Two-Flat for the Price of a Condo: 1524 W. Byron in Lakeview
Multi-unit buildings were hot during the boom years. You could buy the whole building, live in one unit and rent out the other.
Are they still a popular investment even with the price increases of recent years?
Take this 1898 greystone 2-flat at 1524 W. Byron. It’s listed for a price that is what you’d pay for a single condo, let alone a whole building.
Here’s the listing:
BEAUTIFUL WRIGLEYVILLE LOCATION FOR THIS 2 FLAT GREYSTONE ON A 28′ WIDE LOT! BOTH UNITS ARE BRIGHT & SUNNY W/HARDWOOD FLOORS, BAY WINDOWS, THERMPANE WINDOWS, IND. GFA/CENTRAL AIR UNITS, SECLUDED LANDLOCKED BACKYARD, FULL UNFINISHED BASEMENT.
PLENTY OF PERMIT PARKING ON THE STREET. 24 HR NOTICE PLEASE.
Greg Viti at Koenig & Strey has the listing.
1524 W. Byron: 4 bedrooms, 2 baths, no parking
- Sold in 1995 for $209,000
- Currently listed for $499,900
- No tax information is listed
- The property has a website with a virtual tour: 1524wbyron.com
that is very weird. such a low price. and it’s in a good school dis (blaine). strange things are afoot. maybe the non existent pics of the interior hold the clue.
oh, woops. there are pics of the inside. i’m at a loss.
nice staging of the back yard, i might add
CH,
Is it really a low price? Do you really think that via renting out both flats this building will be cash flow positive? Still not even close.
This isn’t underpriced; condos are overpriced. Multi-family buildings were obscenely expensive during the bubble because the three luxury condos you could build in its place were priced into the sale. No longer.
re “Still not even close” — what do you think these units would rent for?
the reason the price is low relative to similar looking buildings is that the lot is only 80 feet or so deep – and there is no parking.
my guess is that that the asking price would be 100 to 150K higher with a full-sized yard and parking.
A 2br/1ba in Lakeview rents for around 1000-1,200.
So lets assume 1,100, and theres two of these. Thats 2,200 a month in gross rental revenue. Is that enough to cover all associated expenses of a 500k mortgage in addition to landlord expenses?
Not even close. You can find apartment rates quickly and easily using craigslist.
It is landlocked, so it isn’t a very appealling SFR conversion. It’s also right next to a auto repair shop (which hasn’t had a real estate transaction recorded since 1994) on Ashland. So, not a primo lot, tho it’s a great looking building from teh front.
Also, someone had created a google map set (apparently looking for 2-flat) and had a note of $525k attached to this property. Perhaps a FSBO that a realtor talked into a LOWER asking price? Still seems a little high, unless one intends to live in one of the units–I doubt that $1500 is FMR for one of these.
is that all they rent for, 1100? My old girlfriend lived in a similar place, same hood, 13 years ago and paid that.
But the reason I think it’s low is that from the picture it looks pretty nice compared to stuff priced there (500k). Plus it’s a good location. How much money does it take to convert something like this to a sfh?
Rents in the neighboorhood for a 2 bedroom are around 1200. This is a short lot, and its landlocked, and its next to busy Ashland Ave, and a bit of a walk to P-trans, not alot of services nearby. Figure with 20% and an interest rate in the 6.5%, its a money loser, and not convertible to SFH
“not convertible to SFH”
Not convertible to a SFH that would be a near-term $$ winner, sure, but not convertible at all? C’mon; I wouldn’t sink the money into this property, either, but it definitely could be converted. But then, I wouldn’t consider a property w/o parking.
Just a few years ago 2 flats less than half a mile to the west were selling in the 800’s. Granted, they had parking and deeper lots but nevertheless, $499k seems like a reasonable place to start negotiations.
Still 30% overvalued.
When will these clowns understand the importance of cash flow.
