Everything But the Kitchen Sink: 4629 N. Magnolia
What would you pay for a unit without, um, a kitchen?
We’re about to find out.
4629 N. Magnolia is a lovely vintage building near the Wilson Red Line stop.
A first floor two bedroom unit just came on the market and is marked nearly 40% off its prior sales price. The unit has in-unit washer/dryer AND parking.
Unit #1N: 2 bedrooms, 1 bath, dining room, parking included
- Sold in March 2006 for $315,000
- Currently listed for $185,900
- Taxes of $3,431
- Assessments of $175 a month
- ARC Realtors, Inc. has the listing
I have learned that there are several offers on the property already. Stay tuned!
In a way, I think this is an ideal situation for many — those people that complain about stainless this or granite that — it is virtually a blank canvas.
In other news, the floors look amazing! But what’s up with the bathroom sinks? Out of place, IMO.
Oh, and any word on the condition of the neighborhood these days? Magnolia Cafe is around the corner and is amazing, but go any further east to the red line and you’ll find a good rate on crack.
You got two sinks in the bathroom, so you’re good to go.
Hi,
This looks lovely! The bathroom is nice. At least the plumbing for the kitchen is there. It would cost round 15K to have a mid range kitchen put in.
Gee, what a nice place!! 😉
I’m guessing this is a foreclosure. At least the previous “owner” left the bath intact. It looks great, but I can’t tell from the photo whether the tub is still there or not. I wouldn’t put anything past whoever stripped the kitchen.
The tub is still there. But the toilet is way too close to it.
Actually, I might as well tell you all that I am under contract for this place. I will fill in the details once the deal is closed. I estimate that it will cost me $15K to do the kitchen.
G and Kenworthey will be proud…. lol! No knife catching here!
Congrats Jason! Send in pics when you’re done making the place livable. Also get those taxes down by fighting the assessor.
That’s great news, Jason! As they say, the “bones” of this place are lovely; the wood floor–they just don’t make ’em like that anymore. Congratulations!
Thanks! You are right about the bones, and I already asked my attorney to appeal the taxes.
Oh, and btw, it has a nice grassy back yard and front and back porches. The parking is garage parking. The common areas are prstine, and every other owner in the 6 unit building has owned since 2000 and it 100% owner-occupied. They even let me have my dog.
Go Jason!!!
Good luck with the tax appeal. The current assessed value is 23,897 which equals a market value of $149,356.
If you want a reduction, it will only be successful through arguing the residential assessment level (16%) down to 10%. The 10% figure represents the “real” assessment level on residential from assessment studies.
Also keep in mind that the current $3,430.61 annual tax bill is without any exemptions. 2N and 3N have the same assessment and tax bills of $2,531.28 and $3,430.61, respectively. If the bldg is 100% owner-occupied, then 3N needs to get their exemption. Every other unit has exemption(s.)
It needs a little work but at that price for a 2 bedroom with parking, this is actually something reasonable. The problem is it looks like your windows are all 2 feet away from a brick wall. So if you’re OK with living in a dungeon…
Maybe I will just leave that alone and take my exemptions.
The pctures are misleading. That wall is more like ten feet away, and the front and back are open.
Here are the prior sales in the building:
1 $315,000.00 03/28/06
4629 N MAGNOLIA AVE 1N, CHICAGO, 60640-4901 map
View Details
2 $226,000.00 02/22/01
4627 N MAGNOLIA AVE 1S, CHICAGO, 60640-4942 map
View Details
3 $190,000.00 08/03/00
4627 N MAGNOLIA AVE , CHICAGO, 60640-4942 map
View Details
4 $180,000.00 03/28/00
4627 N MAGNOLIA AVE 3N, CHICAGO, 60640-4942 map
View Details
Great deal, Jason!! Or I hope you got a great deal. Fill us in when it’s all wrapped up.
The inlay in the main room gives a great look.
You’re basically paying a 2000 price of $200K ($185 base plus $15K to fix). Good job! Let this be a lesson to buyers: be patient; don’t get wedded to one property and overpay, because despite the (silly) argument that “no two properties are exactly alike,” there are more than plenty in this market that will suit your needs just fine.
Let this also be a lesson to banks: you can sell your unit if you price it right. No one is going to buy your foreclosure at 2004 prices, so stop wasting time trying.
Kenworthey,
If only it were that simple. There will be people paying 2004 prices. The banks aren’t going to ratchet down to 2000 prices if they don’t have to. There will be plenty of knifecatchers as many on here agree.
I think in this case the bank came to the realization sooner rather than later that they would have to take a haircut on this thing because it isn’t livable (doesn’t show well to the general public) and bankers know squat about rehab. The market for a property that requires a bit of work is smaller than the market for a regular property. I don’t expect banks to come to their senses until around six months from now when it starts to get cold. I think many are holding out for the “summer selling season” and they might get some suckers..
