Is this overpriced? (Chicago: sale, real estate market, rental) - Illinois (IL) - City-Data Forum

homeslice66 · 01-18-2010, 10:03 PM

So I am currently a student at UIC and my family is looking to buy a condo/townhome near campus to live in for several years and eventually rent out. So far this is one of them that we are most interested in:

http://www.dreamtown.com/properties/...berdeen-2.html

However, being new to the Chicago real estate market, we are not sure if this is reasonably priced considering the area and amentities (I'm assuming it's somewhat overpriced to begin with as many listings are). Could anybody with experience in the Chicago real estate market give me some sort of idea of whether this could be a good buy?

Avengerfire · 01-18-2010, 10:35 PM

It is a cute building. I will give it that. Another plus (for me at least) is the fact that there seems to be only two other units in it. One of the bedrooms is kind of small though.

The unit above it sold for 290k in 2004 and 265k in 2008. The 1st floor unit sold for 305k in 2004.

I think you can get it for several tens of thousands less than the asking price.

If the plan is using it for rental property long term it probably is a good investment. However, you would have to get $1500 a month for it just to break even-even on a fixed 30 year mortgage.

If you are looking to sell it sometime in the next 5-10 years, that is a gamble like many other places can be.

homeslice66 · 01-19-2010, 09:48 AM

Awesome info, thanks! Where did you get the info telling the sale prices of the other units in the building in past years? I also noticed you said it's a plus that there's only two other units in the building. What would be the disadvantages (in your opinion) of, say, a unit like this:

http://www.coldwellbankeronline.com/ID/1027920

For sake of completeness, this is the 3rd unit we are interested in:

http://www.coldwellbankeronline.com/ID/1109681

I'm still thinking the unit at Aberdeen would be the best deal if we could get the price down to the 230k-240k range, but that's based on very limited real estate experience that's not in a city setting.

Thanks again for the help!

long101 · 01-19-2010, 10:53 AM

Based on what Angelfire found I would think 240s would be a pretty decent deal. If you plan on renting it out I woundnt expect to get 1500 a month, more like 1200. I live a block away from there and am going to have to take a look at this building on the way home. I like the interior and exterior though

Basekamp · 01-19-2010, 10:58 AM

Homeslice66, I like this unit and it isn't a bad price though I would seek about 9% off of this... I want to chime in having bought my home in Chicago about 2 years back.

One- Real Estate Taxes will be changing next year. Make sure to get the correct tax estimate, and see if you can't wait until people have their letters, thus needing to tell the correct amount on the taxes, the higher one.

Two- No parking spot included is always troublesome to me, it basically means the parking spot can be sold separately. Does this mean non-owners have the spots, figure out what that even means.

Three- if it is only three units in building that COULD mean problems. It definitely means going the extra mile on the home inspection. a three unit condo association will not be able to get a loan big enought to fix major structural issues or roofing issues. (>40,000 USD, unless they have 20k for a downpayment...)

Four- AS the structural issues thing is a killer, the condo association will not necessarilly reveal they exist when you are buying. I mean if the penalty for the crime is sued out of existance, but the alternative is also meaning out of existance, the equillibrium is lie about the problem. Just saying be careful.

homeslice66 · 01-19-2010, 12:32 PM

Again, thanks for all the info, you guys are awesome! To address some of the issues brought up:

I should have been more clear on the exact living situation that would take place. It would actually just be me living there for the next 3+ years while I am a full time pharmacy student (I would also find another roommate, so that would provide some rent money to help with the mortgage payments in the short term). After this my family would rent out the whole thing.

To Basekamp...thanks for the tip on the real estate taxes, I'll definately make sure that gets taken care of properly. Also, I don't have a car and don't plan on having one, so parking space won't be an issue for me, but I'll still ask about it. As for the structural integrity of the building, this was the one thing that I was worried about since the building seems to be rather old. So are you saying that if I ask about any structural issues, it's very possible that they will just straight up lie about it? Or is that against some sort of law?

I plan to take a look at it some in the next week or week and a half. What would you say are the main things I should look for/ask about, especially concerning the building structure?

Basekamp · 01-19-2010, 01:52 PM

i'm just saying with that much money at stake it is gameover for them wheth er they lie or not, so the incentive not to lie is far outweighed by the benefits of lying. I wouldn't eventher to ask an individual about building structure. Get an inspector that is good at catching structural/roofing/and major plumbing issues.

If the condo has around one year of the whole buildings assessments in the bank, and limited loans, that is generally an excellent sign of well meaning leadership.