A real opportunity for two-flat owner-occupancy exists in the easternmost blocks of East Garfield Park at prices that are a fraction of what they were eight to 10 years ago. Back in 2008, the cost of dilapidated two-flats in the neighborhood was so extremely low that a small investor group, Pinea Properties, pushed into the area with a dozen purchases. They are now looking to liquefy a pair of buildings at 109 S. California Avenue and 2609 W. Jackson Boulevard to free up money for other projects. Pinea paid $23,350 and $88,000, respectively, and are seeking $150,000 and $160,000. The prices paid by previous owners in 2005 and 2006, when it looked as if the West Loop would march ever westward? $250,000 and $415,000. I was unable to reach a Pinea representative for comment.

The buildings aren’t exactly pristine, but non-cosmetically speaking, major work was done in the last few years: both two-flats have new roofs, electrical systems, plumbing, HVACs, and back decks. Kitchens and bathrooms in each unit were also improved. Both buildings have steady tenancy, in part because Pinea doesn’t take Section-8 vouchers and in part because they strive to avoid the antagonistic landlord-tenant relationship, says Coldwell Banker broker Mark Wohlgenant, pointing out that several tenants across Pinea’s holdings have rented for four or five years (full disclosure: Mark has worked as my broker). The adult son of one such tenant, Chris Jones, who has spent his life in East Garfield Park, opened up about the neighborhood.

“The area’s fine, but it’s more up and coming,” he said. (Funny enough, Bloomberg Businessweek also named East Garfield Park one of America’s most “up and coming neighborhoods” back in 2007, but I’ll bet they made their claim from NYC.) “A lot of stuff has changed for the better since the mid-90s. Way better. They put a park in right down the street (Park 574, at Jackson and Rockwell), new housing, a new grocery store (the very large Pete’s Fresh Market at Western and Madison), and we’re more connected to the United Center area than before.” Jones says the nagging issues of the area are a shortage of constructive community anchors like job placement centers, youth centers, and rec facilities as well as the stubbornly high number of vacant lots. “I’m trying to get my military buddies to come here and buy lots and build something.”

The arrival of Pete’s Fresh Market is a big deal for this long-time food desert. It’s at least as large as the luxurious Mariano’s two miles west at Halsted and caters to the neighborhood with good prices and the largest produce department I’ve ever laid eyes on. A nearby Walgreens also offers a grocery section.

It’s not typical for investment groups to mix it up with two-flats, as the economy of scale isn’t there and the management of scattered sites poses a greater challenge. But in impoverished East Garfield Park, where median household income was $26,141 in 2011 (vs. Chicago’s $43,628) it can also be hard finding qualified individual owner-occupants. This led Pinea’s investors and Wohlgenant to conclude prior to listing the properties that another investor was the likeliest buyer. “What I have found really curious is that all of the showings (in late winter and again since early November) have been to people who want to owner-occupy,” says Wohlgenant.

Low-income mortgage products from Fannie Mae and Freddie Mac make owner-occupancy more attainable for buyers of modest means. Freddie Mac’s Home Possible program allows first-time homebuyers and low-to-moderate income borrows to put down as little as five percent with mortgage insurance. If the target property is in an underserved area like East Garfield Park (low-to-moderate income area), there is no income cap for the buyer. According to Bill Marty, an officer at Perl Mortgage, a credit score of at least 640 and debt-to-income ratio (DTI) of no more than 45 percent are the main requirements.

Looking at the 30-year financing breakdown for the Jackson two-flat, a five percent down payment of about $8,000 and a fixed interest rate of 4.5 percent would carry monthly payments (mortgage, tax, insurance) of $1,245. The numbers are very similar at the California building. Both four-bed units at 109 S. California Avenue rent for $900 a month and the three-beds at 2609 W. Jackson Boulevard go for $920 and $950. Renting one and living in the other would lower an owner's net monthly payment to around $300.

The biggest obstacle faced by these two-flats is the void surrounding each. For 109 S. California, it’s a matter of most of the housing stock on its side of the block having vanished. For 2609 W. Jackson, a neighboring railway embankment unleashes sunshine and views to the Loop, but is also a stark landscape. Luckily, it’s a freight line with no rampant commuter traffic.

Asked if it’s plausible that an existing tenant may be in position to buy one of the two-flats, Wohlgenant said he wasn’t sure but that he’s tried to encourage at least one long-term tenant to make an offer. “It’s such a better deal than renting.”