Oct. 5, 2006 - What's Behind Door Number One
I have a few investor clients who just love to shop for bargains. I was out with two of them yesterday. We were looking at some of the majestic Greystones on the west side of Chicago in the Lawndale neighborhood. That is an area of Chicago that is on the mend, so to speak. Some of the Greystones still have the stone blocks out on the easement where folks used to hitch their buggies when they came to call. There are some really nice old buildings there that have deteriorated from neglect over the years, but they are restorable. Given the proper care it will rise to it's former glory.
However, there is a reason why these grand buildings can be bought dirt cheap. The area had become absolutely treacherous over the years. Open air, drive up drug markets, controlled by the street gangs were allowed to flourish. Addiction was rampant in the area, along with all of the evils that come with it, strong arm robbery, prostitution, con games, etc. Since it was a neighborhood of renters as opposed to owners, no one really complained too much and the "hood" hit the skids with no resistance from the powers that be. The money was no longer flowing into the absentee owners pockets, it was going mainly to the street gangs. Finally things got bad enough that the absentee owners felt that it was time to get out.
When they began unloading these magnificent buildings, investors took notice. As new money flowed into the area, along with a vocal public that wanted to protect it's investment, the streets began to get cleaned up. The drug dealers began being arrested. When that didn't produce the desired result, drug buyers began getting arrested in phony drug spot sting operations. The common folks were taking back the streets, and the people who were buying the properties cared about the properties. On the surface everything appears to be working out. However, there are still a few things that need to be ironed out, as evidenced by my experience yesterday.
Upon gaining access to one of the properties we were looking at, a sound, two unit Greystone with much of it's outside character in tact, I detected a strong urine odor. I did not think too much of it, thinking that perhaps there was once a cat in the house, or maybe a dog. At first blush, the place was not in too awful bad shape. Much of the original wood work was present but needed refinishing as one would expect from a 100+ year old place. The important part then, was to see the condition of the water rooms, the bathroom and kitchen. These rooms were totaled. That was OK though because there would be no need to gut them, there was not a fixture to be seen.
It was beginning to look doable until we opened a closed bedroom door and walked in on the squatter. It seems that a few homeless people had taken up residence in the glorious vacant Greystone. Each and every bedroom contained a five gallon bucket of urine. There were various articles of dirty clothing that was being used for bedding. Our squatter friend was the only one "home" at the time, but there was evidence of at least a few others. Closer inspection revealed their access points, an unhinged board on a boarded up basement window and a broken window off of the front porch, broken just enough to gain access to the window latch so they could open the window and lock it again behind them once they got in.
We escorted the poor guy out and continued to look over the property. No one else appeared during the course of our visit, but I knew they would be back soon after we left. I called the listing agent to let her know she had a problem. She indicated that this was not the first she had heard about it and that she would call the seller and let him know it had happened again. That's all fine and good I suppose, but don't you think that if she knew this problem existed that she would have given me the courtesy of a warning when I spoke to her to make the appointment to see the place?
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