Buy condo at Trump Tower Chicago a good deal?

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seine
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Buy condo at Trump Tower Chicago a good deal?

Post by seine »

My real estate agent thinks buying a condo at Trump Tower in Chicago is a good investment now.
There are 62 units for sale and some have been on the market over a year.
The building is very high quality, less than 10 years old, 10' ceilings, outstanding views, good amenities, and great location at the base of the "Magnificent Mile"
Prices are depressed now because of occasional protests in front of the building and perception that the building could be a target.

Would I be wise in buying?
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Big Dog
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by Big Dog »

...some have been on the market over a year.
forget recent protests; what concerns me is the above.
Grt2bOutdoors
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by Grt2bOutdoors »

Are you considering a purchase because you need a place to live or are you considering it as a speculation? Where are you living now - are the costs comparable? Can you afford it without taking a huge mortgage to purchase? Lot's of questions, but mayhem outside buildings is small potatoes (how long do you think it could last - 5-10 years, your entire lifetime?) compared to the other more significant costs. What are other comparable properties selling for? Is the discount enough of an incentive for anyone to buy? If properties have been sitting for over a year, that ought to tell you something.
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denovo
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by denovo »

seine wrote:My real estate agent thinks buying a condo at Trump Tower in Chicago is a good investment now.
Then why doesn't he buy one? Ask him for his track record for the last 20 years re market timing and real estate investments, transactions and profit/loss.
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jpa
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by jpa »

Do you currently live in Chicago, and more particularly in the downtown Mag Mile area?
harrychan
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by harrychan »

From an outsider perspective, I would wait to buy anything in Chicago.

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seine
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by seine »

There is no issue with affordability. I live in the suburbs about 15 miles from the city center. I would initially use it as second in town home and eventually sell my suburban home and the condo would be my principal residence. It would be a move to downsize and simplify.

I would like to get advice if it is wise to buy at a great price, but into a building that is underpriced because of the controversy with the brand.
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jpa
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by jpa »

I would fear any perceived discount is overstated. Have you seen comps from 18-24 months ago? The reality is it's the crown jewel real estate of Chicago. I've been in the hotel and the view/location is second to none. Investors don't let easy money lie there tho. I would think if it was heavily discounted, someone would have already begun acquiring the prime real estate
Grt2bOutdoors
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by Grt2bOutdoors »

I don't live in my home because of the "brand", I live in it because the amenities suit my needs and the expenses are easily affordable. Brand? - i suppose for those who are into "cachet" it may matter, sort of breathing rarefied air I suppose. I can't comment much on it, but if you are really concerned about the perceived taint on the brand, perhaps you can consult with another higher end real estate agency other than your own broker and see if you can glean additional insight? or ask your broker when was the last sale in the building and selling price. If the brand were truly tainted, I'd expect to see half price off type of sales (literally a fire sale), how much are the current discounts? especially for those which are still on the market 1 year later.
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carorun
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by carorun »

I personally think that Chicago real estate is a little too hot right now, but then again it could keep going up for a few years. I'm waiting it out.

Do you spend much time downtown now, specifically in the Loop or that part of River North? It's crowded and loud. Lots of foot traffic, cabs, trucks, normal passenger vehicles, etc. Dealing with that every day would drive me nuts. There are quieter downtown neighborhoods (Gold Coast, lakeshore east, west loop, south loop) and I think coming from the suburbs to Trump Tower would be a culture shock.

Also recommend you read this viral article about the ridiculous costs of living at TT, and this was written before the namesake became president. https://medium.com/@AjayGoel/the-downsi ... f20a85388b
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Pajamas
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by Pajamas »

It's probably a bad idea to take on the expense of two homes and it certainly doesn't sound like a form of downsizing and simplifying. If you are going to move, buy a place and sell the one you are in if you want to downsize and simplify.

Looks like a nice building. I don't know enough about Chicago real estate to judge the neighborhood and cost of living in that building compared to others, especially since a lot of listings don't even bother to state the monthly maintenance charges, but the prices look very reasonable compared to NYC. You can even buy a parking space in the building for only $30k.

The building is split between condo apartments and condo hotel apartments. I would make sure that there is good separation between the two. The maintenance charges will probably be higher on either side than they would be in a normal apartment building.

Trulia is showing closer to 90 apartments available vs. 60-something, but some of that information may not be up to date and your real estate agent probably has more accurate sources. Either way, it sounds like a lot to me, especially since many of them have been on the market for a while, and is not an indication of a real bargain. True bargains get snapped up even in down markets. Either the owners are not serious about selling their apartments or else they aren't willing or able to lower the price or both. Some may be underwater. It is also possible that many of the listings are on the hotel side. Condo hotels in general seem to have a lot of turnover in ownership and a lot of units available, which makes me think that they turn out to be not as good of an idea as the purchasers think they are.

As far as the protestors, that would bother me, and they aren't likely to stop any time soon. I also would not want to live in a building with Trump's name plastered on it unless it really were a bargain. That stigma has certainly increased in the last year or so, although some of those buildings here have already changed their names and signage.
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Watty
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by Watty »

Be sure to take an extra hard look at the condo association's finances. With that many units for sale I would be concerned that the numbers might not be good and there could be large increases in the condo fees.
Valuethinker
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by Valuethinker »

seine wrote:My real estate agent thinks buying a condo at Trump Tower in Chicago is a good investment now.
There are 62 units for sale and some have been on the market over a year.
The building is very high quality, less than 10 years old, 10' ceilings, outstanding views, good amenities, and great location at the base of the "Magnificent Mile"
Prices are depressed now because of occasional protests in front of the building and perception that the building could be a target.

