Get a 1-Bedroom For 61% Under the 2005 Price At 2000 N. Lincoln Park West in Lincoln Park
We’ve chattered about this vintage mid-rise building at 2000 N. Lincoln Park West in Lincoln Park several times since CribChatter began in 2007.
It was converted from apartments into condos in 2005, near the height of the real estate market.
This 1-bedroom on the 12th floor, with lake views, was listed in November 2011 but recently re-listed for about 61% under the 2005 price.
It appears to be in distress but the public record doesn’t indicate that it is yet bank owned. A lis pendens foreclosure was filed in April 2010.
Although no square footage is listed, this is one of the larger one bedrooms as it has a separate dining room.
From the pictures, it appears the kitchen and bathroom are intact.
The kitchen has stainless steel appliances and granite counter tops.
There is no central air, washer/dryer in the unit or parking.
I’ve been told in the agent’s remarks on this listing on the MLS it says: “building has high tenant ratio, great investment opportunity, will not qualify for financing, cash only.”
The HOAs run $630 a month and the taxes are another $200 a month on top of that.
Does this unit make investment sense at this price?
Paul Ambrogio at Town & Country has the listing. See the pictures here.
Unit #1203: 1 bedroom, 1 bath, no square footage listed
- Sold in April 2005 for $375,000
- Lis pendens foreclosure filed in April 2010
- Originally listed in November 2011 (I couldn’t find a listing price)
- Currently listed at $144,900
- Being sold “as-is”
- Assessments of $630 a month (includes gas and doorman)
- Taxes of $2623
- No central air
- No washer/dryer in the unit
- No parking
- Bedroom: 12×17
- Living room: 13×22
- Kitchen: 7×10
- Dining room: 9×11
Nope. With a guaranteed 850/monthly nut, no parking, no AC, no w/d, assume you are collecting 1500/month in rent (high as a 1 BR), means 650/month net, maybe a 5% rate of return. Anytime you have such a high proportion of the rental income going to assessments/taxes, and no ability to have any say in the condo board… and you know that Chicago property taxes are eventually going to skyrocket to pay for the city’s unfunded pension costs, etc.,difficulties in selling 2-5 years out, I’ll take a pass…the units for investment I’ve been looking at are focused more on smaller buildings, or suburbs in more fiscally stable municipalities, with a minimum 8% ROI or at the very least (for houses) stuff that is on good lots that can be torn down and rebuilt in the future…
The unit, location and price are spectacular. I wonder if this will be a multiple offer situation (actually, cc may help it bc I know that I personally would have never otherwise looked at this unit – since I don’t like this building) but I am seriously thinking of calling and writing an offer today (w/o even seeing the unit). Think about it – you could easily rent the unit for 1500/month. Your expenses are 800/month – you will get 700/month on a 150k investment (that is roughly a 5.6%return) – and you know that the unit will be worth at least the mid 200s within a few years. It kind of is a no-brainer if you have cash….
hahahaha – I didn’t even see deeg’s post which states the exact opposite of what I posted. The one thing he/she doesn’t take into account is appreciation. condos in the suburb do NOT appreciate much (even in good markets). Another problem is tenants – different socioeconomic mix (even at the same price of a rental – say 1500- the suburban renter is going to be a serial renter or a small family with many other expenses while the city renter is likely a grad student or young professional) – translation – more risk of rent default in the suburbs. The third bad thing about suburban condos is that they don’t rent very fast – city condos rent VERY VERY fast. Right now there are waiting lists for rentals in the two buildings in which I own (and yes, they are american invesco buildings). my unit at 111 e chestnut went on the rental market and had 8-10 showings the first weekend with 4 offers (rental) that same day. It is crazy out there for rentals in good areas.
I re-read deeg’s post and he is talking about an 8% return on rental houses (not condos) in the burbs – I call BS on this. There are no “fiscally stable” burbs out there where you can get an 8% return on a rental house – unless you bought the house 20 years ago. There are several reasons for this:
1. expenses of a house are so many times that of a condo (think about it, roof/window/furnace/ac replacement. Over time this reduces your “8% ROI”.
2. suburban houses are difficult to rent out – they could be on the market for a couple of months (at least) which also reduces your “8% ROI”.
3. taxes in the burbs are EXTREMELY high compared to the rent you can get – and I am talking ALL suburbs (except oak brook and schaumburg where there are no real estate taxes).
CLIO, taxes are pretty low in Cary. Even lower in one of my places in Woodstock.
Also, really liking the parquet floors in this place!
Clio fails to get a thing right, yet again.
Building was a troubled condo association from the get-go.
And the Award goes to……………………..
“CLIO (April 30, 2012, 6:33 am)
and you know that the unit will be worth at least the mid 200s within a few years. ”
…..Speech Speech Speech speech!
Clio – I absolutely am taking into account appreciation and rentability. I own units in the city and in the suburbs, and have had little trouble renting either but the overhead costs on the Chicago ones have witnessed a much more rapid rate of increase (not to mention more regulatory pains in the a$$). There are a lot of people who don’t (or can’t) own who do not want to be in the city and are thrilled to be in the burbs. This includes older couples who have downsized, families, etc.
