeing the inside of the property. We have winners and losers, so the only way to stay in business is buy more properties to spread out the risk and average out returns. That means you need access to a lot of capital and that ain’t cheep. It’s not possible for an outsider to cherry pick assets at auction, like McClurg. We evaluate 100 assets to buy one – and we do an insane amount of diligence on each one.
When you buy an auction property you never know if you are going to write a 300K check and litigate for 12 months only to lose a property over some technicality. There are countless ways to lose your a$$ in this business. Also, don’t forget about dealing with occupants / defendants. We have a home in skokie now where the former owner told me he is going to burn down the house, and I believe him.
512 McClurg is a great condo in a great building and I’m confident we’ll hit our target sale price based on recent comps in the building.
Thanks for checking in Drew. It’s nice to hear about what happens at these auctions and how risky it is.
very interesting Drew. I am sure i understand why you’d lose your money though because of an unreleased mortgage. you mean to say it becomes your responsibility to pay it?! makes no sense to me.
“you mean to say it becomes your responsibility to pay it?! makes no sense to me.”
If the mortgage is still valid, it was senior to the mortgage that was foreclosed, so the auction would be for an interest subject to that mortgage–it’s not, per se, the buyer’s responsibility, but the buyer also is subject to that lien unless/until it is released and can potentially have the interest bought foreclosed out by that unreleased mortgage.
Thanks Drew for that info.
thanks anon!
“We have a home in skokie now where the former owner told me he is going to burn down the house, and I believe him. ”
Most criminals that are dumb enough to do such a thing are dumb enough to talk about it. If it happens you have a pretty good arson case on him, just try to make sure you have insurance on it because him making license plates for $2/day won’t likely cover the damages.
Clio you got me there. Although actually my fridge is fully stocked right now with some beautiful looking fresh produce, and some delicious homemade meals prepared for lunch this week. Who doesn’t want to see that?
jennifer,
people just don’t get that so many of the hardiest and healthiest foods are less expensive like cabbages, beans, potatoes, grains, carrots, bananas, stews… Hell rich people should try and eat poor.
But i still don’t want to see it inside my fridge. Perpetuallys stoned but now passing the now visable container of ben and jerrys… Another frightening thought.
I saw this property a few weeks ago. Was looking at the last sale #’s and wondering why I never see deals like that before they happen! After hearing Drew, I guess I relate a bit more to the auctioneers’ risks, but in this market you are always looking for a great deal, so Drew if you’re reading this pass along some of those savings to the next guy.
BTW, the condo is spacious, w/ excellent lake and city views for the price. Kitchen needs new SS appliances (black? eww…) and bathrooms could be updated. The deal breaker for me and the wife was no floor-to-ceiling windows. 512 N. McClurg has “window seats” that box you in a bit.
Def worth a closer look if you’re not as picky.
http://www.3fxchange.com/blog/flips-flops/3f-properties-sells-512-n-mcclurg-ct-unit-4101-chicago-il-60611/
McClurg sold right where we thought!
PS – still litigating that Skokie home…. Some are winners and some are losers!