Renovated 2-Flat in North Center: 2424 W. Belle Plaine
With real estate prices coming down, I know many of you are interested in becoming a landlord.
This 2-flat at 2424 W. Belle Plaine in North Center has been rehabbed with new kitchens and baths and is fully rented for $39,240 a year.
It’s been on the market since last July and has been reduced about $20,000.
Is this a good investment opportunity?
Anthony Klementzos at Dumas & Associates Realty has the listing. See more pictures here.
2424 W. Belle Plaine: 4 bedrooms, 3 baths, finished in-law unit, 2 car garage
- Sold in April 1990 for $150,000
- Sold in August 2007 for $430,000
- Originally listed in July 2008 for $624,999
- Reduced
- Currently listed for $605,000
- Taxes of $2806
- Separate heat and A/C
- Each unit currently rented
- Rental income of $39,240 a year
$2806 in taxes? Something smells rotten in Denmark…
“Taxes of $2806”
No way this survives a transfer. Taxes–with the homeowner exemption which wouldn’t apply–should be over $7k.
Indeed, those are the 2006 taxes; 2007 taxes were $6100, AND the owner is delinquent on their last two payments (2d half 07 and 1st half 08) after late paying the 1st half 07 w/o paying the interest. Assuming they have a mortgage, they are in technical default right now.
Also, I doubt that the basement in-law apartment (apparently leased) is actually a legal unit.
$600k seems to be about the current ask for brick 2-flats in the general area (I know of 2 others), and this one appears to be more updated, but I’d be certain to do extra diligence on the possible issues I noted.
It is in Coonley attendance area, but West of Western, which makes it somewhat less desireable, imo.
To acheive decent returns, you’d have to buy it at or below 500K.
“To acheive decent returns, you’d have to buy it at or below 500K.”
I’d be interested at about $450k, especially b/c of the uncertainty created by not paying taxes and the questionable legality (or contribution to rental income) of the “in-law”.
They paid $430k for it in Aug-07.
This property has many hidden costs. Although this 2 flat generates substantial income, as a previous commenter noted, the taxes are much higher than reported. I think in this neighborhood you are looking at easy $6.5k-$8k per year in taxes. Income goes down to about $31,000. Expenses per year in repairs maybe $1-2000 (assuming that this is a building in very very good condition)… we’re looking at 30,000 per year. Still high… With these assumptions you are looking at a capitalization rate of about 5%. Even with 20% down at 5.5%, ceteris parabis, your rental income will not cover your mortgage payment. Creative financing could make this deal profitable… This may be a good deal at $350-450,000, but not at $605,000.
right, but what’s wrong is this is getting a homeowner’s exemption when it is “fully rented”…
Its small, standard lot, only 2 bedrooms once you adjust for the taxes it’s a squeaker, one decent maintenance item and it whips out you minimal profits. I would be skeptical of these rents too, rents tend to drop a bit west of western and it is not close to good P-trans. 430K seems about right
I live in north Center, and while I am watching prices come down for small multi units, they are not nearly down enough
Rip off!
LOL if I was looking to be a landlord I’d buy a two flat in a neighborhood like Bridgeport for under 200k. Do you really think you’re going to get 3x the rent from a unit in this place than you would a unit in a less white neighborhood?
I like white people and all but no way in hell would I, as an aspiring landlord, pay 3x the cost of a property for more preferable demographics. Epic fail on this ask price.
“right, but what’s wrong is this is getting a homeowner’s exemption when it is “fully rented”…”
If I implied that, I am sorry. The Treasurer’s website sez no exemption.
so if it brings in supposedly $39240, that’s $1635 per unit, times 2 units, times 12 months. I’m thinking that rent’s a bit high for 2BRs over there, and even if you could get a 30yr fixed at 5% w/ 10% down, you’d still come up short a couple hundred a month. I’m surprised they add in the income from the illegal basement “in-law” unit to their cashflow numbers. Exactly how can you let anyone live in an “in-law” unit and charge/collect rent from them, legally?
A 2-flat like this will mostlikely be purhcased by a live in owner. I dont see a rent roll in the listing linked above. Are the rents listed on the actual MLS listing??
terms like ‘In-law’ garauntees that the basement unit is not legit.
If this was a block east of western instead of west then the price would be (close to) reasonable.
“Exactly how can you let anyone live in an “in-law” unit and charge/collect rent from them, legally?”
umm, you live in Logan Square, right? take a walk through any alley and look at the overflowing garbage cans. there are hundreds of illegal conversions in Logan, Humboldt, etc. in-law apartment usually means that at least it’s up to code and there are fire exits, etc – but some of the illegal conversions are 2 flats chopped into 6 units, they literally can be death traps.
“Indeed, those are the 2006 taxes; 2007 taxes were $6100, AND the owner is delinquent on their last two payments (2d half 07 and 1st half 08) after late paying the 1st half 07 w/o paying the interest. Assuming they have a mortgage, they are in technical default right now”
WTF. How can any legitimate agent list old tax info when its obvious that more current information is available. I dont care if the owners told the agent taxes were only $2800. It is there responsibility to chech the taxes are onlt list reliable information.
Seriously, what scumbags. This those nothing but make the listing look bad. Like the buyer wont find out before the closing what the actual taxes are….scumbags.
Is there an ethics board from realtors. Who can you file a complaint with?
I’ve complained about this in the past, IMO it’s deception to list taxes that the selling party/listing agent knows are complete bunk.
