By Inyoung Hwang
February 12, 2009
As a trader’s assistant in the federal funds futures trading pit at the CME Group Inc., Milli Salguero is familiar with risk.

Still, it took courage for the 26-year-old to plunk down $50,000
for a foreclosed property in the southwest suburb of Cicero that was
once worth $232,000, according to, and had been sitting vacant for at least a year.

“I was originally looking at houses for myself to live in but then
I saw the potential of these run-down homes,” Salguero said. “It’s
something I want to get into and maybe make a living off of.”

On the Cicero block where Salguero bought her house, neighbors were
less concerned about the impact of the foreclosure sale on their
property values, and simply relieved that the house is in the hands of
a new owner.

“She has a lot of work ahead of her to fix it up, a lot of
repairs,” said Frank Osysko, who with his wife, Cecilia, have lived on
the street since 1963. The couple suspect the long-vacant home had been
the site previously of illegal drug activity.

With three additional properties for sale on the block and hundreds
more houses in foreclosure in the predominantly Hispanic town, Cicero
might well welcome more risk-takers like Salguero.

“There’s been a significant impact here,” Dan Proft, the Cicero
town spokesman, said. “Our foreclosure rate is among the highest in
Cook County. We were allocated approximately $2 million from the [U.S.
Department of Housing and Urban Development], as part of their new
neighborhood stabilization program.”

Since the peak in housing prices in 2006, the number of
foreclosures in Cicero has more than doubled to 690. In 2008 alone,
foreclosures shot up 66.3 percent, compared with 415 in 2007, according
to a report by the Woodstock Institute, a Chicago-based policy and
advocacy nonprofit.

Proft said the town started noticing the depth of the problem last
summer from conversations with local banks and stories on the street
about people losing their homes. He explained that it was hard to pin
down one reason why the town has been so affected but that a big
turnover in population in recent years could be a factor.

In the 2005-2007 community survey by the U.S. Census Bureau,
Cicero’s population had risen 23.3 percent since 1990, while median
household income rose 8 percent to $41,101.

The Hispanic population, which made up 35.8 percent of the total
population in 1990, more than doubled to 77.4 percent in 2000 and
increased to 83.8 percent in the 2005-2007 survey.

“We have a lot of first-time homebuyers in Cicero and we have a lot
of first-generation families in Cicero,” Proft said. “Perhaps there’s
not as much familiarity with buying a home as there would be in a
community where the population is more stable in terms of having been
there a long time.”

He said the neighborhood stabilization program would not just
address the foreclosure problem but also try to prevent the “domino
effect” of other homes in the neighborhood seeing their values drop.

“We’ve definitely done some research showing that every foreclosure
in a city block leads to a decline in the values of nearby properties,”
Geoff Smith, the vice president of the Woodstock Institute, said.

The block where Salguero bought her house is a typical tree-lined
neighborhood street made up of a mix of single-family homes, duplexes
and multi-unit buildings. Maria Rodriguez, a realtor who is trying to
sell a six-unit building across the street from Salguero’s place,
admitted there hasn’t been a lot of activity.

Some residents on the block, such as Jesus and Patricia Riviera,
were shocked to hear that Salguero purchased the house two doors down
from theirs for just $50,000. Others were less concerned about the
bargain price because they plan to live on the block for many more

“I don’t want to move from [Cicero] because it’s so good to senior
citizens,” Cecilia Osysko said. However, the Osysko’s said they hope
Salguero will rent the house to good tenants.

Elba Alman, who lives three houses from Salguero’s property, said
she isn’t worried yet about her own home’s value declining: “As long as
my husband has a job. When he loses his job, that’s when I care,” she

Meanwhile, Salguero is looking forward to getting to work on
converting her new 3,500 square foot house into a duplex, which she
plans to rent out.

With help from friends and family with experience in renovations,
she hopes to cap repair costs at around $20,000 to $30,000. When the
housing market recovers, Salguero hopes to sell the property at a

If her plan works out successfully, Salguero said she will continue
to buy and rehab distressed properties with the hope of turning profits
on them later.

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