House gets foreclosed on when a borrower is not paying its debt obligations - typically its mortgage.buying foreclosures is not for the faint of heart as you have no idea of the interior of these properties lastly while it can be beneficial also realize if there are a lot in an area those homes are the new comps when trying to sell so it lowers home values in an area 

In this scenario, the higher pref and lower splits only come from the GP side.  

I tried calculating value based on NOI and cap rate (see below) but I'm new to this and the value seems to come out lower than I would expect.

Meaning you get 4-5X the depreciation to defer your income from being taxable.

Appraisers are using MLS data and often it is lower than actual rents. 

This implies residential units can be built at lower costs and provide better return. 11) adding an ADU to SFH can make the SFH fall under rent control.

The next gentrifying neighborhoods in Chicago are: Lower West Side; Humboldt Park, Gage Park, Ashburn, South deering, Hegewisch, Garfield Ridge & West Elsdon.  

You can use the "bad roof" or other problem to negotiate a lower purchase price. 

The numbers may be 30-40% lower than today's cost, but the process/approach to estimating may be good for you to review.

This is lower than usual though.Not complaining, just find it interesting.