40 miles outside Chicago, Tom Roeser is participating in a large-scale version of “Flip This House.”
A CNN Money’s Les Christie reports, Roeser, president of the town’s largest employer, OTTO Engineering, has been scooping up dozens of foreclosed properties for the last several years.
But instead of following the typical real estate investor path –– first renovating and then flipping the homes for a massive profit – Roeser’s only mission is to make sure his hometown of Carpentersville, Ill., stays afloat.
So far, he’s bought 193 homes, fixed them up and has sold or rented them to area residents for about $200 below market value.
“I couldn’t afford for Carpentersville to become Detroit,” he told CNN Money.
He has a point. Detroit’s flush inventory of dirt cheap foreclosures has long been coveted by investors, especially from overseas. Remax real estate agent Albert Hakim reached out to Business Insider recently to say he’s been inundated with media attention from China and Singapore as foreign investors look for cheap footholds in the U.S.
“In the past two weeks we flipped 30 to 40 contracts,” he said.
Last fall, a millionaire snatched up 650 foreclosed homes in a Detroit for $4.8 million, beating out about 300 other investors. He planned to make about $2 million on the deal by flipping the homes, while donating other proceeds to families in need.
Roeser, on the other hand, doesn’t seem to be in it for the money. Carpentersville, home to about 37,000 residents, has been hit by hard times like many other cities in the Midwest. Unemployment topped 12 per cent in 2010 and the community made CNN’s 100 hardest hit neighborhoods list for foreclosures in 2012, with about one in nine of its houses foreclosed.
He now buys foreclosed homes in his community for about $40,000, spends $100,000 to $120,000 to fix them up and sells them for about $160,000 through Homes by OTTO.
According to the Homes by OTTO website, each house comes with new plumbing, electrical and heating and cooling units. They also come with appliances and new roofs.
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