If Investors Can’t Buy, What Does That Do To Prices? A 1-Bedroom Loft At 3150 N. Sheffield In Lakeview
It’s been nearly 4 years since we chattered about a 1-bedroom loft in The Vic Lofts at 3150 N. Sheffield in Lakeview.
A lot has changed in the building with pricing on the units since 2009.
This 1-bedroom loft on the 5th floor has a cement ceiling and central air.
The building was converted in 2005 and the kitchen has finishes from that era including maple looking cabinets and black appliances.
There is no washer/dryer in the unit or deeded parking but you can rent parking in the building for $75 a month.
This unit is a short sale.
The listing says “no investors” and that the building is FHA approved.
On the market since August 2012, it has been reduced about 21% in that time and is now listed at $159,000.
If that seems cheap to you, another 1-bedroom loft on the fifth floor, Unit #511, which was 650 square feet. sold in October for $148,000. See the pics here.
If an investor can’t buy a 1-bedroom condo unit, does that mean the prices on the distress units go even lower?
Joseph Chiappetta at Baird & Warner has the listing. See the pictures here.
Unit #502: 1 bedroom, 1 bath, no square footage listed
- Sold in October 2005 for $250,000
- Originally listed in August 2012 for $199,000
- Reduced
- Currently listed as a “short sale” for $159,000
- Assessments of $280 a month (includes cable)
- Taxes of $2843
- Central Air
- No washer/dryer in the unit- coin laundry in the building
- Rental parking for $75 a month in the building
- Bedroom: 12×10
I suspect associations are going to have to reconsider the limited or no rentals policy if they want to void short sales and/or fore closures in their buildings. I get that there hands are somewhat tied by FHA rules on percentage of rental in a building, but what choice will they have when push comes to shove?
What exactly does “OWNER OCCUPANTS ONLY, NO INVESTORS” mean? Does that mean there are no (more) rentals allowed? What is to stop someone from buying it, moving in for 3 months, then moving out and renting it? To me “no investors” has different implications than “no rentals”. Even someone who would want to live in it for the time being could be future handcuffed by no rentals if the owner wants to move out in a few years.
Also, -$100k for being directly across the street from Big Shitty Tap. Might be a great location to rent if you are 22-23, but I can’t imagine commiting to living there long enough for buying to make sense. At any price.
I have a great big shitty tap story but I won’t share it with you guys, maybe I will at Groove’s BBQ this summer?
“What is to stop someone from buying it, moving in for 3 months, then moving out and renting it?”
It’s called: the condo board.
If there is a rental limit, there is a rental limit. Violate it at your own risk.
How do you think the building got FHA approval? FHA only allows a certain amount of rentals.
Am I the only person watching the insane revolving door of renter after renter getting evicted? I’ve had four neighbors in the last year just in the unit across the hall. One moved his stuff out on a weekend, 2 moved out in the middle of the night. The unit is rented out within the next month each time.
How long before that “landlord” is toast? Is this happening anywhere else? Do the accidental landlords in my building just not understand how to do a proper credit check, or is something more insidious at play?
Is there hell to be wrought from “investors” buying up these buildings (well, not this one) getting ruined by the reality of post college 40k kids not being able to afford 1600 – 2000 a month 1BD/1BR’s?
We all know that rentals and are getting snapped up like crazy. Is that because there is a constant stream of revolving door evictiees that are renting up the available inventory from desperate landlords that are taking anyone (credit history be damned) in the hope of any stream of income?
Might this help explain why more buildings are instituting “no investor” clauses?
E-LP, if the “insane revolving door of renter after renter” is becoming a problem, the condo board can put into effect higher move-in/move-out fees which should mitigate the problem to some degree. These fees can be assessed to the owner, in case the renters skip on the move-out fees. Won’t eliminate the problem but will help.
Unfortunately, ever since both the housing and banking meltdowns, it’s the banks that will not approve mortgages to potential buyers if more than 20% of a building is rentals. The theory being that renters tend not to take care of properties as much as owners and, as a result, the value of the building as a whole will drop. Some can argue that logic, but that’s the primary reasons behind the recent “no investor” or “owner occupied” policies.