Bob,
Yeah, you’re right. Let me amend the lessons to bankers: you OUGHT to price at 2001 prices for foreclosures, because though you might get lucky and find a sucker or two at 2004 prices, you’re going to waste a lot of time (and time = money) trying to find them.
Well, I agree. I have looked at alot of foreclsures, and this is the first time that the bank would listen to reason. I am laughing at the bank that is selling the property at 1107 W. Lawrence now.
To make a long story short, the people on this site are right. I am glad my other deals fell through. (And by the way, the deal isn’t for 185K.)
oops–duh! Of course you didn’t pay $185K; was a brain misfire that I thought you did.
Like I would ever give asking price on a foreclosure. I was tempted, my realtor had to talk me out of it.
It is good to see at least one lender not chasing the market down. This is a good glimpse at the future. 40+% off of peak price is what will be necessary for most of the condo market to stabilize.
Maybe I can flip it…… 🙂
This place has in-unit parking?
I’m guessing that’ll cost more than $15k to fix 🙂
Good for you Jason. I KNEW you’d find a better place.
This is a good lesson for all the buyers out there. There are plenty of “deals” coming onto the market. Just because a bank won’t negotiate on one- doesn’t mean the next bank will be so stubborn.
I haven’t seen the foreclosures slowing down yet either.
Can someone please give some feedback on the first comment about safety in this area? I’ve seen a lot of bargain priced places in that nook just east of the Wilson stop…especially on Sunnyside, Agatite, and Windsor. But then when I go read up on things at uptownupdate.com, it seems like all the worst crimes in Uptown happen around there. Several of my friends have told me that as soon as you go west of broadway, it gets much much better. However, I’d like to get everyone’s opinion. Does a few blocks really make that big a difference around the Wilson stop? Also, Jason, did you find out about this place before it hit the MLS?
Multiple offers! We are on our way back up folks, hold on…
Yeah, paulj, I hear that “multiple offers” all the time when I call on these types of places.
There is a huge c.1900 vintage on Columbia, here in Rogers Park, “as is”, needs rehab to get an occupancy permit, for appx. $80,000. Huge place. I called last month and was told there were “several offers”.
Well, it’s still available.
I wonder what some of these dumb banks are thinking. Will they just keep owning all these empty houses? How long do they want to bleed cash on these empty homes, with ridiculous asking prices? Eventually, the regulators will force them to reduce their REO inventory. At this point, foreclosure deals will start getting sweet.
Laura said:
“There is a huge c.1900 vintage on Columbia, here in Rogers Park, “as is”, needs rehab to get an occupancy permit, for appx. $80,000. Huge place. I called last month and was told there were “several offers”.”
Ha! Isn’t that the truth! Jason knows this tactic only too well. It’s amazing how many properties that he submitted offers on that had “multiple offers” are still on the market.
I guess all those “buyers” must have withdrawn their offers.
What’s in it for the banks? I don’t get it. You’d think they would just want to get rid of some of these properties.
Pete,
A lot of these dumb banks aren’t local to Chicago, don’t have a presence here and don’t know a thing about local real estate market.
Many on here often post the bank doing the lis pendens on those going into foreclosure and its frequently an overseas or out of area bank, ie: Deutsche Bank, HSBC, WAMU, Citibank, etc.
These are the banks that wound up with the toxic mortgage loan securities, so you’ve got to figure they’ve already shown they’ve misread the housing bust in a major way just by holding tens upon billions of these junk securities. So I’m not surprised to see “stupid is as stupid does” and that they haven’t come to grips with reality quite yet.
I find it especially amusing when its an investment bank like a Citibank or Deutsche Bank. They made these deals and held onto this inventory so they could get several hundred more million dollars a year in investment banking underwriting fees on the securitizations they were doing. Of course they couldn’t sell all these crap securities they underwrote so they sat on a lot of it and they blew up. So now they lose tens upon tens of billions for what was probably no more than $2B incremental revenue each over the entire boom. Golden retard awards.
Danny,
Yes, a few blocks does make a difference. For example, 928 Eastwood has a couple nice units. But it is bad over there. Once you get closer to the lake (811 W. Eastwood) its much better. Also, west of broadway is nice. The CTA is also rehabbing the Wilson stop.
I’ll comment further tomorrow, too tired!
Laura,
More likely you and Jason are are going to wait too long. How about if we find a seller willing to give you money to buy their place? Would that be cheap enough for you?
More likely scenario is that transactions like these take time to work through and it is in process.
Multiple offers mean people are jumping in….
