Renovators Can Make Money in This Market: 1135 N. Spaulding in Humboldt Park
We’ve chattered a lot about flippers.
But what about true renovators? Those who dare to take a beaten up property, restore it and then re-list it?
Such is the case with this 4-bedroom brick single family home at 1135 N. Spaulding in Humboldt Park.
Bought in June 2009, the listing says it was stripped down to the bricks and renovated. Everything in it is new, including the kitchen, baths and the 2-car garage out back.
The basement has been completely finished and it has central air.
The house recently went under contract.
Will we see more of these “renovators” (instead of the flippers) as bank owned properties come down further in price?
Bob Safranski at Saffron Realty has the listing. See more pictures here.
1135 N. Spaulding: 4 bedrooms, 3 baths, 2 car garage
- Sold in December 1999 for $25,000
- Bank owned in September 2008
- Sold in June 2009 for $36,700
- Was listed in September 2009 for $299,000
- On and off the market
- Listed in January 2009 for $299,000
- Under contract
- Taxes of $2966
- Central Air
- Finished basement
- Bedroom #1: 17×14 (second level)
- Bedroom #2: 15×12 (second level)
- Bedroom #3: 18×7 (main level)
- Bedroom #4: 18×17 (lower level)
The rehab looks good, but isn’t this area pretty dangerous? If you’re going to accept living in a ‘hood where you have to drive to get anywhere, aren’t there safer alternative transit deserts in Chicago?
Yes, that is a REALLY bad area. Move the house to at least 1900 N Spaulding and you might have a deal, but right there? No thanks — even when I lived near there, I wouldn’t venture west of Kedzie when I was south of North.
looks very nice, I personally like the opne LV, DIN, and staircase but seerate kitchen.
I will second the fact that this is a really, really bad area. I wouldn’t venture west of California south of Armitage/Bloomingtong tracks.
Can’t you get a cute place for just a bit more in a safer area like Portage Park or Old Irving or something? (And maybe even be able to walk to a blue line or brown line stop?) Or what about Galewood or Elmwood Park?
hood aside,
this is the absolute best listing i can remember here.
You are getting a like new home for under 300k!!!
yeah the renovator is making a good return, and went cheapo with the tile in the bathroom and only tiled the bare minimum area, but it was tastefully done.
this listing shouldnt be on crib chatter. it was done right and correctly priced for the hood.
on another note, how can someone verify the work that actually occured?? With this kind of reno: moved walls, new stairs, suppossedly new mechanicals, permits would be required. Now the Chicago way usually calls for avaiding permitting (and thus inspection) as much as possible.
How does one verify as much as possible: i.e. how do I look up the permit and inspections?(-anything available online); what kind of invoices/records is it reasonable to ask the owner for, other suggestions??
I am currently looking for a similar scenario as the current seller except wwith a 5-10 year horizon: REO’d 1.5 story + rental unit basement in need of significant rehab and reno basement. What kind of things would a buyer expect to see so I could ‘proove’ the extent of the rehab.
Tom,
you are hitting on some good questions, hope someone with knowledge on this can chime in.
my personal experience is that for my house i never got a permit or inspection for anything i have done.
Will this hurt me when i sell?
Urban Pioneers for sure this is on the wrong side of the park (south west side)
Bwahaha! Clueless yuppie moves to the ghetto cuz they fell in love with the mostly new house. Problem is what happens when that newish smell wears off & this is just the nicest house on the block? They get killed on resale.
I think you’d have to REALLY be in love with the place and stay in it for the long haul in any hopes of turning a profit on this one. It’s gonna take eons for gentrification to make it that deep in Humboldt Park. That area is basically a war zone at this point.
“I think you’d have to REALLY be in love with the place and stay in it for the long haul in any hopes of turning a profit on this one.”
And by “stay in it for the long haul,” plan never to venture outside. Turning a profit requires living until the resale.
If they can sell it for more than $200K I’m sure the sellers will make a decent/huge profit as I doubt then reno costs were more than $100K.
As to the larger question about “renovators” making money. Yes, I think you can in this market – you just have to buy at a good below lower rung market price and properly manage your reno costs.
