Good Buy or Bad Buy?

[Paul Stout]

I found a property in the South side of Chicago. The owner said that the city made an offer to buy the property but she felt it was too low. The COC ROI is 20.95% and the cap rate is 11.75% and the cash flow is just over $600 on a 4-plex if I paid her full asking price. She said the city plan to develop that area. I found out that the city owns many of the surrounding properties and spoke to some neighbors who have gotten offers from the city as well. Some have accepted and some have not. The rumor is that they want to put in luxury condos.

So, has anyone else had this scenario?  Did it work out for you or not?  Can it be an opportunity for a better offer from the city?  Will the city harass the owner if the owner won't sell?  What are the pros and cons and what are your thoughts?