From “As-Is” Listings to a Home You Can Actually Afford
In every hot neighborhood, there’s a familiar story: the buyers with good jobs, decent credit, and a pre-approval in hand who keep losing to all-cash offers and bigger budgets. They fall in love with house after house, only to hear, “Sorry, you’ve been outbid again.”
On this episode of Bow Tied in Real Estate, Illinois attorney Mahmoud “The Bow Tie Attorney” Elkhatib sits down with Tiffany Watkins—a Chicago broker, property manager, and designated managing broker with 25 years in the business—to talk about the tools most buyers never hear about: 203(k) rehab loans and HUD homes.
Tiffany doesn’t just list pretty houses; she’s spent decades managing buildings, coordinating rehabs, and walking families through real eviction heartbreak. She shows how buyers with FHA approvals and limited cash can still get into competitive communities by targeting distressed properties and using the 203(k) loan to finance repairs.
And then she rips the band-aid off how this system treats tenants and landlords—why Cook County evictions are dangerous, why owners aren’t all “rich villains,” and how bad choices, bad laws, and bad information crush people on both sides of the lease.
If you’ve ever thought, “I’ll never get into that neighborhood,” or “Landlords don’t care about people,” this episode will challenge how you see housing, money, and responsibility in Chicago.
From “I keep getting outbid” to walking into a home that’s finally yours.
If you’re a first-time buyer or FHA borrower in Illinois—especially in Cook County—Mahmoud “The Bow Tie Attorney” Elkhatib can help you see the legal side of distressed properties, 203(k) loans, and HUD homes before you fall in love with a listing that could become a money pit.
Who Is The Bow Tie Attorney?
Mahmoud isn’t just narrating the market. As The Bow Tie Attorney, he:
- Represents Illinois buyers, sellers, landlords, and small investors in residential and multifamily deals.
- Handles foreclosure defense, eviction-related fallout, and “zombie” properties where second mortgages or code problems resurface years later.
- Translates dense legal language into clear strategy, especially for first-generation and working-class clients who don’t have a safety net.
On this show, he’s your legal translator, constantly asking: “If we sign this, what happens to you when things go wrong?”
Meet Tiffany Watkins: Broker, Property Manager, Rehab “Hillary”
Tiffany started in real estate 25 years ago—or, as Mahmoud jokes, “when she was five.” She cut her teeth in property management, then built her own brokerage, ART Property Management, as a designated managing broker who has never worked for anyone else’s shop.
Her clients are:
New homebuyers who want more than a cosmetic flip.
Investors who buy, rehab, and either hold or sell.
People who have the money and desire, but not the time, to manage every detail.
Tiffany loves the rehab side more than the glamour of sales. She describes herself as the Hillary from “Love It or List It”—the one who picks fixtures, designs flows, and makes homes functional. If a client sells, she lists it. If they hold, she manages it day-to-day. In downturns like 2008, when flips suddenly couldn’t sell, she pivoted her clients into rent-and-hold strategies and made sure they still walked away with income.
FHA, HUD Homes, and Why Distressed Properties Scare Everyone
Most first-time buyers in the price ranges Tiffany works with are using FHA loans, not conventional ones. FHA loans are powerful—lower down payments, flexible credit—but they come with strict property standards:
No chipping or peeling paint
Working utilities (water, heat, electricity)
Safe stairs, handrails, and basic life-safety features
Tiffany compares FHA inspections to a CHA/Section 8 inspection: the government is backing the loan, so it wants to make sure the home is safe and habitable, especially for children under six who could be exposed to lead.
That’s why “as-is” listings scare away half the FHA buyers before they even schedule a showing—most sellers aren’t willing to fix chipped paint, unsafe porches, or missing utilities. Meanwhile, HUD-owned homes (properties taken back after foreclosure and listed on hudhomestore.gov) often:
Are distressed
Don’t meet FHA standards
Are technically owner-occupant only for a first window—but still get ignored by FHA buyers who believe they can’t qualify.
