Buying foreclosed properties in Chicago

9 Replies

I am working on a possible partnership to acquire a foreclosed property in the city of Chicago. Both of us (my partner) have no experience with foreclosed properties or dealing with the city of Chicago. Said property has some violations and will require a complete rehab. Our plan is to rent it out upon completion. The building has two units. Each unit has two 3 bed 1 bath. We are going for one of the two units. I will appreciate all advise on what to look out for. Thanks Andrew

Hey there @Andrew Oladipo . Overall I would say be very diligent. I've had clients take on their first project in Chicago and they underestimated how difficult the city can be to work with as well as how tenant friendly they are once they became landlords.

Jeff Valentino, Valentino Realty Group / HomeSmart | [email protected] | 815‑250‑7206 | http://govalentino.com | IL Agent # 475.160795

Thanks Jeff! I will be diligent. We have it under contract now and have instructed our attorney to pay special attention to pending litigations, violations, outstanding bills etc. One other thing I should have mentioned, is that, the seller appears to have acquired the prop through a foreclosure. Should I be concerned about this? My old school nature would expect him to rehab rather than flipping it...I guess things happen right?

Originally posted by @Andrew Oladipo :

Thanks Jeff! I will be diligent. We have it under contract now and have instructed our attorney to pay special attention to pending litigations, violations, outstanding bills etc. One other thing I should have mentioned, is that, the seller appears to have acquired the prop through a foreclosure. Should I be concerned about this? My old school nature would expect him to rehab rather than flipping it...I guess things happen right?

 How long did he own it for? Is he wholesaling it, or ran into $ problems, or the work was more than he could handle etc? That's what I would be asking...hope that helps.

Jeff Valentino, Valentino Realty Group / HomeSmart | [email protected] | 815‑250‑7206 | http://govalentino.com | IL Agent # 475.160795

@Andrew Oladipo

That is a tall order to buy a property with violations and that needs a full rehab in Chicago.  Be prepared for a slow painful process.  

Did you get quotes for the rehab yet?

Make sure the contractors know their way around the plans and permits process.

Also whatever you think your budget is.  Add more to it.  It is going to take longer and more money than you think it will.

Originally posted by @Andrew Oladipo :
I We are going for one of the two units. I will appreciate all advise on what to look out for. Thanks Andrew

Please clarify what you mean by "we are going for one of the two units"  It sounds like your purchasing a unit in building designated for 2 condos.  I ask because there may be violations against the building, but you're not buying the building.  You're only buying a unit in the building.  

@crystal smith. The building has two wings. Each wing has two units. We are buying a wing is what I meant. Each wing has a separate pin and address, hence the violations are unique to each address. I appreciate your comment

@cliff mccue. Our plan is to be patient and expect some challenges. We hope the end will justify the means! We bumped up our rehab budget a bit, but I still fear for possible cost over run. My partner has some experience dealing with contractor, so we hope that will come handy. I know my choice of word ("hope") might suggest no homework was done, but we actually did some homework.

@Andrew Oladipo

 Is the property in housing court with violations or is there just old violations on the property? Not sure if you have yet but you should check out the following link to see what it says specifically and if you need any help I will go over it with you.

http://www.cityofchicago.org/city/en/depts/bldgs/p...

We have been doing rehabs in the city of Chicago since 2008 and we do all we can to stay away from city issues or housing court.  What neighborhood are you in?  The slow process will kill you alone on security if it is in a rougher area?  

Medium untitledMark Ainley, GC Realty & Development LLC | [email protected] | 630‑587‑7400 | http://www.gcrealtyinvestments.com | Podcast Guest on Show #72

@Mark Ainley

It is in the New City/Back of the yards neighborhood. Thanks for the link. I did look into that awhile back, but did not understand much of what was listed. Prop address is 729 w 50th street, if you won't mind reviewing and providing your insight. Appreciate your input! You can be blunt with your recommendations...I welcome such.

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you