Locating Property In Chicago
am having a hard time locating deals in Chicago. Can anyone give me some pointers? I located my potential flip and learned a hard knocks lesson. However since then I am unable to locate any. HELP!!
I am looking to wholesale property until I build my cushion.
Thanks in advance
Can you provide more information as to what you've been actually doing to locate properties? It's hard to advise when we don't know what you've tried.
I am farming neighborhoods, I have others looking out for me too, contacting pre-foreclosures and foreclosures, and leaving business cards everywhere. I am in the city.
My hard knocks lessons is I located a 2-flat and the owner. Owner did not want it and willing to sell it way under market value. The ARV of the propertiy was 249k, needing 60k in rehab work and she was selling the property for 80K.
Talked to an investor and I never received my referral fee. However, I never put anything in writing. So, I never receiced my money. So, I know now to put everything in writing.
Would you mind PMing me about this investor that stiffed you? Did he actually close on the property? I'd like to avoid working with any investors like this. I'm curious, perhaps you found him out of an ad or something, in which case I may have even spoken to this individual.
Yes, I would say that was a hard knock lesson...It was probably a blessing in disquise in the long run...Who would want to work with an investor who is a snake and that takes advantage of people.
Always, always, always have a contract drawn up between you and the investor indicating your fees and when you expect to be paid.
Good fortunes in your endeavour.
Peace & Blessings~
Actually, you're better off finding investors that are honest and are interested in a long-term relationship. Technically speaking, compensation for birddogging is illegal in Illinois, and if you had an agreement with investor and wanted to take him to court, he could've just reported your activities to OBRE and that would not be a pretty sight for a birddog.
So, from a personal perspective, I don't recommend anyone in Illinois have any written documents that stipulate payment of the referral fees with respect to RE transactions unless they're licensed agent or broker. If you want to make money by birddoggin, you just have to find honest investors who respect your time, effort, and value you bring them and will always pay you when the deal your bring them closes.
Yes, I agree with Derrick, using beneficial interest in Land Trust is the way to go, if a birddog can convince an investor to do that. Problem is, there is still no guarantees there. If the person wants to birddog in Illinois and they want to protect themselves legally, I recommend they form a joint venture with respect to the property they bring to investor. The joint venture agreement will stipulate beneficial interest between parties and it can also stipulate that deed to the property should be placed in a land trust.
Hello Chi town folks. I'm so glad I found you... I've been scouring the web for days
I am a Mortgage Broker in Winnetka (owner). This lovely couple came to me 6 weeks ago asking for a cash out refi on their house to live on through the winter. Bottom of the 9th, I pull title and they are in the first stages of foreclosure. Couple is in their late 60's and lived in this large 4 bedroom house for 30 years. Foreclosure bailout loan is impossible as well as a very bad idea. They've asked me to locate a buyer.
Appraised value - $445K, will sell for $400K with one hitch... they will pay buyer - upfront at closing - $2000 per month for 15 months to remain in the house. They don't want to buy it back - they just need time to find a new home and adjust to the idea of moving. I've seen the house myself - beautiful - just needs carpet, paint and a little TLC.
I've ran numbers interest only option arm's (2.25%). All terms are negotiable - I want to avoid bringing a realtor into this. Also, can pull strings with my title company to use rent check from seller as down payment for the buyer.
My clients have entrusted me to secure a buyer. Please help! Thanks all...
PS - I don't really get what most of these icon thingies mean.
please send me the name of the person and the area in which that person works. I do not want to deal with anyone who I have to question their ethics.
Phil
They're are so many ways to find a good deal in Chicago. Depending on the area you are interested in, ask a realtor in the area you're working in. Have them look up all the Bank Own Properites in your area. If they don't know how to do this. Tell them in their search put in the remarks section Foreclosure. All the properties that are Bank Owned will come up. Good Luck
I, too, am in Chicago and finding out that identifying deals is a bit harder than I had originally suspected. There are so many newbies here, but not as many Mentors (or maybe I am not doing my due diligence in networking). What other sources besides realtors could I use to find deals for both rehabbing and wholesaling?
BTW - this site is AWESOME. I have been on several sites, but nothing has compared to this one.
Nice to meet you chicagokalo,
I'm also in chicago. You may want to check out the marketing forum on this site. You'll find a ton of great info there on finding properties.
