Bad real estate photos - a continuing series

Hmmm. What's for sale here? This beat up old Honda? The Yukon Denali? The listing does highlight the three-car garage. But does this show it off to its best potential?

Chicago City Council sticks it to home owners - again - even if they DON'T buy the house

The Chicago Tribune reported this morning that the Chicago City Council is trying to figure out a way to make buyers pay the Real Estate Transfer Tax - even if they don't buy the house!

"Remember what I said about Bea Reyna-Hickey," said Ald. Bernard Stone (50th), invoking the name of the city's revenue director with whom he has clashed. "When there is a corpse lying in a casket she'll shake it to see if any change falls out of its pocket."

Under one proposal now in draft form, City Hall would require the transfer tax to be paid even when the buyer forfeits the down payment, which sometimes happens when a buyer backs out of a deal. Under a second proposal, the requirement to pony up would be triggered immediately when there is an installment agreement--a contract in which the buyer pays the seller over a period of months but does not receive title to the property until the last payment is made.

Nice.

The article continues on containing quotes from officials at the City Revenue Department justifying their opinion that they be entitled to collect the tax in these non-sale situations. However, one question looms in my head:

If the property returns to the market and is successfully sold, and the next buyer pays the tax, too, isn't this double taxation?

Oh, and since I know that a staffer from my Alderman's office regularly scours the internet for references to his name - this is for you:

32nd Ward Alderman Scott Waguespack - you voted in favor of the tax increase. I am a very vocal resident of the 32nd ward. I am a very vocal member of the Chicago Association of Realtors. I have an email database of all my neighbors. I intend to remind everyone that I can that you helped stifle the only bright spot in the U.S. economy at the moment. And that you dealt a harsh blow to my business.

Oh, I feel much better now.

Open House - the weekend of February 23 & 24

Saturday, February 23

The Buena Flats Condominiums: Open Saturday from 1:00 to 3:00
4022 - 4024 North Clarendon
Chicago, IL, 60613
Three beds from $279,900
www.buenaflats.info.

Sunday, February 24
1753 W. George Street
Chicago, IL, 60657
Wellington Park Townhome
Three beds, three baths, listed for $555,000
http://www.darrowwest.com/1753_w__george.htm

Series: Getting started with Chicago Investment Property. Part 1

A client purchased her first investment condominium this week. Besides helping her as her identify and purchase her property, I will be getting her started on her way becoming a responsible landlord. Since I have to create these materials on her behalf, I though the topic would make a great series of blog posts.

Phase 1: Identifying your potential investment property.

Get together with your real estate pro. May I suggest ->me<-? You should have a lengthy discussion about kinds of properties, goals and objectives, and finally your finances.

Kinds of properties: Would you like to own a two, three or four flat? Will you live in it? Would you prefer a condominium? Do you want one that you can fix up and sell for a profit? Or one that's already in good condition? Or do you want to find a larger building with six, a dozen, or even more units?

Goals and objectives: Will you buy and hold? Or buy, fix and flip? Are you betting on appreciation? Or do you need the property to cash flow? Do you need to shelter other income?

Finances: How much money are you putting down? Have you spoken to a bank yet? Do you know what interest rates are on investments? Are you aware of making exchanges? How's your insurance? What's your tolerance for risk?

After answering all these questions, you should then begin looking. This step can take a day or many months depending on your unique needs. I have a great checklist of steps to take in order to get comfortable selecting a property and making an offer. It's several pages - too much to share here. Give a call if you'd like to receive this; it's part of my investment handbook.

After you identify your desired property, you'll write a contract on it. You'll negotiate out your terms and your price, and if you're successful, you'll be under contract. But the process isn't over yet.

Take the time to do your discovery, or due diligence. For a condominium, you'll be given all the condominium documents. For a multi-unit building, you'll be given copies of all the leases, reports about expenses and copies of some of the bills.

Another part of your due diligence is to have an inspection.

If this all goes well, you'll be well on your way to closing on your investment property. Your attorney will handle most of the details and you'll be given instructions on when and where to go for closing, and how much more money to bring.

Before Phase 1 ends, however, it's wise to begin implementing Phase 2: Marketing your condominium or apartments for rent. Stay tuned for tomorrow's installment.

Guide to articles

Part 1: Identifying potential property
Part 2: Marketing
Part 3: Taking an application and lease
Part 4: Move in day

One of my predictions for 2008 Chicago Real Estate comes true

One down. Two to go.

In a previous post on predictions for 2008, I predicted that there would not be as many foreclosures in 2008 as there were in 2007. I predicted that one of the reasons for the fewer number of foreclosures would be programs mandated by the government to restructure loans that are in danger of entering foreclosure. The details of the first of these kinds of programs are being released this week.

Governor Rod Blagojevich announced the Homeowners Assistance Initiative program today. With $200-million in funds from four major mortgage lenders, the program is aimed at trying to ease the rising tide of home foreclosures. The program will offer 30-year fixed-rate mortgages, set at 8%, guaranteed by the Federal Housing Administration (FHA.) The interest rate is capped at 8% and is limited to loans with a maximum amount of $417,000. The loans will not have pre-payment penalties and no income requirements for borrowers.

To qualify, borrowers must attend credit counseling and have a credit score of 580 or better. This is much lower than for traditional mortgages.

I'm batting 33%. I should retire.

Chicago Diversion - tour the 1893 Columbian Exposition in Virtual Reality

A virtual design of the 1893 Columbian Exposition at the World's Fair held in Chicago is up and running at the Museum of Science and Industry. Visitors can ride in a simulated canal boat or be taken on a walk along the famous promenade down the middle of the White City.

