Best idea--contact a Realtor directly that you want to represent you in the purchase who can give you more pointed advice. The fact that you are located in Illinois will add a few days to the transaction for document transmittal.
The competition for bank owned homes is fierce here in Sacramento, so you need to be; resolved, swift, deliberate, smart, and persistent. You'll probably wind up making offers on several properties before you end up with one, especially in the price range under $200K. I've worked with a few investors who don't come in with these qualities and who end up giving up and don't get anything.
Be--ready with your pre-approval if you need a loan or ready to get copies of your accounts with funds to close escrow to your Realtor so you can be the "best" buyer.
Keller Williams Realty
It is best to stick with REO (real estate owned) properties that have already been foreclosed on at a trustee's sale if you are looking to close relatively quickly. But be prepared to act very quickly on these properties as there are other buyers looking for an opportunity to purchase one these homes right behind you.
Diane Wheatley, Broker
Move Up Properties Real Estate
2. After new homes, the best resale homes to look at are regular sellers who have equity, and are ready to, or need to sell anyway. Normal sellers can match the banks on low price, but offer better transaction terms and a better experience to the buyer.
3. Rehabbed "flipped" houses. Contractors who used to build custom homes buy broken houses from the banks, fix them up nicely, and resell them for prices that compete with the distressed properties. These contractors work on much thinner profit margins than you would expect. It will cost you less to buy a contractors finished "flip" than it would cost you to buy the fixer yourself and hire the work done.
4. Low list prices on bank owned and short sales are illusory these days, many go for over the opening bid price (also referred to as "list price" ) Low list prices of houses are like low starting prices on eBay. There is usually a "reserve" price below which the bank will not agree to sell for less than. The "reserve" price is unknown to the buyer, but it is usually more than list price, and sometimes more than market value.
When you buy a foreclosed home, the process usually takes from 30 - 45 days. You may be thinking about Short sales rather then foreclosueres...the short sales can take up to several months but the process is currently being streamlined. Good luck :)