There are many ways to find distressed properties from MLS listings, word of mouth, auction house/ sites, obituaries, to county records and many more, a discussion for another time. I found my property on line in an auction house, www.xome.com. My search page looked like this.
Among the many properties that I was following the property I chose to pursue was a foreclosed Chicago bungalow in the Albany Park neighborhood. After a high-level review of the property details on location demographics and other like properties in the area, potential rehab costs, and the resale market I scheduled a site visit (December 2015). In the case of this property I was able to see it several times before it went up for auction, not always the case in these types of properties. In many cases site visits of distressed properties are limited if available at all.
Apparently when the bank foreclosed on the property it neglected to winterize it (assumed prior to winter 2014/2015) till after freezing temperatures burst pipe(s). The building sustained the usual pipe burst succumbing the building to overall destruction, deterioration and the obligatory mold. The eaves were inhabited by squirrels and the dining room sported a waterfall during rain storms. While making the decision to purchase the property I assumed that I would do a total gut/ rehab. My main objective was to rehabilitate the front exterior not changing any of the architectural lines while doing a full interior rehabilitation, re-purposing as much as possible, restore the look and feel of the period while opening the first-floor space, increase and improve the second-floor use of space, and include all the modern amenities. From this assessment, I pulled together the costs on what to base my bid limit on; cost to rehab, cost to sell etc. and the topic of next week’s blog.