Leading tours will be Chicago cultural historian Tim Samuelson along with Lisa Snyder who is the project manager for the university of California at Los Angeles' urban simulation team. They have been using architectural drawings, photos, maps and other historical documents to create this virtual environment.

The computer generated model of the fairgrounds is projected on a movie screen in the museum's auditorium and allows the guides to move the screen's point of view to any place in the exposition instantly.

Limited dates and times. No advance reservations. Tickets on a "First Come, First Served" basis. This should be a really hot ticket.

Presentation Dates and Times

Friday, February 15, 2008
10:30 a.m., 11:30 a.m., 1:30 p.m., 2:30 p.m., 3:30 p.m.

Saturday, February 16, 2008
10:30 a.m., 11:30 a.m., 1:30 p.m., 2:30 p.m., 3:30 p.m.

Sunday, February 17, 2008
11:30 a.m., 1:30 p.m., 2:30 p.m., 3:30 p.m.

Monday, February 18, 2008
10:30 a.m., 11:30 a.m., 1:30 p.m., 2:30 p.m., 3:30 p.m.

Chicago - Diversions for this weekend

Looking for something to do this weekend? Some of your guides' best suggestions for beating the winter blues include:

Thursday, February 14 - Happy Valentine's Day! X your EX at Metromix' party starting this evening at 7pm, Victory Liquors, 2610 N. Halsted. Put that evil EX behind you starting tonight. Bring a photo of your EX and shred it at the door, then come inside and enjoy!

Every day through Sunday, February 17 - the Chicago Auto Show. Besides about a zillion new cars, meet Chicago Blackhawk stars Patrick Kane and Jonathon Toews, meet Benny the Bull and South Paw (Bulls & White Sox mascots), and a whole bunch of live broadcasts for B96 and WGN Radio.

Comedy: Allah Made Me Funny, Friday, 2/15, 7pm, at Dominican University, 7900 W. Division, River Forest. An African-American, a Palestinian and an Indian walk into a bar... (www.allahmademefunny.com/chicago)

Chicago Trib says "Housing Misery to Linger" - not so much in the city

A couple excerpts from the Tribune's article on the state of the Chicago condo market for 2008.

Most analysts now agree that if Chicago had one construction market that would be considered in a bubble, it was the condo market," the report said. It used the word "dive" to describe condo construction starts this year.

And also

A trio of economists told the nation's beleaguered home builders Wednesday that housing probably will continue its slide through much of 2008, until a painful but necessary drop in new- and existing-home prices -- 15 percent or more in some parts of the country -- helps find a turning point.

A reality check:

I took a client out looking at condominiums yesterday - Wednesday, 2/13. I pulled the selected condos from the MLS database on Tuesday morning - demostrating that I was not holding old data. I called ten listing agents to request showings. Four of the ten agents reported that their listings were already sold.

At the end of our tour, we decided on a modest one bedroom condo located near the lake in southern Lincoln Park, and by the time we were able to deliver our offer to the listing agent, there were two other offers on the property. This does not sound like a stressed-out market. Many agents also commented that the last seven days felt like it did back in 2002.

More anecdotal evidence:

At the ever-popular Buena Flats Condominiums, I have received six offers on the condominiums in the last 10 days. Not all good, mind you, but there ARE buyers out there in the marketplace.

Chicago's Buckingham Fountain to undergo $25-million restoration

This post really is simply an opportunity to post a photo of Buckingham Fountain. A photo of a Summertime Diversion here in Chicago sounded like a great idea to me as I gazed at the weather forecast for tomorrow that contains another plunge into the single digits.

But I digress.

The Chicago Park District approved a project to undertake a $25-million restoration project for Buckingham Fountain on Wednesday. The project will be the most comprehensive restoration yet undertaken on the 81 year old landmark.

$8-million of the cost will come from the reserve fund set up as part of the original endowment for the fountain by its benefactor - Kate Sturges Buckingham. Wasn't she smart to leave enough cash to pay for the perpetual maintenance and upkeep of the landmark that bears her name?

According to the Park District, renovations would start shortly after Labor Day this fall, and last until Memorial Day, 2009. Hopefully they would have the fountain in order by the normal opening day - but are leaving themselves some wiggle room. Normally the fountain runs from April to early November of each year.

Expert Advice from our property manager - Steve West

A regular reader asked a question via a comment post on an earlier entry, but I thought the topic was so interesting that I felt it deserved its own post.

Can a condo association require a separate security deposit for renters? My building has six units. In our house rules, it states that only one condo at a time can be rented out. It also states that a security deposit equal to one month's rent must be given to the condo association. Is this legal? I doubt that I am going to get any renter to give me an amount equal to two months rent (one for me, one for the association.) Thanks.

Our resident property management expert, Steve West, from Evolution Real Estate replied:

First let me do the disclaimer - I am not a lawyer and what I'm about to say is based on my years of management experience and not intended as legal advice.

Now to your question: It is my understanding after having asked several lawyers over the years questions very similar to this that the practice of treating Renters (or owners who rent) different from all other owners is illegal. The basic jist is that an association can not create "separate classes of ownership" (ie - one set of rules, regs & fees for resident owners and a different set for investment owners).

However, if you association charges a deposit for ALL owners regardless of status, they might be able to get away with it.

I'd question your board. If they insist, you should suggest to them that before they try to enforce it, they should run it past the association's attorney in order to save themselves some expensive problems.