My wife and I actually just lost out on a house that was is being offered by a “renovator”. It is a nice house in a desireable suburb’s nicer/well located neighborhood. The seller’s got the place for $130K cach from Fannie Mae in 10/09 and did basic but decent improvements to kit, baths and hard wood floors and put it back on the market in 12/09 for $239K. I suspect they will close on the place for about $228K and easily make 30-40% profit on the sale, which is exceedingly good for 2-4 months carrying time.
I think the key for renovators is to have good cash reserves and the necessary skills to reduce overall reno and carrying costs – plus target the mid to lower end of the market, because these buyers will be willing to take the new $70 bath vanities because the other houses they have been looking at are either complete wrecks or need a ton of updating.
I’d like to see the basement.
If it was really a to-the-studs reno, do you really think it was only $100K? Unless you’re presuming that the principal(s) did a large percentage of the work and will get paid only by way of net profit.
I have no eye for this kind of thing, but even if the renovation was in the $200k level (doubtful), they’d still be making some pretty good bank, especially for 6 months start to finish. Good job!
I guess they’ve found a buyer but I’m not sure who this appeals to. If you have kids, are you going to move into this neighborhood? I would trade off the nicer finishes or space for a little more safety. I don’t know the area extremely well but does not seem safe to me.
One of our neighbors did well buying many years ago in our neighborhood. They paid $130K, place is probably legitimately worth even after end of bubble mid $300s with gentrification, maybe a bit more. So they’ve made decent money even after paying for Catholic school. But our area was safer then than this place is now, and there was the real prospect of gentrification, which I would think is limited in this area given the state of housing/economy.
“even if the renovation was in the $200k level (doubtful)”
Yeah, I doubt that, too, but do really doubt $100k, if it were a true gut job, unless (as I said) the principals did a large amount of work and were not accounting for their time in the $100k, taking their pay as profits rather than as an expense.
Is this one of WLs props? He did promise to notify Sabrina of one she could post and the totality of the completed project fits with what he claimed to do.
I would bet these rehabbers did not get full permits. People often just get something to hang in the window. It is common in Chicago to see a ‘replace upper cabinets’ permit in the front window of what is clearly a gut rehab.
You would need stamped architect’s drawings to get a permit for what they did here. The giveaway here is the turnaround time of three months.
Dept. of Buildings does have a site where you can check any street address and see permits for the last 18 mo. It is pretty well hidden-maybe someone else has a handy link.
The issue for me as a buyer would be less about permits and more about whether the work was actually done to code.
WL wouldn’t slum it here, there’s no italian coffee baristas withing walking distance
Can someone post financing deets? I have a nagging suspicion someone willing to drop 300k for a house here had trouble coming up with a 60 or even 30k downpayment.
Groove:
if you are still in the market for a play go see Private Lives at the Shakespeare Theater on the Navy Pier. Beautifully done, in the round with a revolving stage, and well-acted and designed. Of course not everyone cares about the loves and lives of the very idle rich, but Noel Coward certainly knows how to sling a zinger. The man has a way with words.
This house would make sense if you were the one paying $37k, then doing the renovation, then sticking it out for the long term. That’s the whole point of doing the urban pioneer thing – you’re the one getting the upside, not the people who held onto the place for 6 months and never lived there.
Bob:
Still pending, I think.
“there’s no italian coffee baristas withing walking distance”
Not Italian exactly, but you could walk to Star Lounge, excellent coffee. About as far as Gage is from Museum Pk. Seriously, go to Star Lounge.
http://starloungecoffee.com/
“This house would make sense if you were the one paying $37k, then doing the renovation, then sticking it out for the long term. That’s the whole point of doing the urban pioneer thing – you’re the one getting the upside, not the people who held onto the place for 6 months and never lived there.”
This is very correct, but probably outside of the means of 99.9% of potential homeowners. I’m sure you’d get a slightly more capable population when it comes to urban pioneers looking for a profit, but even then bones-up renovations aren’t exactly within the means of most folks.
I think there’s still potential value to be had if, once again, you stick with it in the long run until this area is no longer a war zone. Of course, that could be a 10-20 year timeframe and your dollars might be better spent elsewhere regardless. Interesting to think about.
The market is hot hot hot! Flip flip away! Humboldt park is listing in the $300’s now because the days of real estate glory have returned! Buy now or be priced out FOREVER of the north side neighborhoods!
anon – let’s split the difference between my 100K and Barry’s 200K – 150K.
Trying to sell for 299K less 187K = 112K = 59% profit, but let’s say they were strategic and sold for 230K – 187K = 43K = 23% profit. Still damn good for 6 months carrying.
