Foreclosure Alert: Another 3-Bedroom in The Sterling: 345 N. LaSalle
Another foreclosure has appeared in The Sterling, at 345 N. LaSalle, in River North.
This one is another 3-bedroom. There are no interior pictures available.
Unit #3902: 3 bedrooms, 2 baths, no square footage listed
- Sold in January 2005 for $827,000
- Currently listed for $389,900 (parking is rental only)
- Assessments of $837 a month
- Taxes of $9,500
- Applebrook Realty, Inc. has the listing
We have a comp from another 02 unit that recently sold.
Unit #3802:
- Sold in December 2004 for $842,500
- Sold in June 2008 for $400,000
The bank isn’t messing around with those who only want to look. The listing states that “prequal must accompany all offers- no exceptions!”
Prequalification is different from preapproval. Prequalification means a bank has actually confirmed that it would give you the loan for this particular unit.
From what I’m hearing, prequalification is becoming more common. A sign of the times?
“Prequalification is different from preapproval. Prequalification means a bank has actually confirmed that it would give you the loan for this particular unit.”
Has the terminology drifted? It used to be that prequal meant the bank had squinted at you and said “breathing — ok”, while preapproval meant that they had actually run a credit check and collected some documents.
some deep thoughts (not really) from the sidelines….
1. it’ll take a brave (or stupid) investor to bid on this as the moving season is ending. Definitely not a sure thing that carrying costs would be covered quickly after closing.
2. a genuine live-in homeowner should be skeptical of catching a falling knife and dealing with the condo board issues of a building where a lot of people’s equity have turned negative.
my 1 cent opinion, stay away….unless you’re putting down a plus-sized downpayment and will (not plan to) stay for many, many years.
WOW IS THAT A PRICE DROP OR WHAT!!!
I wonder if the developers here ran a scam similar to that Bucktown mcmansion play that was covered a couple months ago. find buyers financing, who then never intend to make a payment. Guess it’s more likely that they just ran the “we’ll rent it temporarily for you , for a lot more than it’s worth to make this look like a reasonable price.”
Yes, Jason, this is a PRICE DROP, aand a harbinger of things to come. Yes, the Sterling has become a disreputable building, a real bust of a development, but the rollback is just starting with the most marginal properties.
Get ready for similar, or worse, rollbacks in the South Loop. As one real estate blogger put it, the game is nowhere over- we are now only in the second inning of the worst real estate and financial bust in the history of the world.
There is a terminology problem here. Pre-approval is actually more stringent and a better indication of someone’s real ability to get the loan. I always get my buyers pre-approved.
BTW, no interior pictures, in my experience, means that the place is a disaster.
Good thing I got my place for half of what it sold for in 2006.
The drop in price is probably a scam on the developer and appraiser. Would not be surprised is this was a developer held unit the first time. As noted on this site, this happened at 1717 S. Prairie and I believe someone wound up in FPMIAP (Federal Pound Me In The Azz Prison) for that (the appraisor or the agent, not sure which)
“The drop in price is probably a scam on the developer and appraiser.”
The initial price doesn’t seem horribly out of line for 2005. Something in the ballpark of $400/sqft for a high floor newly-converted (and remodeled?) building on the river. That price is more believable when the developer is promising to pay your taxes, assessment, and guaranteed rent for 2 years (I believe that this was an American Invsco 2-2-2 building).
As has been noted repeatedly, Invsco again. (Where’s the “e”? Did they sell it and guarantee rental income from it for two years?).
These prices are okay, but I wouldn’t call them great, especially with $10k+ per year in assessments and the hassle of protesting your taxes–the homeowners’ exemption won’t make that $9500 reasonable enough.
#3902 is almost $1700/month BEFORE P+I (or parking, for that matter). Which means, if you were buying as an investment, you’d need about $3800/month in rent to breakeven. Not to mention the down payment. Based on earlier posts about this building, there’s no chance this rents for anything near $3800.
Or, if you don’t like looking at it that way, answer this–would you pay $3700/month to live there? If so, would you put up $80k for the privilege?
