Home Buying in 60611>Question Details

Cathy, Home Buyer in Chicago, IL

I'm looking for a condo for my son in 60611 area and I noticed that there are so many units at 10 E. ontario

Asked by Cathy, Chicago, IL Wed Aug 20, 2008

on the market including short sales. Is there anybody can tell me more about 10 E. ontario condo? Why so many short sale and on sale? If I buy one of short sale, what is the advatage and disadvantage.

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Eventually all units will have to go through principle write downs on all mortgages or out right foreclosures. The main reason why this is that the units that have been sold by American Invesco were over priced at the time because of aggresive marketing tactics and I believe the worst one was the representation of sq. footage. There is only two differant one bedrooms for sale in the entire building based on sq footage except the penthouse units. American Invesco and even some of the units today represent the square footage as 995 or 765, but the reason for the misrepresentation is that these footages were including the balconies that are attached to all units of 150 sq ft. So really based on the new sq footage it should be 845 and 615 sq ft.

So looking at the square footage price comparisons the large one bed was selling in the mid to high $400 sq ft. The other smaller one bedrooms were even selling into the low 500's sq ft. There wasn't any new construction at that time go for those prices let alone a rental conversion building.

I believe some of the units that are in foreclosure being sold now are still over priced because it doesn't leave you with much room if prices go lower.
0 votes Thank Flag Link Fri Feb 27, 2009
Excellent response Mark. I was afraid to respond with the information I had wanted to, but you did a great job. Cathy, if you would like me to share my own opinion on the matter, give me a call on my direct line. There's a few other buildings you may also want to be aware of. I'm sure Mark could share some of the same valuable insight with you as well. If it's too good to be true, it usually is.

Best Regards,

Erik Jorgensen
212 E. Ohio, Chicago, IL
0 votes Thank Flag Link Thu Sep 11, 2008
Hi Cathy - 10 E Ontario was converted from apartments to condos by American Invsco. At the time of the conversion in 2005 to 2006, AI had a very aggressive marketing campaign where investors were guaranteed 2 years of "market" rent if they purchased a unit - which at the time was premium pricing. In addition, investors were given the option to upgrade the units for a package rate - may did not do the upgrade.

A similar program was used to lure investor to purchase units at The Sterling - 345 N LaSalle. At the time, the program seemed to be a good idea - prices will never go down, right?

Well - many of the units have gone undergone short sale or foreclosure due to the fact that many of the investors who had hopes of flipping these units got caught either without tenants, or were unable to sustain rents to cover their mortgage payments.

Bottomline is this - be sure that the building's finances are strong. In the case of 345 N LaSalle, owners were faced with a special assessment. Advantages would be purchasing a property in an ideal location at a reasonably good price. Disadvantages may be having to work thru potential financial issues related to a number of units with outstanding assessments etc.

Hope that helps.
0 votes Thank Flag Link Sun Aug 31, 2008
Great question. Many times investors are given incentives to purchase units in the building then when they can't afford the payments or taxes are raised but rents stay stable, they just walk away from the deal. This is an older property so who knows if its investors or not but with 440+ units in the building there are bound to be some short sales and foreclosures in this building.

While you may have found a great deal it is wise as you are doing to see what the overall market climate is not only of the area but of the building. In this case it is a great location building but 64 units for sale in the building does raise questions about the stability of the investment no matter how good a deal you are getting. You are entitled to review the condo docs after your contract is accepted (if it ever is) and you can back out at that point, but it tends to put your home search on hold for a while and can be a long process.

Now to the good news on the area you are looking: Last quarter saw a median price increase of 2.44% from 2007 however sales volume was down almost 15%. The macro climate looks good...the micro building/unit needs a bit more scrutiny.
0 votes Thank Flag Link Wed Aug 20, 2008
Short Sale means usually LOOOOOONG approval process by the selling bank.
Advantage Lower price. There is 250 units in this building. over 70 units on the market right now. 14 under contract or pending. Small city. There is going be always activity in place like this. "Short sale" has nothing to do with the building just with income of the current owner.
Sign of times.
Downtown condo should be good investment. There is always quite big buying/ selling activity.
0 votes Thank Flag Link Wed Aug 20, 2008
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