This is where Tiffany’s specialty comes in.
How 203(k) Rehab Loans Actually Work (and Why Brokers Avoid Them)
A 203(k) is an FHA rehab loan. It’s still FHA at its core—same borrower requirements—but it allows you to wrap repair costs into the loan when you buy a distressed property. Tiffany explains there are two main flavors:
Streamline 203(k)
For under $50,000 in repairs
No HUD consultant required
Perfect for paint, minor systems work, and modest updates
Standard 203(k)
For $50,000+ in repairs
Requires a HUD consultant
Used when you’re dealing with major issues (roof, plumbing, extensive lead, bigger redesigns)
Most brokers stay away from 203(k)s because they’re more work:
You need a consultant to inspect, write up a HUD bid, and coordinate draws.
You need contractors who can front 25% of the work before getting paid from loan funds—because since 2008, they don’t get a draw until that first 25% is complete.
You have to think about total loan amount vs. appraised value. If the house is $200,000 and your total approval is $300,000, you have $100,000 for repairs—but only if the finished home will appraise at or near $300,000.
Tiffany’s edge: she can walk into a distressed property and eyeball the rehab budget, telling buyers which houses are realistically under $50K, which need a full 203(k) team, and which will never make sense within their approval.
Case Study: Beating the Competition in Lansing
During the pandemic, one of Tiffany’s buyers wanted to live in Lansing, Illinois. Every “ready” house they looked at had a line down the block and dozens of offers. With an FHA loan around the mid-$200s, her client kept getting crushed by higher-budget buyers.
So Tiffany changed strategies:
She pulled distressed and HUD-owned properties, not the pretty move-in-ready homes.
They found a house that had been beautifully rehabbed—but the main water line had been cut, which automatically disqualified standard FHA buyers.
Because it was in a HUD “first look” period, only owner-occupants could buy, not investors.
Most agents would’ve walked away. Tiffany flipped her client into a 203(k), brought in a consultant, and used the rehab budget to:
Replace the water line
Repaint the entire home after a lead test triggered extra funds for remediation
Replace the roof
Add a fence and other personal upgrades
All for under $50,000 in repairs within her buyer’s loan limits.
Later, she helped the buyer’s son down the street with another streamline 203(k)—just paint and a cracked driveway—again turning an “as-is, no repairs” listing into an opportunity instead of a dead end.
The Hard Truth About Landlords, Tenants, and Evictions
Tiffany spends as much time putting properties back together as she does removing people who haven’t paid. In Cook County, evictions are:
Emotionally brutal
Legally strict
Sometimes physically dangerous
She talks about having the sheriff execute an eviction where the tenant wasn’t home, then returning to find the tenant calling the police and claiming they never received notice—even though the process had taken months. Under new Cook County rules, her team has to pack the tenant’s belongings, store them, and arrange pickup—all while trying to stay safe.
She coaches her team:
“You can be murdered removing someone from their home.”
“You’re displacing a family. You have to respect their emotions—even when they haven’t paid rent.”
But she’s also blunt with tenants:
“Don’t confuse my compassion with me running a charity. I’m in business for profit. When you don’t pay me rent, my family doesn’t eat. I don’t run a shelter—but I can give you a list of shelters.”
She sees how society pressures and bad financial habits—Uber Eats, impulse spending, chasing Christmas toys over rent—put people into crisis. She reminds them of Maslow’s hierarchy of needs: housing and safety come first.
Mahmoud echoes her frustration with people who show no compassion for those in foreclosure or eviction. Very few people choose these crises; they’re the result of illness, job loss, or a thousand small pressures in an economy where everything—taxes, groceries, insurance—keeps rising.
Sharp in the law. Grounded in how people actually live.
You don’t have to figure it out from TikTok and hearsay. The Bow Tie Attorney helps Illinois homeowners, tenants, and landlords understand their rights, options, and risks—before emotions and bad advice make everything worse.
Chicago Housing, Unions, and Why History Matters
In the back half of the conversation, Tiffany zooms out.