No they don’t. Multiple offers often mean the listing agent is LYING. Look at the “Multiple offers” on 1107 W. LAwrence. That place has been on the market since October. (Don’t believe the listing date, they have listed it multple times. Make an offer on the place for what you think its worth. So what if you get outbid. There is always another one.
Further, I’d rather by when the market is on the way up, as opposed to on the way down. So waitng can’t hurt.
And believe it or not there may be people willing to pay to get out of thier place. Co-ops are an example.
I think it is hilarious that paulj is calling “bottom.”
Get used to hearing that over and over while prices fall. The bottom is not made of rubber; think more along the lines of a deep pit of sticky muck.
But G, paulj is a banker AND developer. He’s much smarter than us and just looking out for our interests. He would never tout his book to anyone’s disadvantage.
Bottom won’t come til around 2010/2011 after the Option ARM crisis shakes out. If we (we = current owners) are lucky, the rate of decline will slow somewhat until then, but I’d be very surprised to see any significant rebound in values before 2011; especially if the Fed every starts raising interest rates again.
David,
The option ARM resets are precisely why the fed can’t raise rates for the next four years. They know that any rate increase would translate directly into exacerbating the housing crisis even more. I find it funny the media is being quite mum on this whole thing, almost as if once we pass sub-prime we’re in the clear. Not even close..
“Experts” have been calling bottom ever since the housing market started to cool. Unless they provide solid numbers, it’s just a bunch of hot air.
Jason, can you tell us which lender has this REO (without messing up your offer)?
Yes, I’ll let yo know, I don’t have it in front of me, it is a bank I have never heard of. (Good dtrategy to follow a bank that wants to dump its foreclosures.)
Jason – have you secured financing? i’ve heard of people having difficulty getting financing if the unit/house doesn’t have functioning kitchen, or bathroom. Any mortgage brokers out there who can comment?
Seems like a great deal tho – good work.
Hello all,
Just letting you know I closed on this place, I paid $180,900. There were two other offers the day it went on the market. The first was asking price of $185,900.00. Mine was second. then there was a thrid that was $180,000.00 cash. Not sure how I won out.
I really had no problem financing the place. I used Bank of America, and paid no closing costs not even my attorney’s fees. The seller however, wouldn’t pay any traditional seller’s fees, but my mortgage company pretty much picked it all up. The bank also appraised the place at $308,000.00 even with out the kitchen, which shocked the SH^^ out of me. Not sure where the get those numbers from.
The other think to watch out for as that the seller just didn’t care about meeting my demands, like closing on time. My closing ended up being a dry closing, and I was in limbo for 4 days.
I took a pretty close look at the place, and it really is in pretty good shape. TLC and a kitchen I and I am good to go. Central air works great/heat works great/jacuzzi, everything but….the kitchen sink. 😉 Any thoughts?
Jason,
Congrats on a great place at a great price! Give us an update after the kitchen is in with pics and pricing.
Its not surprising the seller was very uncooperative: they have all the halmarks of being nothing more than a big child as evidenced by them intentionally vandalizing this unit as if that would somehow turn their fortunes around.
Not surprised BofA gave an inflated price of 308k either. BoA is using comps, likely from 2006 and doesn’t want to appraise for lower for fear of inviting writedowns on their ginormous portfolio of CMBS. (If they try to appraise for lower they’d have to start marking this portfolio to market as the sham would be apparent and they can’t claim they disagree with lower appraisals).
Try to get a HELOC for 130k though and see what happens, though. I’d bet anything they’d come up with an excuse to not let you take out anywhere near 308k against the unit.
Jason… sounds like you did really well. Congratulations.
What rate did BOA give you since they covered all closing costs, if you don’t mind me asking?
I think another $15-20K for the kitchen and minor updates will give you a great place to live.
Jim
Should the appraisal have accounted for the (missing) kitchen? If they are claiming that $308K is the value with a kitchen, that seems barely plausible (a bit under the 2006 price). If the claim was $308K as is, it is laughable as that means that the completed value is far above 2006.
Well done, Jason.
The value is without the kitchen, and the rate is 6.25 with no points. The appraisor noted the missing kitchen. I didn’t shop that much for a mortaage, I really didn’t have time, so I went with BofA because they guarenteed my closing date. Closing the deal was most improtant to me. What’s a HELOC again? Home Equity Loan?
Home equity line of credit.
Nominally, it means you have a promise that you can borrow up to the limit. Your monthly payments are enough to cover interest on the current balance (with interest tied to LIBOR usually), and eventually it converts into a fully amortizing loan or a balloon payment (in 5 or 10 years).
This was a key method of cashing out equity in the bubble years — get a HELOC to bring your total LTV to 90, 95, or usually 100%, borrow to the limit, and spend it on expensive baubles.