(of course I’m not accounting for insurance and second payment of 2008 taxes, but for 6 six months worth that probably isn’t much anyway)
Poppa steve 🙂
we have never been to that theater? revolving stage=sweet.
I think its running until march? correct me if i am wrong. ticket price is tad high (for a theater i havent been) but if you say its worth it we will try it.
we will try and catch it in late February, we have two friends that are dancers that have performances the first two weekends of February. If you like spanish dance (i.e. Spanish ballet and flamenco) and are close to naperville Feb 19th, check it out. or if you like modern dance (i.e. odd interpretive) the 12th in evanston another friend is performing.
“If you like spanish dance … and are close to naperville ”
This isn’t a null set? Huh.
Anon,
A smart veteran Renovator could do a full gut on this sized house for 80k (lesser finishes) but if like you said “the principals did a large amount of work” is a scenario but a with a 3 month turn around time it seems like a larger crew would be needed.
No anon, this is not one of my projects. While they did discover a solid bones house that could be greatly improved upon, the neighborhood is very questionable.
My first requirement for investing in a successful renovation is that they be located in neighborhoods that already have a regentrification master plan in place and the support of the local government. To speculate on renos at this time is too risky unless you have unlimited resources and/or qualified buyers lined up for your finished product…which is very rare.
After two recent and very unexpected sales, I have four unsold units in Chicago, three of which are currently rented on a month to month basis to corporate, short term relocation companies. In attempting to avoid sitting with empty and staged houses on my hands, I went this route so I would still be able to have a positive cash flow while waiting for a sale to happen.
So to answer Sabrina’s question, yes with proper homework done, it is very possible for people to make $$$$ on renovating homes. The good thing that happened in my industry because of the housing meltdown is that the lesser experienced and lower quality renovators have all but disappeared from existence, leaving only those who turn out quality projects.
WL:
Mostly trying to draw you out. Still want to see your product, as you promised/threatened.
““If you like spanish dance … and are close to naperville ”
This isn’t a null set? Huh.”
yep still pondering how they came across that gig? they also have one in Pennsylvania and Virgina.
Transit desert? Ever hear of a bus? The place is a block from the Division bus. Jump on the bus and go wherever you want, it’s only 2 miles to the O’hare-Congress EL stop at Ashland if you like the EL.
Groove:
We were able to get tickets for $26.00 each for the Sunday 6:00 show from Hot Tix. The theater isn’t normally set up to be in the round but is done so specifically for this play.
As to going outside of downtown Chicago, we haven’t got our courage up yet. We rarely use the car and only drive during the daylight. We could have taken the 65 bus to the Navy Pier but opted for taxis. Mostly though, we just walk.
Have you seen the Hubbard St. Dance Company? Saw them in Madison a couple of years ago and was disappointment with the very short show they put on. There is a dance department here at the University and we often go to their student and faculty presentations.
As a footnote to nothing: fabulous hamburgers at Hub 5, http://www.leye.com/restaurants/directory/hub-51.
Groove:
We were able to get tickets for $26.00 each for the Sunday 6:00 show from Hot Tix. The theater isn’t normally set up to be in the round but is done so specifically for this play.
As to going outside of downtown Chicago, we haven’t got our courage up yet. We rarely use the car and only drive during the daylight. We could have taken the 65 bus to the Navy Pier but opted for taxis. Mostly though, we just walk.
Have you seen the Hubbard St. Dance Company? Saw them in Madison a couple of years ago and was disappointment with the very short show they put on. There is a dance department here at the University and we often go to their student and faculty presentations.
As a footnote to nothing: fabulous hamburgers at Hub 51, http://www.leye.com/restaurants/directory/hub-51.
“Barry on January 19th, 2010 at 1:30 pm
…
This is very correct, but probably outside of the means of 99.9% of potential homeowners. I’m sure you’d get a slightly more capable population when it comes to urban pioneers looking for a profit, but even then bones-up renovations aren’t exactly within the means of most folks.”
I assume most people living in a house while doing restoration/ renovation do it piecemeal – one year they do the kitchen, another year they do the basement, the woodwork gets refinished over weekends, etc. The mortgage on $37k (if you even had one) would be nothing, so the $$ not spent on rent would be slowly applied to fixing up the house. That’s how people used to do it, anyway.