Would I be wise in buying?

I would not recommend buying a second property in a Metropolitan area in which I lived, as an "investment".

Set aside the Trump issue. Does this work as an investment for you, ie you buy and rent out? (even if you don't rent it out you are, in effect, paying rental for the right to live there).

i.e. do rents meet outgoings and provide a return (forget capital gain on this). What about condo finances & fees? Property taxes?

You have to believe that if there is a discount now for being "Trump" when you sell it in 5, 10 years that discount will still pertain. Also I perceive his buildings to be "gold plated" in terms of a lot of finish items and building services that are expensive, and will be expensive to maintain in good condition. So long term cost of ownership could be high.
Nowizard
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by Nowizard »

Definitely, do not buy based on the "Brand." Though name recognition obviously triggers both positive and negative reactions at the moment, it is an emotional issue. Do the vacancies reflect a temporary issue of some sort, were the condos overpriced to begin with, have you spoken with tenants about the management, etc.? Apply basic financial principles as you would with any other purchase.

Tim
spoco79
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by spoco79 »

Illinois practically going bankrupt is about to have some serious implications. Its never happened before so we don't know how or what it will affect. I'd be gun shy on this one.
poker27
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by poker27 »

I'm not going to speculate if the place is devalued or not given the name. I will say that if you are looking for a downtown condo in the 'middle' of things, it is a very good choice. I've stayed at the hotel for a stay cation, and you are a few blocks from the 'action' of River North, while still being on the quiet side of the loop.
hdas
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by hdas »

--> Check the monthly maintenance. Last time I check was pretty high.
--> Adjust the advice of BH communtiy for its risk-aversion factor. Ppl get excited here about 1.5% CD but not much more.
--> I would think the property has a good rental potential too. This option is intriguing to me.
--> Chicago is a tale of two cities: Dynamic growing affordable metropolis vs Crime and fiscal issues. In the end I think we will be alright.

Good Luck
....
Maverick3320
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by Maverick3320 »

I would be very cautious buying any real estate in Chicago or even Illinois in general. When the fiscal music finally stops playing - and it will eventually - either taxes are going to rise by historic amounts, or the state and city governments will have to slash spending so much as to make the entire place basically Detroit 2.0. I can't imagine either will do much good for investment real estate.
windrose
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by windrose »

Are you sure prices are depressed there? The only way to really know is to take a serious look at past comps. Can your agent show you, with the comps, evidence of a discount?

Just at a glance, I can see that there is a wild fluctuation of HOA fees for those on the rental program, and those who aren't. It seems to then be reflected in the listing prices (rental program units listed for lower prices), which in turn might be dragging down the comps in weird ways. Even if you don't ever want to be on the rental program, I'd take a hard look at the math there, to make sure they don't become a problem for you at some point.

I have not followed the market in that building because it is beyond my price range, but I am more familiar with the next door neighbor, 405 N. Wabash. I don't see any signs of a discount there, it seems to have appreciated at the same rate as the general neighborhood, and the location is almost identical. It is an older building, and does not have the luxury amenities (or price tag) so it is really only a location comparison. It held its own price-wise during the downturn. You'd have to take a look at other luxury buildings, and their appreciation rates, to help with your analysis.

Is this your first condo/highrise purchase? The values of these places are really dependent upon the board, and how well they run things. Try to get copies of important documents (budget, a year's worth of minutes, and disclosures about % of owner occupancy) before you make any offers....these documents are very important and will help you determine exactly what you are buying into. Try to get a copy of the rules and regulations, as well...often the listing agents have no clue about even the basics...such as if dogs are allowed. I'm not sure if they do this on purpose, to avoid liability issues, or if they just don't bother to find out anything. In my experience, renters are perfectly fine neighbors, but their landlords will fight hard to avoid spending any money on anything...they don't live there, and don't care. For this reason I only consider places with a rental cap, or those that do not allow renting at all.
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rcjchicity
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by rcjchicity »

How much have you looked at luxury high rises in River North, Gold Coast, Streeterville and Lakeshore East? That would be the starting point for buildings with comparable locations and amenities, lacking political associations.
Longdog
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by Longdog »

Why would you have a real estate agent, unless you are already in the market for a property? Have you already decided you wish to purchase an investment property, and are just trying to find the right one? Or, did this real estate agent call you with the "opportunity" for some reason? I know why it's a good investment for the real estate agent; not sure why it would be a good one for you.
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Pajamas
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by Pajamas »

Not only are there dozens of apartments available for purchase, it looks like there are 29 apartments available for rent in that building at prices from $2,300 to $16,000.

https://www.trulia.com/for_rent/41.8879 ... _xy/18_zm/
DGE
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by DGE »

Had a quick google search and saw that the HOA fees start at +$1,000 a month and only go up depending on the unit you purchase. Even if you're planning to purchase one of the <$300k units, I'd never touch it with HOA fees that high.
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by azurekep »

DGE wrote:Had a quick google search and saw that the HOA fees start at +$1,000 a month and only go up depending on the unit you purchase. Even if you're planning to purchase one of the <$300k units, I'd never touch it with HOA fees that high.
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Re: Buy condo at Trump Tower Chicago a good deal?

Post by LadyGeek »

I removed an off-topic post offering a political perspective. This thread has run its course and is locked (trending towards politics). See: Personal Consumer Issues
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