Issues with Investors in Chicago

Wholesaling
9yFollow

Issues with Investors in Chicago

Adrienne Curtis
Real Estate Broker · Chicago, IL · Member since 2015 · 123 posts · 7 votes
I have a couple of really good properties in Chicago and St. Louis areas but I'm really having a hard time with investors. Either the property isn't in the area they're looking for, or they're not seeing the equity. Any hints as to what I may be doing wrong? I have a lot of motivated sellers but no buyers
0Reply
50 views

Most Popular Reply

Natalie KolodijBusiness Member
Moderator
Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
9y

You're doing things backwards. 


Talk to the investors first and find out what kind of properties they want and how much equity they require to buy a deal.

Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
Kolodij Tax & Consulting
WebsiteView Page
1Reply
See this reply in the discussion

27 Replies

Jump to latestLatest
  • Natalie KolodijBusiness Member
    Moderator
    Tax Strategist| National Tax Educator| Accepting New Clients · Member since 2014 · 3k+ posts · 4k+ votes
    9y

    You're doing things backwards. 


    Talk to the investors first and find out what kind of properties they want and how much equity they require to buy a deal.

    Podcast Guest on Show Pay Less Tax to the IRS This Year With THESE Real Estate Tax Strategies
    Kolodij Tax & Consulting
    WebsiteView Page
    1Reply
  • Adrienne Curtis
    OP
    Real Estate Broker · Chicago, IL · Member since 2015 · 123 posts · 7 votes
    9y
    Natalie Kolodij when I ask most of the buyers what they're looking for, they're looking in heavy traffic areas like North Side of Chicago where there aren't many fix and flip homes. Most of the opportunity in Chicago lies on the South and West side with a couple of gems North as well. Maybe I should go on foot to locate some properties North?
    1Reply
  • Brie SchmidtBusiness Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes
    9y

    @Adrienne Curtis - It could be the area.  Chicago has risky areas that investors don't want to deal with.  Or the numbers you are presenting are not accurate enough and it isn't a good deal 

    Podcast Guest on Show #132
    Second City Real Estate4.821 Reviews
    WebsiteView Page
    1Reply
  • Adrienne Curtis
    OP
    Real Estate Broker · Chicago, IL · Member since 2015 · 123 posts · 7 votes
    9y
    Brie Schmidt that's good feedback. I can definitely see the areas being an issue as a lot of them are developing but slowly
    0Reply
  • Ray Harrell
    Investor · Chicago, IL · Member since 2016 · 1k+ posts · 930 votes
    9y

    Most of the properties that are distressed are also in distressed areas with high crime. People aren't ready to invest in those areas yet...if they are dumb. Cities usually show signs of areas improving. You just have to know what to look for. Two words...Cabrini Green!

    0Reply
  • Jeff Burdick
    Investor · Chicago, IL · Member since 2016 · 515 posts · 247 votes
    9y
    Originally posted by @Ray Harrell:

    Most of the properties that are distressed are also in distressed areas with high crime. People aren't ready to invest in those areas yet...if they are dumb. Cities usually show signs of areas improving. You just have to know what to look for. Two words...Cabrini Green!

     What areas of the city do you like as improving currently?  

    0Reply
  • Ray Harrell
    Investor · Chicago, IL · Member since 2016 · 1k+ posts · 930 votes
    9y

    Oh, I'm no expert in gentrification by any means. I just look at what history tells me from the time I was born here til I moved back 5 years ago.

    0Reply
  • Andrew Johnson
    Real Estate Investor · Encinitas, CA · Member since 2016 · 3k+ posts · 3k+ votes
    9y

    @Adrienne Curtis I don't think you're challenge is unique to you.  Every market is going to have good areas and challenging areas.  Most of the people I know that invest generally have a philosophy.  Trying to get an investor to the South side that wants to be in the North side is going to be a massive challenge.  They are two entirely different value propositions.  I know that some will say "numbers are numbers" but everyone has their comfort zone.  Are you talking to investors that already have had success on the South side?  If so, odds are your numbers don't add up for them.  If the first thing out of an investors mouth is "Do you have anything on the North side?" then you're probably just talking to the wrong investor (about that particular property).  

    1Reply
  • Jaclyn McClellan
    Real Estate Agent · Chicago, IL · Member since 2016 · 176 posts · 73 votes
    9y

    Maybe find a couple of the investors that you talk to that would be willing to give you feedback. Ask them what you're doing that they don't like or if they need more information, or if they are focusing in different areas, etc.