In the current market, however, many lenders are closing or freezing HELOC lines (especially unused ones). A good way to anger responsible borrowers.
(A home equity loan is less common these days — the bank gives you a pile of cash that you pay back with something like a 10-year mortgage. I believe that these are usually adjustable rates, but fixed may be available too. Less flexability than a HELOC, which probably explains why they are uncommon.)
Example: when we bought a condo in LA in 2003 we had the cash for a 20% down payment, but went with an 80/10/10 plan to maintain a large reserve fund. That is, 80% first mortgage, 10% HELOC, and 10% down. This meant that we started out fully borrowed against our roughly $25K limit in the HELOC.
Within a few months we had resolved most of our major repair uncertainty, so we started paying down the HELOC quickly — ultimately reaching about $100 borrowed against the $25K limit.
After about a year, we replaced the windows. Rather than dip too far into our reserve, we paid for it out of the HELOC. (I believe that we actually put the windows on a credit card, and then wrote a HELOC check to the cc company.) That raised our borrowing to about $10K, where it remained until we sold in 2005 (paying off both the first mortgage and the HELOC).
As our balance changed, so did our monthly payment.
1. CMBS=COMMERCIAL Mortgage Backed Securities.
2. Marking to Market of any MBS (R or C) has nothing to do with the appraisal value of the underlying assets–it’s all about what someone would pay for the “bond”.
3. If any valuation of an asset held by a lender would be affected by lower appraisals for similar properties, it would be completed foreclosures–aka REO.
ANON, So what are you telling me?
Jason:
That I have no idea why BofA would use an obviously (I think) out of whack appraisal for your loan, but it’s unlikely for any “hidden” reasons that Bob suggested, unless BofA (or LaSalle or C’wide as BofA units or future units) owns or is nearing ownership of other units in your building.
Even then, it wouldn’t really help, because “market” means market–i.e., what you paid, not the appraised value (which is closer to being the “model”). Enjoy the wacky number and try to get a HELOC up to 80% of the “value”–about $65k–which you can use to fund your kitchen and other house stuff. Just don’t spend it on hookers and blow, as you will regret that eventually.
Anon,
My apologies. I thought CMBS was collateralized mortgage backed securities. However I suspect the banks aren’t marking their portfolio of RMBS to market these days. Their defense for not doing so could be a litany of excuses (disagreement with overall market, lack of resources, etc.)
But lets say BofA owns several RMBS comprised of comparable properties to this one, maybe even in the same building. Lets say the unit right above this one is one of those with a 310k loan on it that hasn’t been marked to market. Well if BofA appraises Jason’s unit for 250k do they really have any excuse at all for not marking their comparable properties embedded in the RMBS to market? At that point they would have no choice as by their own admission via appraisal the market has declined.
No hookers and blow? What else am I going to do with my time in Uptown? 😉
Jason,
I’ve bought two residences and I’ve never gotten the bank to cover my closing costs. What’s your secret? How do I get in on this action?
It was just a crazy deal that bank of america was doing.
Bob:
No apologies necessary, just like to clarify the alphabet soup when possible.
The reason that the appraisal of a property doesn’t matter to the value of the MBS is that the MBS is a collection of mortgages which retain their face amounts unless paid-off, foreclosed or re-negotiated. So long as the mortgages have not been foreclosed (or paid off), the mortgage is in the MBS (even if not performing). Once there is a foreclosure, then the mortgage is satisfied and out of the MBS and if the bank took title to the property, then the value of comps might present a problem for the valuation of their REO.
HA!
Just for the hell of it, I applied for a HELOC based on the aprraisal price and got it. Bring on the hookers and blow Anon!! 😉
That’s good news for housing bears; it would then seem that buyers less savvy than Jason can continue to borrow themselves upside down.
Jason:
Just let us know when to come over. I’ll bring the mirrors and razor blades.
I stand corrected, then! This is why I have zero sympathy for the banks as they continue their massive writedowns and their share prices plummet. They are still engaging in ridiculous bubble-era business practices.
In fact it wasn’t until yesterday that Wachovia stopped originating option-ARMs. Hard to feel bad for them that they kept throwing money away for months longer than it took the layman to realize.
Jason got this deal because bankers don’t do rehabs. Otherwise they would’ve tried holding onto this unit as long as possible: months..years until bank mgt is replaced and the new guy has a mandate to uncook the books.
Well, I think they view me as pretty low risk, if that makes a difference.
Hey,
I broke through that back wall in the kitchen and found out there was another 18 inches behind the drywall……
I’ll keep sending you guys random updates.
Excellent news Jason. Keep updating us! And we want pictures when you’re done.