Foreclosure Alert: The Single Family Lakeview Home: 2823 N. Racine
This 3-bedroom house at 2823 N. Racine in Lakeview recently came on the market.
It’s bank-owned and now listed for $195,200 under the 2003 purchase price.
Built in 1888, the house doesn’t have central air but appears to have at least 1-car parking.
Is this cheap enough to lure buyers?
Jason Shapiro at Rising Realty LLC has the listing. See the pictures here.
2823 N. Racine: 3 bedrooms, 2 baths, 1536 square feet
- Sold in April 1998 for $355,000
- Sold in May 2003 for $747,000
- Bank owned as of March 2009
- Currently listed for $551,800
- Taxes of $9289
- Listing says there is 1-car assigned parking
- No central air
- Bedroom #1: 16×12
- Bedroom #2: 10×11
- Bedroom #3: 13×13
- Living room: 15×14
- Kitchen: 10×9
- Dining room: 18×10
Am I wrong for thinking this is an ok deal?? That gas station on the corner is for sale right now to convert into resi or commercial so that’s a future positive right?
I like the fact that a $550K property only comes with four photos, none of which are very compelling.
Would the tax be re-assesed?
Agree on the pictures – what are these people thinking???
Using a straight line appriciation from 1998 to 2003, this would be price arounf Oct 2001 prices. This would have easily sold then for that price.
As for the lack of central air. The listing states gas-forced heat and I can see some blurry vents in the blurry pics. If there is ductwork adding A/C is not that difficult or costly.
Jumbo finacing is diffucult and everyone wants a discount. Drop it to $460 and I think it will draw some interest. $460 (using the straight line appriciation) is also close to the 1999 value that was mention in the previous threads.
“That gas station on the corner is for sale right now to convert into resi or commercial ”
I’ve never heard of a gas station lot being converted to residential. Something about underground tanks and contamination.
As far as lack of adequate marketing: this is par for the course for foreclosures. For some reason banks and agents don’t feel the need to market foreclosures like a regular property, I have no idea why.
I think its a fair ask price as its a great location and this foreclosure doesn’t appear to be trashed and I’d expect this to go under contract within 10% of ask price within 90 days.
500k and huge taxes? For a little house with no garage and little curb appeal and standard finishes. I’d rather have a 2000+ sq ft loft with indoor parking.
I’m lollerskating at the 2003 price. WTF?!
Hope they HELOCed.
Papu, The current assessment indicates a market value of $745,520 (at 10%.) A reassessment only occurs every 3 years in Cook County unless substantial $ improvements have been made in the intervening years and are reflected on building permits. A sale does not trigger a reassessment.
Everything in Chicago will be reassessed this year as of 1/1/09. In my estimation this will not be reduced more than 5% by the assessor in the reassessment, so anyone who buys for less will likely have to appeal and prove their distressed purchase is market value.
Bob,
The corner of Southport and Addison (Julius Meinl & condo development) use to be the site of a gas station, not a quick process
I can’t believe some 1500sqft POS cottage is attempting to sell for 550k+
What I can’t believe is that someone bought this dump for 750k in 2003!
“I can’t believe some 1500sqft POS cottage is attempting to sell for 550k+”
Oh please come on now. Its not as ridonkulous as these similarly priced cottages in far West LV/Roscoe Village that aren’t convenient to public transit that have been featured on here.
At least this one is a prime location. 1700 block of west wellington isn’t so prime, in fact it blows.
“I’ve never heard of a gas station lot being converted to residential.”
Happens plenty. Hell, there are 4 or 5 former gas stations in River North converted in the past 10 years. Also many more further north that I have less specific recollection of.
Something is v. weird about this listing–the aerials clearly show a 2-car garage and 1536 SF must be the assessor’s listed total, as I can’t imagine it’s that small based on the footprint and the (obvious from streetview) basement and large dormers.
If I were looking for this size house, I would consider this one. inspection would be key, tho.
Attendance area school is Agassiz. Seems to be getting better (and I would expect it to continue), tho I wouldn’t want older kids there *now*.
Re: gas station converted to residential
There was a gas station at the northeast corner of Addison and Southport within the last 10 years, and that it is now a condo building and Julis Meinl.
Jinx, buy me a Coke, anon(tfo)!
Okay should’ve qualified: never heard of a gas station being converted to an SFH. I suppose its possible too if land values are high enough to go ahead and do the decontamination.
I do know in lower cost of living cities and in the ‘burbs here former gas station lots tend to sit there ad infinitum.
