Home Buying in 60620>Question Details

Jol, Home Buyer in 60620

I saw a 3 bed 1 bath condo for, $5K, in my area. The building is in receivership. Should I stay away from this as a first home buyer?

Asked by Jol, 60620 Tue Mar 2, 2010

I am a first time home buyer and plan to live in this property.

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Buy it and don't tell anyone else about it.. You will become the condo assoc. if you buy it and no one else is in the building. Making you the first right of refussal on all the rest of the condos. Ask if there are any liens or encumber's on the titles. And make sure that your city has no fines against it... All together if you have a condo you can get for 5k and can live in it....GET IT BY ALL MEANS. Worry about the rest later. A lot of people would love to be in that kind of trouble. If you don't get it.. Let me have it... I like those kind of problems. Ha!

Mark Francisco
http://www.foreclosures-made-easy.com
773-991-1325
0 votes Thank Flag Link Tue Mar 2, 2010
Reality check here folks. $5K Condos aren't usually the deal they may seem to be. Tread cautiously.
If the building is in receivership, it means that it has severe enough problems for a Judge to warrant putting someone in place to supervise dealing with those issues, i.e. a Receiver. Chances are the building is in Housing Court, could be Chancery though. Either way you need to do your due diligence. Hire an attorney or inspector who handles these types of properties. Look up the Housing Court case and see what the issues are.
A $5K Condo is typically not habitable. Usually no water pipes, no furnace, bad conditions, bad porch etc. I can pretty much guarantee you WILL NOT be moving into this unit anytime soon. You would need approval from the Judge presiding over the case, allowing you to move into the property. This is highly unlikely to happen. The City may already have a RULO in place. (order not to rent, use, lease or occupy the property)
These units tend to come with substantial post purchase costs. Eventually the Receiver will have to be paid off, a porch may need to be built, or a new roof installed, etc. etc. All work will need full plans and permits. The Judge will typically order the receiver to perform essential or life safety repairs. 'Rehab type' repairs are sometimes done by the receiver, sometimes later by unit owners and/or a functional association. Either way, you aren't moving in and it isn't going to just cost $5K.
Depending on conditions and legal issues, the City may decide to go for a de-conversion order under the DCPA and turn the building back into a single rental property. It's not in receivership because of flaking paint. My recommendation is that you NOT believe anyone that tells you you can move into this unit or make money. Yes, it is possible but highly unlikely. I inspect these types of buildings regularly. These aren't for the faint of heart. As a first time home buyer you will essentially be throwing your life into 1-4 years of turmoil you can't even imagine.
Once again it is possible but highly unlikely you will do good on this. But then again, the fact that it is possible keeps the sharks making money off of first time buyers.
0 votes Thank Flag Link Fri Apr 27, 2012
Hi Jol. 60620 is my zip code. Contact me and give me some more information and I'll be happy to do some more in-depth research for you about the property. My info is on my profile page. I look forward to hearing from you soon.
0 votes Thank Flag Link Wed Mar 3, 2010
As stated earlier,

look to see if there's an HOA - if not, stay awaty
research HOA's financial's if they exist - if there are low or no reserves or no income is coming in, stay away
Does the building have violations or lawsuits against it? If yes, generally, stay away
How many of the unit owners aren't paying assessments? If more than 15%, - beware

I would advise that you engage a good real estate agent to do the research for you on properties that you may be interested in.

Jeff Nobleza
Baird & Warner
0 votes Thank Flag Link Tue Mar 2, 2010
Jol,
Is it a cash only buy? Whats the address? I probably would, since there probably isnt any reserves or any H.O.A.

Matt Laricy
Americorp Real Estate
Brokers Associate, e-PRO
mlaricy@americorpre.com
708-250-2696
0 votes Thank Flag Link Tue Mar 2, 2010
Probably, but I would need more information on the property and know more about your risk aversion level. What's the address?

philip
0 votes Thank Flag Link Tue Mar 2, 2010
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