Market Conditions in 60626>Question Details

Harry, Home Buyer in Liverpool, IL

Rogers park market condition five years later

Asked by Harry, Liverpool, IL Thu Mar 14, 2013

Hello everyone, I am considering buying a 800~850 sqft one bed one bath condo with one exterior parking in 60626 (without in unit laundry). The HOA and tax are about 350 USD per month. The unit is newly renovated and quite as is. The repairing cost might be lower than 1K. The condo building is well maintained as well. The location is in the heart of metra rogers park station, morse L and Jarvis L. According to Google map, the walking time to these spots are 7, 9, 8 minutes accordingly. The buying cost in total might be around 35K to 45 K. I wonder if I rent this unit maybe for about 2-3 years or even more and sell it later on. Will this be a good investment? Will it be sold at about 65K or even more 3 years later? Is it easy to sell? Thanks!

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Answers

15
Sold my crystal ball to pay off some bad real estate investment debt...

Time,money and the market all in play with this decision, and you control one thing, the money.

Oh, and the HOA and the financial condition of each of the other owners, almost forgot them.

High risk goes with high reward, so if the return seems to be hefty, it is a safe assumption there is risk there, whether you see it or not. Risk that turns your way is fine and it may well with this purchase.
It is not very liquid now, hence the low price, and you can also assume it will not be liquid any time soon in that market place.
The upside is a healthy return on your investment as long as you get it rented and to a good tenant.
Best of luck with the decision.
1 vote Thank Flag Link Fri Mar 15, 2013
If anyone could predict the future in R E we would be rich and retired. All I can say is that the entire market in all Burbs and chicago neighborhoods has started to change after 5-6 yrs of disaster. The extent to which that will progress is unknown. Plan to keep whatever you buy longer than shorter. 2yrs is not long. When you add your closing costs ont he buy side and the sell side you will need to have about a 7% appreciation just to break even. Why bother doing this if you cannot at least make 20% return and no way that will happen in 2-3yrs.
1 vote Thank Flag Link Fri Mar 15, 2013
Hi Harry,

Nothing new to add except that you must do your own due diligence in terms of what you are looking for in the ROI.

No one can foretell the future of any market or neighborhood.

Good luck!
0 votes Thank Flag Link Thu Mar 21, 2013
We are not really the ones to ask, someone is getting paid to represent you and that is who you should be getting advice from.all ours is free, and in a worst case, that is what it is worth.
A build,king with a high percentage of distressed ( foreclosure and short sales) will necessarily have a shortfall in revenue to the HOA and financing will be hard to find.
That makes it less attractive to buyers and lends.
Maybe you are a cash buyer, but most are not, so any restrictions on access to loans by buyers makes your asset less liquid and less saleable. The short answer to your second part is, yes.
Again, bet of luck, get a good Realtor to help you. Like I said in my first post it is all about risk and reward.
0 votes Thank Flag Link Sat Mar 16, 2013
Dear Cindy Wilson or any expert here,

If this is not too much asking, could you explain a bit about "Make sure that your agent has done specific research on the building and the neighborhood to make sure that values haven't been pulled too far down because of distress sales in the building."? Is there any negative impression/factors if the building or the neighborhood had low transaction prices in 2010~2011 due to the crisis and the following foreclosure/short sale waves? Thanks.

Harry
0 votes Thank Flag Link Sat Mar 16, 2013
Rogers Park was hit hard and early by the market downturn. Prices are low there because of the huge number of foreclosures and short sales in the area. Make sure that your agent has done specific research on the building and the neighborhood to make sure that values haven't been pulled too far down because of distress sales in the building. Also make sure that the rental ratio within the building will work long term. Finally, don't be expecting to make a lot of money from the rental in 2-3 years and then sell at a big profit. Typically you'll need to hold the unit for a while for it to be truly profitable. Thenumbers you're quoting worries me for a variety of reasons. I hope that you have solid broker representation to get specific advice on this purchase.
0 votes Thank Flag Link Fri Mar 15, 2013
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0 votes Thank Flag Link Fri Mar 15, 2013
Harry,

I would go with Phillips answer. He gave you a very concise answer. Also check to see how many renters are in the building.

Best of Luck
0 votes Thank Flag Link Fri Mar 15, 2013
These answers area all correct though Philip's is the most complete. Rogers Park was hit hard and that's why you can get a renovated unit at this price. I expect at $350 (high for a 1 bedroom) the assessment includes the heat. $700 is low. I would expect at least $850 (bearing in mind I have not seen this and do not know the size). There will be closing costs on both sides and potential lost income between tenants. Do your math. Price ARE going up but it may be you need to hold this for more years to see the kind of return you are looking for.

By the way, I do deal with rentals, especially in Rogers Park! Please feel free to call now or once you have the property if you want to get some help in finding a good tenant.

Deb Russcol
RE/MAX Edge
773-353-9185
0 votes Thank Flag Link Fri Mar 15, 2013
You got a lot of good thoughts below from all the other agents who already answered you. For me it is
never really that easy to just mention a neighborhood or area and say oh great, go for it!

It is just really more complicated, a one bedroom one bath is of course not a large condo and will not
appeal to many, you are thinking of a single individual in most cases and will you be able to rent it,
well there it comes into what is close by, how hard is parking, near the Rogers Park station you will
most likely be able to rent to students or university related personnel....

So if you just look at being able to rent, probably ok if you can rent it for enough to cover alllllll your
expenses, repairs, taxes and save for closing cost expenses. Check the association carefully, to make
sure there are no hidden or future fees coming your way.....

As for selling a 1/1 unit for 20 to 30,000 $ more, I do not think that this is possible in 2 to 3 years.....
Be very very careful, with what you are buying if you want to sell it in lets say more like 5 years plus
for profit, and remember after 5 years with tenants things will be older and you may have to paint and
clean up the place after each tenant change.

Good luck to you though
Good Luck to you

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0 votes Thank Flag Link Fri Mar 15, 2013
Harry,

I think Rogers Park is a good investment at this time. Nobody holds the crystal ball, but the area was hit harder than others by the downturn and offers a great value now. I would be happy to talk to you more about the details.

Best regards,

Ivan Sagel
312.515.7823
Ivan@atproperties.com
0 votes Thank Flag Link Fri Mar 15, 2013
HOA & Tax = $350

Proposed Rent??? = about $700????

This looks like a good rental that over time (maybe longer than 3 yrs) should appreciate.

Check out the health of the association as well. Any major projects (i.e. Special Assessments) on the agenda?
0 votes Thank Flag Link Fri Mar 15, 2013
All real estate is unique in its own rights. It looks like we are on the upswing however be cautious
0 votes Thank Flag Link Fri Mar 15, 2013
I think it would be a smart idea. Rogers Park is near Loyola so the possibility of renting out the unit to college kids exist. The market in Rogers Park was hit hard and continued to be hit after most of the rest of the city recovered. With the market on the upswing now if you buy with the plan of renting it out for a few years before selling I would expect it would be a good investment.
0 votes Thank Flag Link Fri Mar 15, 2013
Its tough to say or not. Rogers Park has been dropping in value, but we are on the upswing. I would think it would be up in value in the future.
0 votes Thank Flag Link Fri Mar 15, 2013
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