If you are laughing at the 2003 price, you will find it hilarious what Countrywide “paid” for it in 2005. Not to mention what Bank One/JP Morgan Chase got for their piece of the action.
5/12/03 purchased for $747,000
5/16/03 mortage for $597,600 to MERS
7/18/03 mortgage for $112,000 to Nat’l City
10/27/03 mortgage for $250,000 to Bank One
10/26/05 subordination from JP Morgan Chase to Coutrywide of $250,000 mortgage to Bank One
11/3/05 mortgage for $862,500 to MERS
11/21/05 release of $112,000 mortgage to Nat’l City
11/22/05 release of $597,600 mortgage to MERS
11/7/07 lis pendens filed by Countrywide
3/19/09 deed to Countrywide
There is no release filed for the Bank One mortgage, and the subordination agreement indicates it likely stayed as a second lien position. The former owner was foreclosed upon, but appears to have potentially pocketed over $350,000 in refi monies before that “disaster” struck.
I think we have stumbled upon the secret to making money on a bubble-era purchase. This 2003 buyer “made” money.
“The former owner was foreclosed upon, but appears to have potentially pocketed over $350,000 in refi monies before that “disaster” struck.”
Well, maybe. Depends on how much they (over)spent on the reno and how much they actually drew on the $250k LOC.
What’s astounding is that it ever appraised for $1,112,500.
“potentially pocketed”, anon.
The appraisal isn’t astounding since Countrywide was involved and JP Morgan was willing to subordinate. I’m sure the subordination was all Countrywide needed to only be concerned with maintaining the $862,500 value.
This type of crap happened in California and Florida a lot. That’s how you would get these clowns that lived in houses that cost 20x their annual income, they’d just heloc the place and live off that money.
“The appraisal isn’t astounding since Countrywide was involved and JP Morgan was willing to subordinate.”
If it had been CW in the 2d position, I wouldn’t find it astounding.
JPM subordinating $250k in 10-05 w/o an appraisal for $1.1mm *is* astounding to me. Unless there were modifications (ie, a reduction) to the LOC which weren’t recorded (or were reflected in the Subord, which could be a 3-party doc). Or the borrower was a substantial banking client (unlikely).
I meant that Countrywide procuring an appraisal for $1.1M wasn’t astounding. JP Morgan falling for it? Why not? They are hardly a model of sound banking practices.
“There was a gas station at the northeast corner of Addison and Southport within the last 10 years, and that it is now a condo building and Julis Meinl.”
That’s the perfect example.
Another couple unbuilt ones–the mom&pop station at Lincoln and Berteau that’s been closed for 4-5 years and had a sign for the “green” condo building coming soon for 2 years and the former Shell/current Cubs parking at IP & Sheridan being similarly marketed. If they can build on the radioactive sites in southern Streeterville, they can build anywhere.
But it’s certainly true that suburban stations usually just sit vacant.
As to why not SFHs, it’s b/c usually the gas station is on a major-ish intersection. Not too many mid-block gas stations in R-1 zones.
“JP Morgan falling for it? Why not? They are hardly a model of sound banking practices.”
By comparison, they were stalwarts of prudent underwriting.
Yeah the Chicago spire and DuSable park is/was being built on top of a radioactive Thorium site from an old light bulb factory that was there.
PS: In real dollars, the ’98 purchase price is $465k. If nothing was stripped out before/after the foreclosure, $85k for the reno might not be unreasonable. $550k is basically a 1998 real dollar price.
“By comparison, they were stalwarts of prudent underwriting.”
Yes, and LP is performing better than Englewood.
“Yeah the Chicago spire and DuSable park is/was being built on top of a radioactive Thorium site from an old light bulb factory that was there.”
Hell, whatever went up east of the Time/Life building, too. When that was a parking lot, it was shut down b/c the attendant got cancer from the radiation. That’s why that almost-full-block parking lot was chained off for the better part of a decade.
“LP is performing better than Englewood”
Is that based on trend in months of supply, or trend in median price?
Better: it’s based on Steveo’s observations.
“Is that based on trend in months of supply, or trend in median price?”
“Performing better” as in the ability to stay in character under duress.
Think Wile E Coyote before looking down.
Gas stations are famous for environmental problems and leaking underground tanks. You don’t seem to hear the term “Superfund” like you used to in the Nineties.
Do residential developers ever do soils samples, like the commercial developers are required to (by banks)?
I’m not sure why anybody thinks this is a great location. You’re going to: (1) listen to that intersection; (2) smell Gino’s pizza; (3) have drunks leaving the Lincoln Ave. bars urinating in your yard/alley. I would personally rank this is one of the least desirable places for someone more than 5 years out of college to buy a house.