“Something in the ballpark of $400/sqft for a high floor newly-converted (and remodeled?) building on the river”
I just double-checked my recollection–Invsco purchased the building when it was under construction–it was never occupied as an apartment building. See www DOT plaza440condos DOT com/News/realty_5_12.htm for a story about the initial marketing in 2001, with prices starting in the 160s. And another at: www DOT plaza440condos DOT com/News/newhomes_9_27.htm re-pixels the Tribune new homes column noting 3-br base prices “from $617,000 to $716,000”.
Has anyone been involved with a sale at 2520 Lincoln Park West or know how sales are going there. Americian Invesco is doing the marketing.
Gary:
American Invsco is no longer doing the marketing on that building.
Here’s the article from Crain’s from June 2008:
http://www.chicagobusiness.com/cgi-bin/news.pl?id=29937
Has anyone been privy to whats actually going on at Sterling’s condo board meetings? We speculate about potential special assessments but knowing the facts about whats going on in there would be great.
If they had cash flow problems they would have started with the special assessments already…wouldnt they?
HO Associations I have been part of in the past published their minutes to homeowners and smart condo buyers request these with their offers.
T.J.:
We’ve had a few Sterling owners post here in the past. There recently was a special assessment to repair the facade.
Am a newbee to this board and to market of Chicago
Assuming it sells for 389, can’t the buyer petition the city for adjusting the taxes in alignment with sale prices (reference 3802 at 400K)
Is this a long, tedious process OR I am thinking too optimistic…..what do the pros say?
Gary-
“BTW, no interior pictures, in my experience, means that the place is a disaster.”
Keep at it Gary… This unit was in perfect shape and was a steel. It received 8 offers in 48 hours and the new owner will be able to sell it in a year or 2 for well over $500k. It propbaly sold for around $400k. Banks dumping properties well below FMV is not a determination of current value. It is not normal for any property to receive 8 offers in 2 days unless the property is way under valued.
Someone just made over $100k buying a property. Too bad my offer was not accepted. I guess $5k over ask does not quite do it anymore.
Opportunity is everywhere if you get off your butts and apply yourself.
Sabrina “T.J.:
We’ve had a few Sterling owners post here in the past. There recently was a special assessment to repair the facade.
”
That was over 1 year ago Sabrina… check your facts before you try and scare people. The building is healthy and they are working on finally getting past the investor fall out.
Steve:
Foreclosures continue- nearly every week in the building. Or have you just missed seeing those?
I’m not trying to “scare” people. The scaffolding was still up just a few weeks ago to do the facade repairs. (Don’t know if it is still up- I haven’t been past the building recently.)
Anyone buying right now (in any condo building) should do their own homework by reading all the condo board meeting minutes.
The building is a great value at these foreclosed prices. Nothing is wrong with the bui,ding ohter than a single investor blowing out of 40 units. They over paid in 2005 but $390k for a 3 nedroom with lake views from every room is pretty darn nice.
Steve,
This is one time when I would agree with you. For the long run (once all the foreclosure and assessment issues are resolved), this is going to be a pretty good buy! The location is great, and if the views are great, with the unit itself in good shape – good for the buyer.
it sounds like a good deal. I’m curious about the facade repairs on a pretty much brand new building. was that a one time issue or will more problems arise?
The views were the lake from every room. Unit was in perfect shape. Paint and move in.
That was a free $100k in equity and a pretty darn place to live in.
do you know the answer about the facade repair problem?
I do. Parts of the facde were cracking and the building was completely repaired. There was a special assessment to pay the repairs. The work was started last year and was completed this summer.
Nothing else going on according to the association condo association. Their biggest issue is controlling the investor that dumped 40 units on the foreclosure list.
“””hello on August 25th, 2008 at 10:54 am
some deep thoughts (not really) from the sidelines….
1. it’ll take a brave (or stupid) investor to bid on this as the moving season is ending. Definitely not a sure thing that carrying costs would be covered quickly after closing.
2. a genuine live-in homeowner should be skeptical of catching a falling knife and dealing with the condo board issues of a building where a lot of people’s equity have turned negative.
my 1 cent opinion, stay away….unless you’re putting down a plus-sized downpayment and will (not plan to) stay for many, many years.
“””
Stupid is as stupid does!