True, but I can only imagine the at-the-time livability of a $37k house. I think in order to get results like this, there’s no way to do it but tear it down to the bricks. Then again, I’m an armchair renovator, so what do I know 🙂
“Have you seen the Hubbard St. Dance Company?”
yes i have, i want to say back in 2001. if you can catch a joel hall studio (sp) show, always lively and fun.
“As to going outside of downtown Chicago, we haven’t got our courage up yet.”
trust me i am not happy going all the way out to naperville, but the guy is my one of my best friends. i gotta support him and the arts.
There have been some ways to borrow both the purchase and rehab monies upfront, although I’m not sure if they’re as available today as they were in years gone by, and they generally require you actually live in the place for X years before selling. The house I’m in now I gutted/renovated, with the help of a HUD 203k loan. The house was an abandoned SFH, on the city demolition list, that I got at a sheriff’s sale. The house was about $65k, while the gut rehab was over $70k, and we’re talking about 12 years ago. Even if I missed the bubble, I’ll more than break even on this place if I ever sell…
I used an architect for the plans, but the contractor was bottom of the barrel because of my very limited budget. There are things I’m re-doing now, and things I simply have lived with for all these years that really need to be made right. No idea how banks would provide rehab monies in this current RE climate. Are they still writing lots of HELOCs? Restoration/renovation/rehab as a DIY project is simply not for the faint of heart!
Old Man-so true! I`ve noticed too the bubbly areas tend to be areas with white people near CTA rail. My suspicion is that these transplants want to be near a form of public transit that doesnt exist back home in Quad Cities, IA or Buffalo Grove & they are
“but the contractor was bottom of the barrel because of my very limited budget”
I did that for my roof in 2003 and well guess who needs a new roof this summer? and guess who is not in business to redeem the warranty on the work? the Shingles have a 10 year warranty, so guess who is getting a tear off this summer?
Looks like HUD was involved somehow in this property, but I always get the Grantor/Grantee stuff confused…
Can someone do a more solid trace on CCRD, please?
willing to egregiously overpay for real estate to live near CTA rail stops near other white transplants from Dubuque, IA or Tinley Park.
or bumblefuck Kentucky…
I looked it up and there’s nothing to trace on CCRD. It went into foreclosure from the previous owners, The previous owner bought it for $25k in 2001, with an 82k mortgage (?), foreclosure in 2007, deed to HUD in June 2008 (likely an FHA), deed from HUD to seller’s series LLC in June 2009. The house sold so very cheap probably because it was a cash only deal i.e. not eligible for bank or FHA financing due to the structure not being uninhabitable. Which sort of makes sense because there was a contractor’s lien on the home which sort of tied up the house in litigation for a while.
http://www.ccrd.info/CCRD/controller?commandflag=searchByProperty&optflag=SearchCommandForIL&PIN_1=16&PIN_2=02&PIN_3=410&PIN_4=007&PIN_5=0000
p.s. bob there’s nothing wrong with dubuque, IA, it’s probably the pretty part of the entire state, with the bluffs and the hills and the old mansions overlooking the mississippi river; you wouldn’t even know it’s IA. Plenty of outdoor activity all year round including skiing, biking, hiking, kayaking, boating, fishing, etc. It’s a nice place it’s just too bad it happens to be 3.5 hours from Chicago, but then again, so is green bay, springfield, wausau, indy, madison, etc…
“there’s nothing wrong with dubuque, IA,”
LMAO you have been on fire lately HD… thanks for the Tuesday chuckle
Given the fact that I was just recently in Dubuque engaging in outdoor winter activities (being across the river from Galena IL) I know what I’m talking about.
“Sonies on January 19th, 2010 at 3:31 pm
“there’s nothing wrong with dubuque, IA,”
LMAO you have been on fire lately HD… thanks for the Tuesday chuckle”
“The previous owner bought it for $25k in 2001, with an 82k mortgage (?)”
Rehab mortgage, like LS’s 203k, no?
Midwest skiing blows ass, I take it you’ve never been to the rockies?
“Midwest skiing blows ass, I take it you’ve never been to the rockies?”
I assumed HD was talking Nordic, rather than Alpine.
