How Does Fix and Flipper find First Deal (Chicago Market)

Question

I have been looking for that first deal for about 4 months and have been close but have not locked anything in.  I lose focus based upon many methods of finding property yet nothing seems to work.  I am amazed by how many fix and flippers are able to do hundreds of deals when it takes so long to find just one.  I have been trying to locate wholesale deals through mailings and door knocking to looking at properties of other wholesalers and finally talking to real estate agents for any leads they may have.  I am not having any success and am getting frustrated as to how I should focus my energies.  I would be grateful for any guidance as to how fix and flippers develop their strategies and what can I do to develop mine.

Larry Smet · Answer

Hi Kenneth

You have to have a lot of persistence to succeed. I know A LOT of people that took at least 6 months to find their first deal (I heard the average for serious investors was 6 months). It took me 8 months. Having said that, as you make more connections and gain experience, you'll find it gets easier.  It took me 12 months to find and complete my first rehab and flip. In the following 9 months I acquired 5 more properties and completed 2 more flips.  5 of the 6 in Chicago, by the way. It does get easier.

Keep plugging away!

Good luck

Larry

Kenneth Goldman · Answer

@Larry Smet

Thank you!  Great advice.

Account Closed · Answer

A quick note about the list of meetings in Chicagoland that was posted. They are from several different organizations/clubs. Each club has its own identity and rules. Some may work for you and some may not.

You owe it to yourself to attend them all and figure out which works the best for you and your business. Do not go to one and judge them all based on your experience there.

Larry Smet · Answer

Hi @Kenneth Goldman

The short answer is:  I've established a great team in Chicago.  Not to overwhelm you but over time you'll want to establish a solid team including at least: realtor(s), contractors, real estate attorney, property inspector and insurance agent.  All of my team reports to me independently so I get several different perspectives on properties and areas.  My inspector also serves as a project manager for my rehabs.  At the end of the day it's the numbers that do the talking (in terms of choosing location), but I stay away from war zones.  I find if your realtor specializes in an area that can work really well focusing there. After you've done a deal or two in an area you become more familiar and it gets easier because you have a better expectation of the outcome of any particular deal.  For me it's critical to get report backs from all of my team members before acquisition and frequently during the rehab.

I think it's great if you are able to focus in your own "back yard" - it will make things easier, especially for your first deal(s).

Keep us posted on your progress.

Regards

Larry

Kenneth Goldman · Answer

@Larry Smet

Larry,

Your advice is wonderful and I am grateful for the insights.  I hope you don't mind a few more question and that is how do you go about locating, fixing and flipping properties in different states from where you live.  I have only been looking in the neighboring areas to where I live since I am concerned about staying on top of contractors and schedules.  Therefore, I would like to know how you manage from afar?  How do you also decide which locations to look at?  Thanks-Ken

John Hauser · Answer

Ken:

Here are some suggestions for meetings in the Chicagoland area, which I've copied from another BP member who posted these.  He's the industrious one so he gets all the credit.

John

In the meantime, I'll be attending every club I can and cold calling some brokers.

My schedule:

10/8 - WCRT NW Indiana Sub Group http://www.wcrt.org/meetings/subgroups.php

10/9 - Midwestrea of Chicago http://www.midwestrea.com/

10/14 - Chicago Area Real Estate Investors Association http://www.careia.org/upcomingevents.html

10/15 - Chicagoland Real Estate Connections Club Meeting http://www.meetup.com/Chicago-Realestate-Group/

10/20 - Chicago Creative Investors Association http://www.ccia-info.com/

11/5 - Oak Park/Chicago Area Real Estate Investors Group http://www.meetup.com/Oak-Park-Chicago-Area-Real-Estate-Investors-Group/

11/7 - WCRT Main Group http://www.wcrt.org/main.php

I hope to see some of you there.

Joseph Murdie · Answer

Ken,

I was in the same boat. ( Southwest suburbs of Chicago). I looked  for quite awhile checking properties , talking to realtors, local rehab specialists lol, and pretty much anybody I could.   I'm not a big fan of the MLS, because there is never enough room for profit.

I finally found a house in Plainfield that listed "plumbing issues not passing inspections" the Realtor listing the property never updated his notes.  I brought a friend, who happened to be a licensed plumber on the showing with me .

There were no plumbing issues. There was a cracked shower cartridge in one of the showers. 35 dollars for the cartridge, 50 dollars for the plumber and I closed at 300k. I currently have the house listed at 420k based on other comps.  I also paid attorney's fees for a letter giving permission from the bank to make the repair. Always consult your attorney.

Sometimes, having staying power brings good luck. Never give up. No guts, no glory. Good Luck!!

Joe

Larry Smet · Answer

Hey @Kenneth Goldman

My first deal I found through the listing agent of an REO.  It was in Northlake, IL and I found it on the MLS - can you believe it??  My 2nd was a short sale off the MLS (in Orlando though).  3rd through 6th deals were all in Chicago.  3rd was a traditional sale (pocket listing) that my realtor found - the same realtor that I worked with on the first flip.  The 4th - 6th were done by purchasing judicial certs.  The 4th through a wholesaler, the 5th and 6th by tracking properties coming up for auction and knowing the neighborhoods.  My realtors have been critical in all these transactions and I expect that they'll continue to find properties for me to flip.  Currently working on acquiring #7.

Having said all that, I'm currently also looking for good wholesalers in Chicago to keep things going.

Cheers

Larry

Kenneth Goldman · Answer

@Larry Smet

Curious as to how you found your deals in the Chicago market.  Thanks-Ken

How Does Fix and Flipper find First Deal (Chicago Market)

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