She points out that:
Chicago has some of the lowest rents and highest minimum wage among major U.S. cities, even as it carries very high property taxes.
Markets like Los Angeles have higher wages on paper—but studios at $1,700+ and $7 gas push families into cramped, multigenerational living.
Chicago never saw the same wild 30–40% home value spikes; its appreciation has been more modest, which is a blessing now that other markets are correcting.
She walks through:
How 2008 wiped out Black and Brown generational wealth through discriminatory lending and foreclosure practices—until federal pressure forced changes.
How corporations now own more housing, echoing the Pullman era where companies provided (and controlled) worker housing.
How unions in Chicago grew out of brutal working conditions, and why attacking unions while automating low-skill jobs is a recipe for economic and social disaster.
Her message is simple: if you don’t study history, economics, and policy, you’ll misread your own situation and make bad decisions.
Discipline, Sacrifice, and the Path to Homeownership
Tiffany doesn’t sugarcoat it: the biggest barrier to homeownership for many Chicagoans is not always income—it’s savings and discipline.
Even with down payment assistance and zero-percent programs, buyers still need:
Money in the bank
Clean, documented funds
The ability to weather surprise expenses
She shares the story of a client whose rent jumped to $2,000 and who found the perfect house—approved, credits in place, only about $2,000 needed at closing—but the deal died because she didn’t have verifiable reserves. Her credit looked good because she constantly overextended herself to keep payments current.
Tiffany’s advice:
Stop chasing social-media lifestyles and instant gratification.
Prioritize housing over Uber Eats and impulse purchases.
Teach kids to read, to think, and to handle boredom—not to live with screens glued to their faces.
Her belief, shaped by counseling work in Chicago Public Schools, is that discipline and literacy are foundational. Without them, it’s impossible to navigate the laws, contracts, and history that shape American housing.
FAQ — 203(k) Loans, HUD Homes & Landlord Reality in Illinois
What is a 203(k) loan in simple terms?
A 203(k) loan is an FHA mortgage that includes rehab money. Instead of getting a separate construction loan, you buy a distressed property and finance approved repairs in the same loan, with FHA-style down payment and underwriting. It’s designed for owner-occupants, not flippers.
What’s the difference between streamline and standard 203(k) loans?
A streamline 203(k) is for under $50,000 in repairs and doesn’t require a HUD consultant. A standard 203(k) is for larger projects and requires a consultant to inspect, write a HUD bid, and oversee draws. The bank will only approve repairs that make sense within your total loan amount and the final appraised value.
Can I use a 203(k) loan to buy a HUD home in Illinois?
Yes. In fact, 203(k) loans are often the only way FHA buyers can compete for HUD or distressed homes in strong neighborhoods, because those properties don’t meet standard FHA condition requirements. A 203(k) allows you to buy “as-is” and finance the repairs needed to bring the home up to code and FHA standards.
Is the 203(k) process too complicated for regular buyers?
It’s more involved than a normal FHA loan, but with a broker or agent who understands 203(k)s and a solid HUD consultant, it’s manageable. The key is having realistic expectations, a clear repair scope, and contractors who can handle the draw system. The complexity is often worth it if it’s the difference between never getting into the neighborhood and finally owning there.
What rights do landlords and tenants have during an eviction in Cook County?
Both sides have specific rights and obligations. Tenants are entitled to proper notice, due process, and humane handling of their belongings. Landlords must follow strict legal procedures and, under new rules, often have to pack and store a tenant’s possessions for later pickup. Ignoring the rules can expose landlords to liability; ignoring the process can leave tenants blindsided. Speaking with an Illinois attorney early can prevent escalation or illegal “self-help” on either side.
When should I talk to The Bow Tie Attorney about a 203(k) or eviction issue?
Ideally before you’re locked into a contract or knee-deep in court. For purchases, that means before you waive contingencies or commit to a rehab budget you don’t fully understand. For evictions, it means before you cut corners with notices, sheriff’s instructions, or how you handle a tenant’s belongings.
