Want to be a Landlord? A Rare 2-Flat in Hot Southport: 1205 W. Cornelia
This 2-flat at 1205 W. Cornelia in Southport just came on the market.
Built in 1914 on an oversized 30×126 lot, the brick building has a 2-car brick garage.
There are 3 units in the building.
- Unit #1: 2 bedroom, 1 bath “owners unit” on the first floor
- Unit #2: 2 bedroom, 1 bath on the second floor
- Unit #3: 1 bedroom, 1 bath in the basement
The basement also has a storage room and a coin-operated laundry room.
The building has gas heating. There’s no air conditioning in the units. The listings indicate that there are window air conditioning units.
The 2-bedroom units have dining rooms and sunrooms.
The owner’s unit, on the first floor, has an upgraded kitchen with stainless steel appliances and granite counter tops. It has been opened into the back porch and has a breakfast bar.
The listing indicates that Unit #2, on the top floor, is currently rented for $1700 a month. The other two units say “owner.”
The listing also says projected rents for the building are “easily $6000 a month.”
From public records, it looks like this building has only had 2 owners in the last 30 years.
This is a rare opportunity to get a 2-flat in this neighborhood.
This 2-flat is in one of the most desirable locations in all of Southport. It’s just a few blocks to all the shops/restaurants/El and also just a few blocks to Wrigley Field.
Would this make sense as a “live in one and rent out the others” type of scenario for someone who wants to get into the landlord game?
Nicole Norwalk-Galanis at @Properties has the listing. See the pictures here.
1205 W. Cornelia: 2-flat, 5 bedrooms, 3 baths, 2-car garage
- Sold in September 1988 for $260,000
- Sold in September 1992 for $501,750 (not sure this is correct for this era but this is according to the ccrd)
- Currently listed for $1,000,000
- Taxes of $12,353
- No central air. Window units only
- Coin laundry room
- Projected rents “easily $6000 a month“
- Unit #1: 2/1 owner’s unit
- Unit #2: 2/1 rented for $1700 a month
- Unit #3: 1/1 in basement; also owner’s unit
- Dining rooms and sunrooms in the 2/1 units
6K a month in rent? That might barely cover the PITI with the renovation costs necessary to get that kind of rent, or not quite even. What’s the point?
“The listing also says projected rents for the building are “easily $6000 a month.”
that probably includes renting out the garage spots. Also you’re not renting to savvy renters who insist on high rise level amenities. You’re getting some transplants from Schaumburg who really want to live this close to Wrigley and don’t realize the city extends west of Western.
One important thing to note is whether or not the third basement unit is “legal”. Otherwise they should not be including the rent for that. The zoning cert would clear this up but you’d be surprised at how many owners don’t care to check this before listing their multifamily property. If it is illegal you’d be putting yourself at huge risk renting out to market tenants who could call building inspectors if they get pissed off at you, or worse, sue you if they get hurt and/or invite criminal charges against you if they die while living in the unit. No umbrella policy would cover you for renting out an illegal unit.
It wouldn’t be impossible (but certainly not easy) to appeal to zoning board and add the unit then get it properly inspected. Chicago zoning allows for one additional dwelling unit above and beyond what it is zoned for (section 13-196-740) as long as it meets the habitable requirements and you can prove it existed before 1957 zoning changes.
Rents are going up in the city and it all depends on how you market the rental units. A coworker has a two bedroom loft at Belmont and Pulaski and she is renting it out for $3200 per month. Each Millenial is paying $1600 as their share. So it is still affordable.
“What’s the point?”
depreciation!
“A coworker has a two bedroom loft at Belmont and Pulaski and she is renting it out for $3200 per month.”
yeah sorry I’m calling BS unless its like a 3000 sqft 2/2
That lower level is a dungeon. I know from experience that to even be considered a legal unit it has to have separate HVAC. I didn’t see any HVAC in the pics but maybe I wasn’t looking close enough. As the for the million dollar two flat, that might be underpriced! I thought the northside hit a million during the boom.
as for depreciation, you can take roughly $25,000 a year which is not insignificant. How this would affect me would be like real back of the envelope calculations, $8,000 a year in tax savings. Again, which is not insignificant, but I don’t know if I want to be a landlord in the city for $8,000 a year assuming you break even on rent. On the plus side, if you do actually break even on rent, or even make a little, it could be a nice payout in the future, like this owner is going to take in a few months (unless he 1031s it)
I just don’t see what is essentially two $500k condos.
Even at $6k/month in rent (as-is, which is laughable) the numbers don’t work.
“A coworker has a two bedroom loft at Belmont and Pulaski and she is renting it out for $3200 per month. Each Millenial is paying $1600 as their share. So it is still affordable.”
Absolute BS. Unless, like said above, it’s a 2500 square foot loft.
I was paying 3200 for a 2/2 with killer views at 757 orleans, which was still paying too much probably. With all the rental towers going up all over the city, the rents will probably be down this year, not up.
“depreciation!”
Wouldn’t this be going away under the Trump tax “plan”?
““depreciation!”
Wouldn’t this be going away under the Trump tax “plan”?”
I don’t think anyone knows the details of the Trump tax plan.
“I don’t think anyone knows the details of the Trump tax plan.”
When they released the one page “plan”, Mnuchin basically said that all deductions would be taken off the table except for the home mortgage and charity.
Of course, this is just the crazy 1-page plan and until the actual “plan” is put out, it’s meaningless. But they all want to make it easier to file so that means all, or most, of the deductions would have to be gone.
Belmont and Pulaski is the old Florsheim building. I, too, have to call bullshit at $3200 a month. A two-bedroom unit sells for about $250k in there. So either the renters are REALLY dumb or they’re pulling a leg.
“The numbers don’t work”
Numbers rarely work on a 2 flat. The point is only to get someone to kick in to help your mortgage, never to make money. Four flats sometimes work, but you really need a 6 flat to start making money.
I remember when a million $ bought a nice building
“Numbers rarely work on a 2 flat.”
It’s almost always about the long term appreciation in value and depreciation on your taxes. There’s just too many ‘investors’ who wanna be land barrons looking to buy up properties. I met one such ‘investor’ last year who works in an office by day and who ‘invests’ over a dozen two flats and other properties all over the north side by night. Not quite sure how the investor gets all the loans, he vaguely mentioned other investors lend him money, and he refi’s his existing properties to buy new ones. He says he doesn’t even break on even most of them but the appreciation on paper more than makes up for it. Now this guy, while a goof, is not unsophisticated, but this is the reality of what ‘investing’ in real estate is: somebody else will overpay for this property because they can take a long term loss while hoping the appreciation will make up for it.
@homedelete – I disagree with calling that “investing”. It’s speculation…
“The main difference between speculating and investing is the amount of of risk undertaken. Typically, high-risk buys that are almost akin to gambling fall under the umbrella of speculation, whereas lower-risk investments based on fundamentals and analysis fall into the category of investing.”
If you look at the rental listings on domudotcom you will see some listing prices and think “no fucking way”. Yet the property owners are getting those rent prices. The neighborhood from central park to pulaski and addison to bloomingdale is hot.
vb – speculation today is now considered investing…I agree it’s crazy, I agree, but as long as their is money chasing yield, and borrowers willing to stomach the personal guarantees, real estate prices will continue to be high; compare to 2012 when banks weren’t lending, borrowers didn’t want to borrow not knowing where the bottom was, and money was kept in cash in a safe rather than being invested….and investment properties were much cheaper back then.