Bob Sheridan has spent the better part of the last 35 years converting condos. Along the way, he’s taken a few detours as economic winds have shifted. In the 1990s he ran a company that provided retirement services to associations and their members. And Sheridan fondly recalls an apartment building with 299 units he bought in 2005 in Chandler, Ariz., which “had 100 people waiting in line on the first day,” and had 286 reservations in the first three-and-a-half weeks.
A few years ago, Sheridan started focusing on acquiring foreclosed single-family homes in Phoenix. When margins there became razor thin, he switched locations to Chicago, and since early 2010 has bought 25 homes on that city’s ramshackle South Side, where he’s gutting houses to their brick exterior walls and completely rehabbing them. “We’re revitalizing the quality of the housing stock here, and it’s been the most gratifying thing in my career,” he tells Builder.
A typical Chicago bungalow is 800 to 1,000 square feet on a 25-foot lot, and most were built in the 1920s. The foreclosures Sheridan picked up, scattered throughout the neighborhood, were victims of “decades of non-maintenance,” he says.
The renovations breathe new life into the houses with new flooring, high-efficiency HVAC systems, plumbing, and electrical. Most of the houses are being enlarged—some to more than 3,000 square feet—by converting attics into 400- to 600-square-foot living areas and bumping out first-floor rooms.
The rehabs’ costs are one-third to one-half more than what Sheridan paid for each property. His company, RS&P Property Group, is pricing the houses between $109,900 to $194,900, and as of early August had sold 10 homes through three listing agents. It expects to clear its inventory by early next year.
Sheridan breaks even on the resales. But rehabbing more homes in depressed areas is contingent, he says, on “the unemployment picture.” Meanwhile, Sheridan is taking his next detour, to suburban Chicago where he wants to “reposition” existing homes in relation to their locations. For example, he might take a one-story ranch and convert it to a “more substantial house that takes advantage of its lot size.”