Best,
Ana
In the last four to five years it has gotten very hard to find good deals in the Chicago area, because the deals go very quickly. My partner and I still find deals through, bird dogs, and word of mouth from people contacting you while you’re working on re-happing your properties.
The biggest problem in Chicago is that most property owners losing their property through a foreclosure will contact a real estate broker who places a high price on the property with a long contract. When we finally do get a call for help, we don’t want to touch it, because it’s listed on the MLS and we can’t do a short sale, because the Real Estate broker has a contract and their interest is in getting paid their commission and not helping the client.
Then you find the Real Estate Broker/Entrepreneur who finds an excellent deal and they (may) contact an associate with-in the 48-hour window, before they have to put it on the MLS.
In the past we used to purchase our REO’s from Realtor’s, but they now the Realtors have become Investors (after they saw the money we were making) and they now buy the property themselves, that’s why you will see Corporate owned on the properties.
Lately my partner and I buy gut re-haps for about from $19,000 and up, we then put about $50,000 in them, we started doing this because of the seasoning issue in Illinois.
When we find the properties in Chicago we put them under contract immediately, but we continue to work on our re-haps while we wait for them to be accepted and/or our next deal. The “We buy homes” signs work well for a lot of people, we don’t use them, usually our contractors that we have working on the properties call us to the site or get a number when someone has a property they own or they know someone who wants to sale.
Hope that helps in explaining why it’s hard to find good deals in Chicago, it’s because they don’t always make it to the market.
Nice to meet you too, Nievana14. Wallstreetequity, good points. So, my next question to all is how does one become successful in spite of these challenges. KevinL of Rockford, IL mentioned marketing, which, based on everyone’s comments, is the best option. In the panel’s opinion, is there a particular marketing tool that stands to become more successful than others?
One recommendation, I have not tried this form of marketing for real estate, but I have used it many times in other business ventures and I’ve had excellent results. Send a letter to all the Real Estate Broker Owners who handle REO's in the Chicago area, along with two business cards. Let the broker know what you're type of property you’re looking for. When I talk to a new broker I tell them my price is between $19,000 to $45,000 (They will usually help up up the price range) tell them that you are a cash buyer and you can close in 30 days.
If you do get a call from a real estate broker, you will find they will go into shock and you may never hear from them again! Most brokers are trained in class and they think they can’t make any money when you tell them how much you want to pay for a house! Most of these (narrow-minded) brokers are out to catch that big fish…you will find one or two that think volume.
You will have to go through a few brokers before you get a call back, remember that just because a broker has a license doesn’t mean they know how to sale property or call back and stay in touch.
It almost makes be want to get a license, but then I wouldn't be a Investor, I'd be a broker and I don't want to do that!
Another recommendation is to create a return (to sender) address label with your information and simply state "I Buy Property and pay Finders Fees" and put a phone number on it!
Go to a sign company and get a magnetic sign for your car door and put it on and take it off when you get a few blocks away from your home! Again, I have not tried this form of marketing.
Last in Chicago several of the wholesale prices you see today are higher now. I have observed several 3 BR and 4 BR properties in one neighborhood for $81,000 to $83,000. I passed on them and now there listed for $135,000 only after an Investor picked them up.
A few of the reasons you do not find a ton of properties in Chicago is we have a few companies that are marketing Investor Seminars. They also purchase properties at a wholesale price and then they will contract it over to their students at a higher wholesale price for the students to fix-up and resale.
We also have a few major Investors who will buy properties at a wholesale price and they place a pick 4X4 foot sign up on the front of their properties, With a $1,000 down you can have this Property.
The reason I know about these is because my partner and I (may) have missed many homes lately by one day, because I hesitated a day. A few reason why…I originally didn’t like to buy frames, I didn’t do roof work doing the winter, I didn’t like to pay over $20,000 for my property and I didn’t like buying property that is less than a three bedrooms. I’m tossing out a lot of these old notions.
Keep reading The Creative Investor there’s tons of excellent ideas on this web site, I usually just read, because I’ve lived most of these lessons and I have created my network of contacts over teh years! I’ve been buying and selling property for well over a decade, it’s true it is getting harder to find property in Chicago, but the property is still out there and it hasn’t gone away!
Hope this helps a little!