Fix and Flip in Southside Chicago

4 Replies

Hello, looking to do my first fix and flip in South side Chicago. I’ve been outbid in the last 5 offers I’ve submitted. Would like to connect with seasoned investor in this market to get tips for what I could be doing differently. Thanks

Thanks @Samuel Pavlovcik

@Gbemi Munis - I'm also being outbid on many potential projects. It's not necessarily a bad thing, as you need to protect your margins, but the key is to increase your at-bats to find one that does hit. Below are a few high-level ideas that may help:

-There are like 20-25 Facebook groups dedicated to Chicago RE, and almost all of them have wholesalers posting deals - Southeast Chicago Real Estate Club, Chicago Real Estate Investors, Windy City REI, Best Chicago Wholesale Deals Live, Straight Up Chicago Investor Club, Chicago Real Estate Investors.....etc.

-The Cook County Land bank website has dozens (maybe hundreds) of heavily distressed properties, many of them in Southside neighborhoods. Check them out for free.

-On deals you were outbid on, follow-up with the agent wholesaler in 2 weeks and remind them you're there as a back-up offer. A lot of deals fall through and very few investors follow-up to catch them on the rebound. 

-Start some type of direct campaign whether it be calls or mailers (AND STICK WITH IT AS IT TAKES TIME)

-Really take the time to intimately understand your areas of focus, ARVs, and rehab costs. The more guesswork you can eliminate, the stronger the offer you can present. 

Originally posted by @Gbemi Munis :

Hello, looking to do my first fix and flip in South side Chicago. I’ve been outbid in the last 5 offers I’ve submitted. Would like to connect with seasoned investor in this market to get tips for what I could be doing differently. Thanks

We're seasoned & I'm going to assume you're already working with a realtor. Here are some of the reasons you may be outbid:

  • You're using a formula like the 65 or 70% rule while your competition is using their own Return on Investment (ROI) formula & are able to work with smaller margins. We threw out the formula and made our own determination on the minimum profit we needed per deal & started winning bids.
  • Your estimate for renovation is high. I will say that most newbies estimate too low. But if your estimates are high then your bids are low.
  • You're competing against owner-occupants who can offer more. Owner-occupants using FHA 203B or 203K loans can outbid you
  • If you're borrowing you may be losing out to cash buyers who can close faster, which means you're not being outbid.
  • How much EMD are you putting up? Serious buyers put up serious EMD. I get 2 of the same offers and one puts up $1K EMD while the other puts up $5K, I take the $5K offer
  • Your Proof of Funds isn't credible
  • That's a short list