For those who dream of brushing elbows with the denizens of the tony Gold Coast but fear they can’t produce the cash for a condo in the neighborhood, Metropolitan Development Enterprises might have a solution. The Flats on LaSalle, Metropolitan’s 250-unit conversion at 1140 N LaSalle Drive, offers studio condos just outside the Gold Coast starting at $121,900. For that bargain basement price, buyers get a whole 250 to 375 square feet.
So who’s buying these tiny studios? When we last posted about the project, some Yo readers speculated on its appeal to investor-buyers. Cindy Cornelsen, a sales agent for The Flats, says many of the buyers are investors. The building has also been popular with suburbanites looking for a weekend outpost in the city and first-time buyers looking for way to get into the condo game, she says.
The project is 60 percent sold, according to Cornelsen.
Condo game? This isn’t Monopoly.
And they’ve only been for sale for more than 2 years. Wow, what progress! At these prices and in this location, they would’ve been gone in an instant if they were any good. I don’t see how they would appeal to an investor since it would be tough to rent them at a rate that would produce positive cash flow, especially if you account for all costs of ownership and management. If they aren’t desirable to live in or producing positive cash flow, that will really limit the appreciation potential. Throw in a special assessment for the kind of repairs which are often necessary in an old building and you’re talking huge money pit. No, these converted studio apartments are not a good deal at all.
I sublet a studio in this building for a summer 3 years ago. I paid just $675/mo for 3 months. I’d be quite suspicious of anyone claiming that they’d be able to command a rent of 1K. Even if they do, it probably wouldn’t produce positive cash flow given the monthly maintenance and the condition of the building.
As I recall, water pressure in this building was terrible. Old wooden parque? floors. Window a/c units.
For 100K+, you’d be better off hoarding a few parking spaces in downtown or on the northside and renting those out.