I know all about illegal conversions, and I report them when I see them being built out, but we all know that the inspectors find ways to suddenly “grandfather” these new units in. I’m asking the question in a sarcastic way, as in, “WTF?”.
Where’d Sabrina get this “fully rented for $39,240 a year” number?
How can a realtor reconcile saying “ALL UNITS ARE CURRENTLY LEASED” with the fact that it’s a legal 2 flat, and that renting out the “in-law” unit is illegal. So, I did the math with the number Sabrina posted, on 2 LEGAL units… and am left saying, “WTF” again.
I know, just pointing out that in-law units are pretty far down the list of egregious violators in the housing arena.
it’s possible the units are rented out to the max. my sister in law lived in an apartment with 3 other roommates and was playing IMO an insane amount of rent for what I considered a tricked-out 2 bedroom. basically, every room had been converted to/was sold as a bedroom besides the kitchen, dining/living room and bathroom.
“So, I did the math with the number Sabrina posted, on 2 LEGAL units… and am left saying, “WTF” again.”
Giving everything the benefit of the doubt, say the 2d floor is rented for ~$1300/month and the 1st floor is rented together with the in-law–which is actaully used for G’ma & G’pa–for ~$2000/month. The rent amounts then make reasonable sense and–someone help me out here–maybe makes the 3d unit not illegal?
And the taxes are “accurate” for the last bill they paid–about 12 months ago.
As to the more likely reality, click on the Dumas & Associates (oh, the irony–remember the A&W ad?) link which takes you to the craigslist listing which is titled
… wait for it …
“Updated Multi Family 3 Units Garage” and claims $40k in annual income. It also sez “For sale by agent/broker”, which implies to me that it’s “agent-owned”, but maybe I’m misreading it, which would make the tax “discrepancy” a **LOT** worse.
Couple more thoughts:
The first floor is pretty low to grade–the basement has less above-ground height than “typical” 2-flats in the area.
The listing really does claim that the 2007 taxes were $2806, which is actively false.
There’s a new-ish SFH next door and the neighborhood is pretty active on watching things–as evidenced by the recent to-do about the hiv+ transitional residence nearby. I’d be very wary of actually being ratted out about the 3d unit.
“As to the more likely reality, click on the Dumas & Associates (oh, the irony”
And as an added bonus if any potential buyer pays close to ask for this they get to adopt the surname of the seller free of charge.
The listing has the following rental info:
UNIT #1 FL 1 RMS 6 BR 2 BTH 1.0 SD$1200 RENT=$1200 LEASE EXP M/M
UNIT #2 FL 2 RMS 6 BR 2 BTH 1.0 SD$1375 RENT=$1375 LEASE EXP 09/08
UNIT #3 FL G RMS 2 BR 1 BTH 1.0 SD$695 RENT=$695 LEASE EXP 07/09
The same agent had the rental listing in the mls for the 1st floor. That listing says it was rented on 3/1/09 for $1250.
The property is owned by “2424 W BELLE PLAINE LLC.” The listing agent appears to have a connection to it since the tax bill is sent to a building that public records indicate is owned by the agent.
It appears the listing agent is well aware of what the correct current taxes are since the bills are mailed to him.
“It appears the listing agent is well aware of what the correct current taxes are since the bills are mailed to him.”
Constructive knowledge ain’t actual knowledge. Or something like that.
Let’s try this:
1. It appears the listing agent SHOULD be aware of what the correct taxes are since the bills are mailed to him.
2. It is the listing agent’s responsibility to enter the tax info correctly, even if they do not appear to have an ownership interest in the property (which this one does.)
3. The incorrect tax amount could be explained as a failure to update. The listing was originally entered in 7/08. At that time, the last known taxes were $2806 annually (2006 pay 2007.) It appears there could have been an error in the equalization calculation on that bill, since it doesn’t reconcile with known rates. Anyway, this error (?) was corrected by the 2nd half bill in 11/08. That bill and the 3/09 bill are unpaid for a total of almost $8400 in taxes owed.
G:
They haven’t paid the taxes, so I suspect they don’t open their mail. Besides, I’m just messing around.
“It appears there could have been an error in the equalization calculation”
Could the prior owner have been the beneficiary of some Chicago-style adjustments, whether legit or idunnonuttin? Deed was recorded summer ’07.
Just a perhaps culturally significant point. In Chinese superstition, numbers are very important. 2 means easy (sounds like the Chinese word for easy) and 4 means death (same reasoning). So 2424 is not just Easy Death, but it is as such doubled up! I can imagine my client saying: “easy death, easy death, west belle plain ave…”
A person that follows general Chinese superstitions would not even consider this property. Maybe you wouldn’t want a buyer that is superstitious I have, but this last year, more and more of the clients that walk in my door who are cash buyers have been Chinese. As far as I am concerned, with all their liquidity, they can slide to the front of the line.
Does anyone know of a good residential real estate tax attorney in the chicago area to get my property reassessed and lower my taxes?
“Does anyone know of a good residential real estate tax attorney in the chicago area to get my property reassessed and lower my taxes?”
I don’t have a specific recommendation, but you DO NOT want a general “residential real estate” attorney. You MUST get someone who specializes in tax appeals, as its really a typical Chicago political game.
This guy (owner/agent) bought up a bunch of properties at the peak. Did some work on some alot of work on others but it looks like hes probably underwater on at least a handful of them. Fire sale alert.
Steeply reduced all the way down to….$599,999 LOL