Kilgore,
The percentage is 50% rentals. We are at 35% rentals and there are have been no issues with financing in our building.
“but that’s the primary reasons behind the recent “no investor” or “owner occupied” policies.”
Kilgore, those policies aren’t new. It was always like this before the housing bubble, in that long forgotten time when condo loan defaults were low. Throwing out lending standards on condos was a bubble necessity. It didn’t work out so well for many, as the tsunami of condo defaults proved. Regardless, I fully expect the govt to push more lenient standards once again since attempting to keep the housing bubble inflated is our government’s top priority for the ponziconomy. Does anyone really believe that ongoing housing market manipulations and the resultant distortions will end well?
“The percentage is 50% rentals.”
Twice the historical rate. We’ll see how this works out as shadow inventory and new construction are added and rents decline. The debt sellers and fee collectors are winners, of course. I’m not so sure about the future taxpayers that are guaranteeing nearly all of these loans.
Rental percentages should not exceed 30%. Technically it is 50%, however, there are some very large lenders that overlay and won’t allow more than 30%. The guidelines keep changing though, so it is hard to keep up. I believe now though that the rental percentage doesn’t matter when the buyer is buying as a primary residence, but does matter if the buyer is an investor.
The bigger issue that I have seen lately is when the ownership concentration exceeds 10%. If any one person owns more than 10% of the development (in a > 10 unit development) it will be a deal killer. So if you have 10 units and one of your neighbors decides to buy a second unit, that person will own 20% of the development and thus make the development nonwarrantable for Fannie/Freddie.
“The bigger issue that I have seen lately ”
Too funny, the “bigger issue” to a debt seller is the one that restricts his income more in the short term.
“thus make the development nonwarrantable for Fannie/Freddie.”
Why does the govt have to guarantee every loan? The debt sellers always claim confidence in the ability of their clients to pay back debt (while collecting their fees upfront,) so why won’t they lend their own money without taxpayer guarantees?
” why won’t they lend their own money without taxpayer guarantees?”
They’d be happy too, but no borrower is willing to pay 150 (or 450) bps for the privilege. And the one that is is a bad credit risk, so it’d be more like 750 or 1000.
” And the one that is is a bad credit risk, so it’d be more like 750 or 1000.”
In some circles they call interest rates like that ‘predatory lending’.
50%? Wow, that’s good news. That’s for clearing that up.
“And the one that is is a bad credit risk, so it’d be more like 750 or 1000.”
obama isn’t going to let his low-information and moocher voters have to deal with that kind of blow to their self-esteem. Equality bitchez! Give me a fist bump!
Uh, missing the point, the both of youz.
” anon (tfo) (December 27, 2012, 3:31 pm)
Uh, missing the point, the both of youz.”
I can’t speak for helmet, but I get the point. Absent government interference, there is no mortgage market. but it’s the same government interference that has created a mortgage market where 7.5% or 10% plus interest rates to accommodate for credit risk is called predatory lending aka countrywide etc where they charged higher interest rates to minorities in bad areas with poor credit risks.
yes those opposed to that policy were claimed to be racist… here is an example our government in all its stupid glory
https://www.youtube.com/watch?v=IyqYY72PeRM
“I get the point. Absent government interference, there is no mortgage market.”
Nah, not my point, either.
well then anon(tfo) nobody who got your point cared to comment, assuming anybody got your point at all! sorry, try again!
The American home mortgage market has, for all practical purposes, become nationalized since the 2008 financial meltdown, according to an analysis by ProPublica, the non-profit investigative journalism project.
The takeover, without which the housing market could barely function, has occurred against a backdrop of little planning or public discussion.
In fact, nine out of every 10 new mortgages are now backed by the U.S. taxpayer, up from three in 10 in 2006.
ProPublica: Govt Now Runs the US Mortgage Marketplace
http://www.moneynews.com/StreetTalk/mortgage-nationalization-Freddie-Fannie/2012/12/21/id/468658?s=al&promo_code=113F0-1#ixzz2GNdGGE7X