In terms of numbers how close would Chicago city properties come to the to the 2% and 50% rules.I have not moved to Chicago so I'm still unsure of the dangerous neighborhoods.

The dangerous double whammy.   

[As a rule of thumb, investment properties are in danger of negative cash flow if rents gross below 1%/m!]

Bidding on properties you've never seen in a place you do not live is dangerous unless you have a great feel for the area, have invested here already, or have lived here recently.

However, as we got into the rehab we found some atrocious--even dangerous--framing.

The 60 day game sounds dangerous to me, too much can go wrong, and 60 days isn't much time.Since we don't know the purchase price... going for a loan depends... if you need 25% down to do a new investment loan, and the property is over 100K, then give the seller 25K and take over payments (25% of 100,001 >25,000).

This is a dangerous life threatening issue that needs to be addressed right away .Doesnt matter who's fault , get it fixed 

I am not of the mindset to limit a persons use of their hard won property unless it is a true danger or severe distractions to others.

It's a great money maker when the market is hot, but when the market slows it is a very dangerous investment.Also, being a general contractor for new construction is a very challenging endeavor (even more so than with a rehab project), and I would recommend having a very sober perspective on the learning curve, even if you have construction experience.

Turn left to explore and see if the home building explosion continues.