“Just a few years ago 2 flats less than half a mile to the west were selling in the 800’s”
Those people who paid $800K for 2 flats are going to be the next people going under. Those buildings are so far removed from ever being rentable again, or fully converted (how many 1.5 million homes can we really support). Even if you assume its an even split in value per unit, $400K for an average, 1100sq ft. 2 bd / 1bth is unrealistic, considering you probably have some serious updating to do
In general assuming $1200 mth/unit rents, this building breaks EVEN at around $300K
to ANON – my guess is even though it is 28 wide, its still looks like a small building, built to a 25 ft wide spec as it looks like (not sure) it just has big set asides. so no parking, small building to begin with, by a noisy road, not close to many services, plus all the $$$ to convert, I doubt this would be worth it
it is walking distance to the Diner Grill
Can someone build a garage instead of a back yard (forgive me – not knowledgeable in the construction permit area)?
“In general assuming $1200 mth/unit rents, this building breaks EVEN at around $300K”
You’re pretty conservative in your reserves and in your cost-of-funds for the DP. Nothing wrong with that, especially considering that the asset value isn’t likely to go up much in the near future.
“I doubt [conversion to SFR] would be worth it”
Agreed. Just wasn’t sure what “not convertible” meant to you. This, too, might be “worth it” around $300k–put $200k into a nice re-do and you have a ~$500k updated SFR with no parking in a less than perfect location within a nice neighborhood–sounds about fair, no?
If you’re pricing it as a 2-unit rental investment, you also have to consider the future cash flows, particularly increasing rental rates. The more equity you put in, the more attractive it becomes as it gets cash-flow-positive sooner and sooner, but of course then you’re paying that much more in cost-of-funds. $500K is definitely too high for this one, even at 100% equity, but it’s not an inherently ridiculous price for a 2-flat in a good area. TThe shallow, landlocked parcel with zero development potential definitely holds down the value here.
I figured in a interest rate on 6.5%, with a 20% DP, 4% rent growth a year, 4% appreciation for the bldg, and added in 2K for insurance, 2K for maintenace/yr and costs in general rise at about 5%/yr, and I added depreciation for tax savings, you basically would make $0 a month at 300K, whenever you sold it you would make next to nothing
overall I have found putting alot of money into a bldg to make it look fancy (above avg kitchen say) rarely returns in rent or in appreciation over time in most areas
“it is walking distance to the Diner Grill”
true, but you would have to sell the bldg between 1-3am to realize that capital gain
Here’s a good speach on what is occuring in the housing market …
http://www.youtube.com/watch?v=6G3Qefbt0n4
“Mzart on July 28th, 2008 at 2:22 pm
Can someone build a garage instead of a back yard (forgive me – not knowledgeable in the construction permit area)?”
Since it is land locked there is no back alley way to give access to a garage. It doesn’t look like there is enough room in front to put in a spot even if you could get the city to grant you a curb cut off the street – which they would be highly unlikely to do.
In terms of Zoning it looks like the lot is a B1-2 lot so it could do retail on the 1st floor. That might make it attractive to a certain buyer. Someone who wants to live above their own store.
Still, I agree its overpriced.
haha.. nicely played. But what if I point out that El Gato Negro is also in close proximity, Mr. “Not a lot of services near by”?
“Mr. “Not a lot of services near by”?”
Also, as noted, there’s a auto shop practically in the front yard. You could probably rent a parking spot from them, too.
I went and looked at this place over the weekend….. its a dump! There is serious water damage in the basement. The HVAC system was installed in the center of the basement, in front of two of the 5 windows, so if you wanted to duplex down, it would include a complete HVAC system….
The rear porches are in serious need of structural work. The pictures on the listing site don’t do it justice. I estimate that it would take somewhere between $50K and $100K to get this one up to speed. Just my opinion…
thanks for the feedback. there were a lot of reasons given for the low price that all made sense, but it’s good to hear a first hand account spelling it out so clearly.