The real tragedy in this building are the non-investor owners (how many are there? It’s likely a low percentage.) But for the few that there are- any kind of equity has been wiped out and they’ll take a loss when they sell because of the price collapse in the building.
THOSE are the people who I feel the worst for. It’s a nightmare in any of these buildings with massive foreclosures because no “regular” owner can compete with the listing prices the banks are putting out there.
Also- the building has an enormous amount of rentals. It was originally built as a rental building and converted because of the condo boom by American Invsco. That means there are tons of 1-bedroom units- many filled by renters.
How long will it take the building to work through all of these issues? It’s unclear. It has to hit bottom still- and with foreclosures still appearing for auction- it appears it’s not any time soon.
That being said- the number of foreclosures HAS slowed- because, after all, there are only so many units in the building! Once you get 30% to 40% of the building being foreclosed on- it has to end at some point.
Steve- regardless of whom the foreclosures are from (1 investor, 5 investors, 15 investors)- they’re happening.
Similar to other buildings with these massive amounts of foreclosures like 10 E. Ontario. It is destroying the sales prices in the building. “Real” owners will be crushed by this if they need to sell.
Sabrina – What you are missing is that real owners paid WAY TOO MUCH for these units back in 2005. $800k for $1,500 sq ft? That is crazy money and I don’t feel sorry for them at all. They purchased something that was over priced and now they will have to pay. They could have really used a knowledgeble real estate agent to help them avoid this mistake. While $800k was too much, $389k is way too little. The unit is worth $350 per sq ft or about $500k once the dust settles. In the mean time you can ealisy cover your monthly housing expense by renting this unit out. The building across the street (identical features) just sold out at around $350 – $400 per sq ft.
The building across the street? You mean 400 N. LaSalle?
That isn’t sold out. The last time I checked, they had sold only about 70% of the units (despite marketing them for several years.)
Did the developer sell a chunk of them to an investor group or something? Do tell.
And it’s not “identical features.” Have you been in both buildings? You’d see the differences right away (just visually.)
By the way- about 400 N. LaSalle- they’re asking anywhere from $325,000 to $399,000 for 850 square foot one bedrooms there (without parking included).
Good luck with that!
I stand corrected. A friend told me the building across the street is identical and sold out. I guess it always helps to see it first hand.
I still don;t feel sorry for the people who bought at the top. What were they thinking?
So if this building still has a bunch of units in foreclosure who is paying the assessments on those units and how far behind is the association on collecting them?
Gary – The association is fine and they have plenty of cash. When the bank sells the unit they have to pay all due assessments and late fees.
Gary – What type of brokerage to do have? You must be all rentals…
🙂 Well, that’s the quandary for me. I don’t do rentals. Can’t make any money on them. I actually focus on buying and selling. If people want to buy I help them. But many times I have renters come to me trying to buy for the same monthly payment and I have to point out to them that they are going to have to downgrade. They still want to buy because that’s the American dream so I help them. Now, I agree that in the long run buying makes sense but so many people aren’t in this for the long run.
As for assessments, if a homeowner is behind on the assessments before the bank takes over it’s my understanding that the association is SOL on those payments unless they can take effective legal action.
Oh…one other thing, Steve, now that I’ve told you what I do why don’t you tell me what you do? 🙂 I’m relatively new to this blog so if you’ve shared that in the past I missed it.
It is my understanding that a very substantial special assessment was levied on this building a year or so ago. That, to me, is an indication that the association is not fine.
As this is owned heavily by investors, and given the above, I’m guessing the maintenance doesn’t build a reasonable reserve. Instead they levy special assessments when needed, in order to make the maint seem more attractive to buyers.
And if enough people are paying late, which seems very likely, it can eventually break the association’s bank, so to speak.
I’d be wary buying into this building. Do your research.
Steve, if you got outbid on this condo why are you talking the building up so much? You should trashtalk it so that maybe your $5k over ask bid is accepted next time. Which, based on building history, should be any day now.
I saw this unit and it was really nice. Condition is almost perfect! I made an offer for list price and lost the bid. I believe it sold for over 400k easy. Unfortunately, there isn’t any new 3bedrooms on the LIS pending last time I checked and most 2bd-2bths in the building have already foreclosed.