I do not see Chicago condos going through any kind of major appreciation in the next several years, not only due to shadow inventory, but also because I expect property taxes are going to continue to rise–a lot. That offsets any potential rental value increase and, again, the risk of insanity with the condo board. A 2-3 BR 1.5 ba 1950s house in the burbs that was not particularly well constructed, but still a decent rental, will have land appreciation value particularly as a tear-down in the inner-ring suburbs. And yes, you can get a lot of those cookie cutter houses cheaply, a lot are in foreclosures, and the rent-to-fixed-expenses cost is much better. You also ignore that you have control for the most part of whether and when to do capital improvements (furnace/roof/AC/windows) and tax benefits which you don’t have with a condo and assessments.
And yes, we are getting anywhere from an 8-12% ROI on our suburban investments, and no, we didn’t buy them 20 years ago. All purchased since the market started to tumble. Property taxes range in the 1500-2800/year mark. (Example: 2-flat bought for 190k, taxes 2800, rental income 24000, misc expenses/improvements 1200, ROI 10%). Our max ROI on a city rental investment is hovering around 7%, which I expect to get worse once the next round of property tax hikes goes through.
Thinking as a person who would actually live in the unit and have a modest salary to pay for said unit, or any 1bedrooms in general:
Assessments are too high for a one bedroom (in my very strong opinion) – couldn’t swallow spending an $200-$400 a month then a newer construction 1bdr which may have assessments between $250-$350 (excluding the luxury buildings of course). Would rather spend a little more on a newer unit with more modern amenities (AC/in unit washer-dryer) and have a bigger mortgage than a bigger assessment- you could write off more during during tax season.
I agree with clio that condos in metropolitan areas appreciate more than ones in the suburbs, but I do not think this particular unit is a smart buy, or will be worth over $200k any time soon.
“Property taxes range in the 1500-2800/year mark. (Example: 2-flat bought for 190k, taxes 2800, rental income 24000, misc expenses/improvements 1200, ROI 10%). Our max ROI on a city rental investment is hovering around 7%, which I expect to get worse once the next round of property tax hikes goes through.”
COMPLETE BS – such a property/scenario does NOT exist.
I have nothing constructive to add, but will say that seeing someone paid $375k for this place in 2005 does make me feel marginally better about my own foolish purchase during 2004 / 05. No parking, no air conditioning, high HOA fees … another building that should have stayed as rental apartments.
You sure can’t tell from the pictures what the so called views of lake and park are like? All I see is concrete and windows outside.
The ’03 units face directly North with a window that allows angled views east and west. So…. there is a park view if you stick your face to the window. I think most of the 1-bedroom units that have been on the market in the last couple of years have all been priced around here—so not a terrific deal. Other than that, the building is wonderful…. for renting. I can’t imagine what kind of bill the owners will get stuck with when they have to replace any of the aging infrastructure in the building… elevators, roof deck, heating system.
I have seen galleys on private aircraft wider than that kitchen!
There will always be some interest here for rental purposes. Mostly because of the location. The issue that I suspect will add difficulty for the Clio model is that there will be frequent turnover. I would suspect that the average tenant will last two years or less. That adds to cost and aggregation of being a landlord in this place.
The only way to offset that is to start with a slight rent premium for year one and then offer a declining rent for the second and third year. That will decrease high turnover and attract a better tenant. Our current one bedroom in the south loop is up for year two and she is quite happy to stay knowing that rent will go down this year. Every check has cleared and the place looks great so we are happy to keep her as well!
meant to say “cost and aggregation”
“meant to say “cost and aggregation””
Aggravation?
“the units for investment I’ve been looking at are focused more on smaller buildings, or suburbs in more fiscally stable municipalities, with a minimum 8% ROI or at the very least (for houses) stuff that is on good lots that can be torn down and rebuilt in the future…”
Clearly you don’t understand that a mathematically sound investment philosophy is still going to be rejected by the logan sq. hipster crowd because it involves the “suburbs”. Chicago’s die-hard city dwellers w/ kids and CHI RE investors love self-flagellation.
“rejected by the logan sq. hipster crowd ”
Clio, you’re moving up in the world!
Aggravation is typing the same word twice and missing the damn spell check “correction” that changed it to another word both times!
Used to live in one of these units. The kitchens are absolutely miniscule, and the units themselves are tiny. Great location, staff, and roof deck, but there are a ton of owners in this building in financial trouble — the assessments would scare me to death.
Makes sense as an in-town.
This is a great deal for the money, and the assessment is lower than I expected. Other one-bed units I’ve seen in this place have assessments over $800.
I’m really, really tempted. The location is suburb, and the location within the building is just great. It’s a lovely apartment in almost perfect condition, in a really beautiful old building fronting Lincoln Park.
I think it will sell here.
GS, that is the rub here… the number of defaults and delinquencies in this building. That could mean much higher assessments in not long.