The appraisers have been calling me this past couple of weeks asking about the details of the transaction at 6721 and 6719 Maple in Westmont, Il, known as The Ponds. There hasn’t been a transaction closed for over two years – since the bubble burst. Financing had all but dried up in the investment sector, causing painful price drops by building owners to attract cash buyers. $366,000 per building wasn’t what the owners wanted for their buildings, especially since they paid $542,500 per building in 2005. There are now four other short sales (around $400,000) in the complex with two currently under contract. It’s been a real blood bath for owners of multi-family housing.
If you are a buyer for investment housing, now is the time to buy. Many buildings that are on the market don’t show that they are a short sale or distressed, but if you dive in deep, make an offer, you will find the homeowners/building owners will need to work it out with their bank. Cap rates have skyrocket back up from a low in 2007.
If you are looking to buy a building soon, get qualified by a bank because many of the lending rules have changed recently. Many lenders will require 35% down payment.
Call Mike McCurry if you have any questions about buying or selling investment properties in the Chicago metro area or suburbs.