NEED HELP...Condo Conversation Incentive program offered by the developer???

Hey Guys,

I am looking for condos in certain parts of Chicago and I stumbled upon this…

The developers of this 444 unit apt. building, that they recently converted to condos, are offering to pay my taxes and assessments for the next 1-2 years. They call it a special incentive program for investors. I can not live there to get these benefits.

They are also going to send me a check each month to help pay for my mortgage. Here are some rough numbers (i’ll use the one year scenario):

Oh yeah and they are willing to take 6 % off the asking price.

321,000 asking price minus the 6% = a sales price of 301,740.

They are willing to pay for the taxes for the year which come to 5,787.
They are willing to apy for assessments every month which come to 338/mnthly
They will send me a check each month of around $787.
If the current renter is paying 1200/mnthly, then thats a gross income of $1,987 a month.
I’ll net around 90 bucks a month.

AND since they recently converted this apt. building to condos, there are still active leases on some of the units. SO, I can grab one of these with all these incentives and already have a tenant with a lease.

What do you guys think. Thanks for the help. This will be my first property and this board is a big reason why I have made as much progress as I have.



P.S. they also will pay 1 percent in closing costs.

I saw a similar offer from American Invesco a while back. They were offering a 3 year master lease on the condo and guarantee you a zero payment with 80% down.

Check your numbers on this deal, though:

Purchase Price: 301,740
Down Payment: 30,174
Loan #1: 241,392
Loan #2: 30,174 (HELOC)

Payment #1: 1687.85 (7.5%/30yr)
Payment #2: 238.88 (9.5% Interest only)
Taxes: 482.25
Assessment: 338.00

Using your numbers, if you are collecting 1200/month rent, you’re still in the hole $726 every month, not ahead $90 (unless that $787 check is actually above and beyond the tax/assessment payment).

It makes me wonder how much margin is actually in the sale for them to be giving away about 15% in rebates.

“Using your numbers, if you are collecting 1200/month rent, you’re still in the hole $726 every month, not ahead $90 (unless that $787 check is actually above and beyond the tax/assessment payment).”

Yes, the 787 is above and beyond the tax/assessment payment.

As a matter of fact, the company is the one you speak of!

Knowing this, is there anything I should know about this co.?


They’ve done lots of development in Chicago. I think conversions are a somewhat newer product for them.

It almost sounds as if they’ve gotten in a little deep on the project and are trying to sell the project out.

I’d look into it more and if you can make it work after the first year, then go for it.

If you’re interested in condo conversions, come to the WCRT Special Event on December 15 at the Carlton Hotel in Oak Park. It is specifically on the topic of Condo Conversions.

Visit for more details

Three words:

“Who’s your daddy?”


Is this your way of saying you like this deal Keith???

No, that’s KD’s way of saying he doesn’t like the deal.

I concur - bottom line is you’re getting a $301K property with a $1200 lease in place. Sounds to me like you’ll break even the first year and lose your arse in future years unless the property appreciates greatly. Based on the numbers presented you’re looking looking at a total payment of roughly $2747 after year one.

How much are you anticipating the closing costs to be on $301k purchase price? Even if you net $90 a month how long will it take you to break even on just the closing costs? Sounds to me like this deal is really bad because you can’t afford to continue the lease agreement after year one and If you pay 9k when you buy it in cc’s and say 7% when you sell it, the property has to appreciate a minimum of 10% before you sell it just to break even.

Correct DFW…this “deal” is no deal!

You can take this to the bank: A $300K property renting for $1200 a month is an “alligator”…maybe not today but “RSN” (‘real soon now’)…


thanks for your input everyone.

NOW, if the developer is also going to send me a check every month for $787 to help pay the mortgage…my gross monthly income will be - 1200 + 787 = $1987/mnthly.

Let’s say I take the 1-year incentive so they will also pay taxes/assessments for the year.

If I can get my monthly mortgage payments under 1987/mnthly…then i have positive cash flow for the next year. At the end of the year when the incentives stop…then I’m screwed if I hold.

So, I go in with the plan to sell in 12 mnths. The area has been app. about 8 % annually.

Does the deal work this way???

If not please let me why…as I’m not really seeing the BIG picture yet.


TimT ???

If you buy a property you pay closing costs (presumably the builder won’t pay them because they are reducing the sales price up to 6% on the front end). These are typically 2-5% but lets just use 2% as the best possible scenario on this. 2% of 301k = $6k to buy the condo. Assuming from day one you have a tenant and you break even on the cash flow then when you sell the condo given your 8% figure you are selling it for $325,000. Since you will pay 3% to the buyer’s agent (most likely scenario) and at least 2% of your own closing costs you’re looking at a MINIMUM of 5% of the sales price when you sell the condo. This is an additional $16,250. So you have at least $22,250 tied up in Closing Costs alone. So if your property increased in value $24,000 you make less than $2000 on your best case scenario for a risk of $301,000+. That is very high risk for low return. That’s why it’s a bad deal.

The numbers can be better, the property could appreciate, you could find a tenant for $3500 a month after the first 12 months etc, but you have to plan for the worst. If your most conservative numbers work out favorably, it’s a good deal usually, if not, it’s not.

Now let me get this strait and see right through the BULL!!

Let me ask you this they do the lending as well right???

So if i was smart I would pay my loan staff salary and charge a huge amount of points in the back end of the loan and take that money and pay your Taxes for two years as well!!!

Call them up and tell them you are a first time buyer and see what there deal is…

Then hang up call back and ask them about builder incentives!

Bet they are all close to the same deal!!