(not really)
anon(tfo) 1
Sonies 0
Iowa still sucks
sonies 1
hd -eleventy billion
Old man, I guess I should have been more specific. After all the horror stories I’ve read and experienced about wait times for buses in this town, I have no desire to spend 30 minutes on a street corner in the rain in a rough neighborhood waiting for a bus. I might have to sit next to hoodlums on the train on the way to work, but at least there are other people around with laptops and iPhones who help take some of the attention off of my super gay, muggable self with my slim-fit designer peacoat, leather gloves, artsy glasses, and Tumi messenger bag. And don’t roll your eyes at my Tumi bag. It was a Nordstrom rack special. If making a good investment in real estate means I can no longer walk to work wearing luxury brands (purchased at up to %70 off department store prices!), then I guess I’ll have to stick to the stock market.
The only thing worse than relying on the L is relying on the bus(es). Could you imagine living and dying by the Halsted bus?
I’m gonna go with Danny on this one – either the bus or 2 miles to the train. Fail.
I took the bus in grade school. I graduated – from both grade school and the bus.
cta park and ride people!!!!!!!!!!!!!
I agree with the consensus above regarding the bus. The cost of car ownership is pretty low. At worst, its a few grand for a beater, a couple of hundred for car insurance and then gas. The bus in most outlying ‘hoods (obviously not including the 151,156, 8) is reserved for sleeping bums, hoodlums, and those so far down on the socioeconomic scale that they cannot afford a vehicle.
The train is a different story because the blue line is remarkably fast and reliable, much more reliable than it’s bus alternative, the milwaukee bus.
that stupid smiley face is supposed to be an 8
Let’s not forget the $250/mo to park in the loop!
I’d be curious about the permits/timetable also.
Acquisition closed in June 2009 under $40K, and then rehab listed only 3 months later in Sept. 2009 at $300K?
Hey Sonies–C-A-T-S! CATS! CATS! CATS! 8)
I agree the walk to train housing should easily command 400-825%. Its spectacular, cleanly, speedy& on time vs the bus & never overcrowded. The bus is for losers & the rail for real ballers..
So much bus hate.
As long as it’s prime time I have no problem with the buses for the most part. When I worked nights back in the early 90’s I’d remember times waiting in negative single digit weather in the wind without shelter (uphill both ways!) for 45 to and hour. It seems better now.
A regular 9-5 makes commuting easier. I’ve been taking the Chicago bus multiple time a day for the past 5 months and can only remember one time that I had to wait over five minutes for a bus. I gave up using bustracker for #66 even for the most part.
Some buses are just much better than others. Not a lot of experience with the Division bus but #72 has pained me at times but I’ve been lucky with it since they finished that bridge over the Chicago river.
I love my 5 minute bus ride to work when I’m not walking, bustracker owns…, shut up you snooty jerks!
“Hey Sonies–C-A-T-S! CATS! CATS! CATS! 8)”
Bob-is that the admissions test you need to pass to get into Kentucky?
I take the bus often, usually the #3, #4 and #12. I been taking buses for over 50 years; used to take the Cicero bus from Adams up to North Ave. and then that bus down to the beach. I liked the electric buses like were on Cicero, they went like Hell.
But anyway I’m a city guy, I can get around, see.
“Groove77 on January 19th, 2010 at 2:07 pm
Anon,
A smart veteran Renovator could do a full gut on this sized house for 80k (lesser finishes) but if like you said “the principals did a large amount of work” is a scenario but a with a 3 month turn around time it seems like a larger crew would be needed.”
I didn’t walk through it but I was gonna say it could be done for 65–75K by a contractor doing everything themselves. Gutting it to the studs makes the most sense as you can get to the plumbing and electrical easier.
I read all the posts, and $300K for a SFR in that area is a lot of money. It doesn’t seem realistic that a true buyer would be able to get the value in the area. In the last 3 months there is 1 forclosure sale for $300K. Beyond that there is NOTHING above $225 for single family homes. I rehab 2 and 3 flats in the area and sell them fully gut rehabed, (with plans and permits), and positive cash flow producing for less less than $300K, way less. It is highly doubtful that they could get the bank, especially an FHA loan if that is what it is.
A price for this would be more likey at around $150 – $200K. It is not unrealistic for a good rehabber to have the house fully rehabbed in 3 months, with plans and permits, and to do the rehab for $80K or less.
It is unrealistic for a buyer to pay $300K for the property unless there was some sort of “creative financing” involved.
Just my opinion, I could be wrong…