Daily Real Estate News  |  August 10, 2009  |   Condo Association to Buy Foreclosures
The condominium association of a well-heeled condo unit in Chicago has devised a strategy for managing the foreclosures in its buildings.

The board of the Shoreline Towers Condominium is hoping the members of its 378 units will allow it to buy up condos in default and rent them out until the housing market improves. They need a two-thirds approval, which they believe they can get.

Average sale prices in the building this year have ranged from $95,000 to $135,000, down as much as $44,000 from the average sales price in the past four years. There are at least a dozen units in foreclosure. The empty units mean lost monthly assessments of $500 each.

Board President Edward Frischholz admits that the plan has some drawbacks, including a reduction in comparable sales prices in the building. Also, the association has negotiated a $2.5 million line of credit to make the purchases. If the units don’t rent, the association would be in jeopardy. But Frischholz says even these issues beat the alternative of letting the units sit empty.

Source: Chicago Tribune, Mary Ellen Podmolik (08/10/2009)