“Gas stations are famous for environmental problems and leaking underground tanks.”
WERE famous. It’s been a couple of decades since USTs monitoring and maintenance and construction were dramatically improved. I doubt you’d find an operating gas station in Illinois with a current problem.
“You don’t seem to hear the term “Superfund” like you used to in the Nineties.”
Because (1) less funding, (2) most of the sites have been cleaned up, (3) post-1974 there have been many, many fewer dumping sites and (4) gas stations rarely rose to Superfund levels in any case.
“Do residential developers ever do soils samples, like the commercial developers are required to (by banks)?”
Uh, yes?
Who do you think funds the construction of residential developments and who do you think is the scarier potential plaintiff if the bank winds up in title thru foreclosure?
This is not a bad price. Rising Realty only does foreclosures and they have hundreds of them. Foreclosure agents do not take good pictures, if they take them at all, it doesn’t make economic sense to them because they don’t receive normal commissions and they are a listing factory, they have hundreds of listings all over the city. This home will probably sell at asking or above seeing as it doesn’t look like a tear down, and most single families in this area at 550k are pretty much tear downs.
I do not understand how you can buy the house and not own the garage. Is it listed as a separate property or something?
Gas station sites are notoriously difficult to sell for redevelopment. Gas stations, and other land-uses with underground fuel storage tanks, are prone to environmental problems related to fuel contamination of soils which require formal, extensive, and expensive monitored remediation. IEPA must be involved, approving both the remediation plan and issuing a “clean” regulatory letter once remediation is satisfactorily completed. Environmental inspection, remediation plan approval, and actual remediation can take years. Process certainly is not a 12-month process. Buyers are likely to avoid these sites, unless there are mitigating circumstances – such as one-of-a-kind site, incredibly low land pricing, and/or extremely motivated purchaser w/no timeline.
Remediation is almost always obligation of seller, with “clean” letter a prerequisite for closing, because of the significant liability issues. Buyer is liable for all environmental-related issues and costs post-closing, unless purchase contract explicitly obligates seller to indemnify and “make whole” buyer for these type of costs.
Talk about “redeveloping gas station” sounds like baseless speculation, given current real estate market conditions.
Thorium-related environmental contamination problems bankrupted Ray Chin’s high-rise development in Steeterville (Dominicks location). Crains covered the story.
Prudent developers due Phase I environmental investigations (environmental history of site and adjacent neighborhood, and site inspection) of acquisition sites, and Phase II (soil-sampling and testing) environmental investigations if so warranted, with their purchase contracts allowing purchaser to exit purchase contract (w/earnest money refunded) if environmental conditions are of concern. I’ve seen plenty of contract negotiations stymied by environmental concerns here in Chicago area.
Actually, while modern gas stations dont tend to have problems, sites with long standing old time gas stations do, that is why the Cadilac closed, the owner drank away his profits and he couldnt sell the land since its so polluted
the land is worth more than $550k at this location.
“the land is worth more than $550k at this location.”
Not now it isn’t. Think anyone would buy a $1.2mm+ house at this location?
$550k is not land value here. You would have to sell a house for $1.5+ for it to be remotely near $550k in land. And, $1.5+ will not happen on Racine. Maybe on a side street, but not Racine.
how is that determined, the price of the house you’d need to sell in relation to the price of the land? is there just a standard back of the envelope ratio that most developers use?
“how is that determined, the price of the house you’d need to sell in relation to the price of the land? is there just a standard back of the envelope ratio that most developers use?”
Yep. Finished house price should be ~3x land price, at least in the city, at least in the past ~15 years. My $1.2mm was presuming someone who wanted to keep busy sacrificing margin and building something that might sell v. never sell (ie $1.5mm+ on this block).
SOLD! Over the ask even on a cash deal.
This house just came back on the market. The first contract must have fallen through.
Let’s see how long it stays on the market this time.
Probably fell through after the inspection. Better look really, really close before buying a 121 year old house “as is.”
probably means the bank is in denial, they won’t discount the place enough with repair cost to make it worth the work.
And if it does need major repairs, the previous owner did probably diverted the funds for their pleasure.
Bank is guilt of fraud (they even defrauded each other), the citizens and government, should seize the bank.
I would say the land should be worth at least 400K, the bldg next to this one seems taller. Does anybody know what it is zone as? it could fit a 3 flat. Problem is people aren’t building/buying/speculvesting now.