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Income Producing Condo

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athome77

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Joined
Apr 1, 2008
Professional Status
Certified Residential Appraiser
State
Illinois
Looking for input.

1st floor condo unit on near west side of Chicago, Damen/Augusta area.
Unit consists of two levels. 1st floor is a 3 bed, 2 bath with a degree of finishing typical of the area: hardwood, granite, deeded parking, etc. Below grade level is a 2 bed, 1 bath with seperate kitchen and seperate ingess and egress, seperate mechanicals, similar degree of finishing. HO occupies the first floor and rents out the below grade area at $950/mo, yearly lease. Project built in 2003, originally as a three unit property (1st floor, 2nd floor, 3rd floor), converted to condominium use in 2004. Assessor indicates only three units in the project, no sperate parcel for the below grade area. Two story units (1st floor and garden level, referred to as "duplex" units) are not uncommon for the area, but all I have seen are connected by interior stairs with both levels combined into one unit, never seen a two story unit with seperate ingress and egress, seperate kitchen, and lease.

My first impusle is to treat this as a standard two story "duplex" unit and address the obsolescence of the lack of interior access to the below grade area and the cost to "deconvert" the unit (ie remove the kitchen, restrict access) but also have to take into account the impact of the fact that the below grade area is seperately rented and has 10 months left on a 12 month lease. There is also the matter of HBU analysis. Zoning is RM5 which would allow for four units. Market rent for a 2 story unit is $2200-$2400.

Have done more 2-4 families and more 2 story "duplex" units in the area than I care to recall, but have never before encountered what appears to be a legal two unit condominiun income property. Please let me know if anyone else has enounterted such a property and, even if you have not, how you would proceed. Thanks

PS Please provide only constructive suggestions/advice. I value the opinions of the contributors to this forum as valuation professionals but am not interested in the musings or gripings of those who may see this post as an opportunity to criticize me or those who may offer their opinion.
 

EVAUSA

Junior Member
Joined
Jan 26, 2008
Professional Status
Certified Residential Appraiser
State
California
Wow, better ask for a fee increase! Any sales since the 2004 conversion? If so, you might be able to extract an adjustment from competing projects and apply an across the board (assuming upward), since the chance of finding a similar comp is slim to none. Have you called the City/County to find out how they classify the conversion, having two kitchens? Very unusual for a condo, good luck!
 

Elliott

Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
This is worth at least a $20 BPO fee. What does the AVM say its worth?
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
...Please provide only constructive suggestions/advice...

I'd start with asking the owner if he (she?) has anything from the City of Chicago that indicates that the Subject is anything other than a single-family dwelling.

My guess: the owner has nothing from the city that indicates that the Subject is anything other than a SFR.
 

Tim The Enchanter

Elite Member
Joined
Jan 24, 2002
Professional Status
Certified Residential Appraiser
State
California
Would not the below grade part be considered a basement.
And not a legal apartment unit? :shrug:

Maybe it's common there, I have a friend with a 4 or 5 or 7? unit building in Bucktown, not fully legal I believe.

Haven't lived in Chicago for 20+ years though. Couple days visit last year only refreshed the memory a little. :shrug:
 

DTB

Elite Member
Joined
Jun 11, 2004
Professional Status
Certified Residential Appraiser
State
Illinois
I would go along with Lee and shift the burden to the owner. I also doubt they can come up with anything showing 2 units. Have the PINS been broken out ( and are they "findable")? If so, the garden would have its own PIN, right? If not it's a regular old duplex with cost to cut in a staircase from interior.

Goood luck
 

Brad Ellis

Senior Member
Joined
Feb 7, 2006
Professional Status
Certified Residential Appraiser
State
California
Lee, Mike,

The OP already told you that it has been converted into condos so it is not SFR at all; they are condos.

There are certainly thousands, perhaps 10's of thousands of these in Chicago so what is the issue?

Brad
 

Brad Ellis

Senior Member
Joined
Feb 7, 2006
Professional Status
Certified Residential Appraiser
State
California
Lee in LA,

Used to live in Chitown, eh?

If you are hankering for an actual real Chicago hot dog, beef or combo- there is a Portillos open at 8390 La Palma in Buena Park. Real true stuff. Another one is open in Moreno Vallye and the next (per Dick Portillo himself) is going in to Rancho Cucamonga.

There is alos a Rosatis Pizza in Corona if you are out that way- on California right near the 91. YUM!

Brad
 

Kevin A. Spellman

Senior Member
Joined
Aug 30, 2003
Professional Status
Certified Residential Appraiser
State
Massachusetts
The subject’s deed and the master deed should be reviewed. Does the subject, Unit 1 on the first floor have exclusive use the basement? Does the first floor unit have the appearance that was once a staircase to the lower level?

I had a similar situation and labeled the second living unit as an in-law. I was wrong to call it an in-law. The master deed did not allow a second living unit within one unit. My previous subject was a converted two family and the third-attic level was the in-law. The loan got denied because the second living unit was not permissible in the master deed.
 

leelansford

Elite Member
Joined
Mar 29, 2002
Professional Status
Certified Residential Appraiser
State
Illinois
Lee, Mike,

The OP already told you that it has been converted into condos so it is not SFR at all; they are condos.

There are certainly thousands, perhaps 10's of thousands of these in Chicago so what is the issue?

Brad

Brad, "SFR" as in the Subject is a "single residence" no matter the form of ownership. In this instance, the form of ownership has no significance as to the legal (1-unit? 2-unit?) use of the Subject.

My guess is that the owner has converted...without legal permission...the basement area to an additional living unit; thus my best guess is that the Subject is not a legal 2-unit property. But, I could be wrong and the owner has proof from the City of Chicago (but I still doubt this to be the case).

Lee
 
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