Newbie looking to get into house flipping. Is completing a flip in Chicagoland area realistic with 50-60k cash and no access to mortgages or desire to use hard money yet. If so any recomendations on how to do it/areas to focus on.
I see a lot of cheap properties in NW indiana. Kind of hard to judge the resale after rehab value though. I signed on with all the local wholesalers but some of the "deals" they are sending me are not really deals at all. Lastly, if anyone has recommendations for good wholesalers please message me.
Why don't you want a traditional mortgage and desire to use HML ?
It depends on the neighborhood you're looking at. To find a house + rehab + holding/closing/realtor costs = Under $60K. Pretty tough, unless you're looking at the C/D areas. Maybe northwest IN or WI areas.
If you are in deerfield and hands-on, maybe look into the kenosha / milwaukee areas. With the lower acquisition price point.
If you can use HML, you could leverage your money to buy a better neighborhood where there are more demand for quality houses. As long as the numbers make sense to pay the high costs associated with HML.
I am actually in Chicago which is why I was thinking NW Indiana area or west suburbs.
For example a property like this in calumet city for 36,500 https://chicago.craigslist.org/sox/reo/5823253236.html
Hi Henry- it is possible to flip properties in NW Indiana for an all-in amount of $60K but it wont be easy to find those deals. You could find properties in Hammond that are flippable in that range and and an ARV around $80-90. A lot depends on if you do the work or hire a contractor. Doing it yourself is cheaper but then you have to deal with the license requirements for whatever town you are in. Our market experienced a lot of appreciation and flippers are struggling to find good deals. I know many who will take a quick $15K on a flip using the same amount of money you are using. Obviously stay away from Gary and even Lake Station. You can find stuff to buy and rehab there for under $60K but you wont be selling it quickly. If there was a away for you to get an extra $20K, that would make a big difference on what/where you can buy.
Which wholesaler do you currently subscribe to?
Thanks for the response. I have been looking at wholesalers on craigslist and put my email in Cookcountywholesaleproperties and a few other sites.
How are fix and flip deals usually found in this area? Through wholesalers or doing the wholesalers job yourself and mailing letters, etc.? I would be more comfortable using hard money after doing this successfully at first a few times. Also if a deal only makes 15k and the hard money interest rate is 12-15% how are you going to make a significant enough profit? Even with near perfect credit score I do not qualify for mortgages due to just graduating college with no 9-5 job. I used to have a decent sized business and if I find a job soon that could change. I have a few potential investors.
In Chicago I would say doubtful to be profitable. I don't know NW Indiana
Your risk in these C neighborhoods is comps/ARV and moving the property quickly. You can have any profits disappear quick on carry on costs and if you don't know your farm you may over improve to a point it won't appraise out or worse yet not get a buyer
Depending on how close you are to Chicago, you might be better off using that money to pick up a rental in that part of Indiana. There is a wholesaling group up there that I have worked with and know the ownership personally. Have visited the operation several times. From driving around the area with them, there is a very strong ROI for rentals or RTO in that area (they are close the border). People commute across border to Chicago because of how much it costs to live in town. Not to say there isn't opportunity for flipping, just food for thought.
I agree with Adrien. You're just under the amount needed to do a flip in a fairly decent area. I would try to find another $10-$20k and start in Northwest Indiana. If possible, try to do as much of the work as you can yourself. That will save you money too. Good Luck!
I've wholesaled several properties this year to IL investors who are flipping here and using hard money. Sure they have smaller profits because of the points/interest for the hard money but at the end of the day- some profit is better than 0 profit not doing anything. Just a thought.
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