    1Reply
  • Frank S.
    Specialist · Chicago, IL · Member since 2015 · 870 posts · 345 votes
    9y

    Are they "deals".  The market is a little dry. Check your numbers or post here for feedback. 

    0Reply
  • David Dachtera
    Rental Property Investor · Rockford, IL · Member since 2014 · 4k+ posts · 2k+ votes
    9y

    @Adrienne Curtis,

    It would help if you could find the buyers FIRST, then shop for what they want - "fill their orders", so to speak.

    1Reply
  • Adrienne Curtis
    OP
    Real Estate Broker · Chicago, IL · Member since 2015 · 123 posts · 7 votes
    9y

    @Ray Harrell I completely understand where you're coming from. Most of the properties I choose are in Chicago by longtime older owners with no signs of high crime. I'm very familiar with the Gold Coast area and plan on working there soon. However, I'm currently working in areas that are already well-established and that are not crime riddled blocks near South; That's what I really try to stress to the sellers, you're going to see your investment come back to you in the area because if you don't sell, you can still rent or even do a rent to own deal. Chicago's rental market is steadily increasing. Hint from Chicago Tribune,  "In Cook County, from 2007 to 2014 the number of 25- to 34-year-olds who are renters surged 40 percent, an increase of 75,753 renters." Most of those renters hope to own their own homes in the future, much like what I want to do as well. For example, I have a home in Calumet Heights I'm working with and the renter-occupied housing has  increased 5.8% recorded from 2000 to 2010. 

    The rental/home buying market can be changed by renting out to those who can't afford to buy now, but can save money while renting in order to do so. It's a pretty fair trade off in my opinion, unless the buyer is looking for a quick cash flip.

    0Reply
  • Adrienne Curtis
    OP
    Real Estate Broker · Chicago, IL · Member since 2015 · 123 posts · 7 votes
    9y

    @Jeff Burdick based on my experience, there are areas like Chicago Lawn, Calumet Heights, New City, Archer Heights, etc., are good areas with like 1-2 empty vacant lots. There's open opportunity for dealing with the working class family vs areas that are filled with crime. 

    0Reply
  • Alex Bok
    Real Estate Agent · Chicago, IL · Member since 2016 · 283 posts · 71 votes
    9y

    @Adrienne Curtis what areas in Chicago are your properties. Am interested here!

    0Reply
  • Adrienne Curtis
    OP
    Real Estate Broker · Chicago, IL · Member since 2015 · 123 posts · 7 votes
    9y

    @Andrew Johnson I see what you mean. Most buyers up North know the benefits and pursue the better areas. That's understandable. I'm working to gather as many South Sider buyers as possible, especially new investors now

    0Reply
  • Adrienne Curtis
    OP
    Real Estate Broker · Chicago, IL · Member since 2015 · 123 posts · 7 votes
    9y

    @Jaclyn McClellan thanks for the tips! 

    0Reply
  • Adrienne Curtis
    OP
    Real Estate Broker · Chicago, IL · Member since 2015 · 123 posts · 7 votes
    9y

    @Alex Bok I've emailed you a couple of properties before from my email. I'll DM you so you know what email is me

    0Reply
  • Elbert D.
    Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
    9y
    I agree what David said. Especially with wholesaling. Find buyers first. There is a lot of people buying on the south side and west side. I don't run into too many people that actually wanna invest up north and I can understand why. But the biggest thing that most investors get ticked off about(myself included) is the numbers generally are waaaaaaaaaaayyyyyy off. Rehab cost are too low and/or ARV numbers are too high. Just a tip here is to always be conservative with the ARV numbers. If they come back higher than expected that makes the deal icing on the cake. But as of now as I have posted in several threads inventory is very low now. Not that many good deals are present. But for me personally I try to provide value to any investor that buys from me. I want to be the go to guy in Chicago/Illinois!
    0Reply
  • Jeff Burdick
    Investor · Chicago, IL · Member since 2016 · 515 posts · 247 votes
    9y
    Originally posted by @Ray Harrell:

    Oh, I'm no expert in gentrification by any means. I just look at what history tells me from the time I was born here til I moved back 5 years ago.

     Gentrification in Chicago is something I tend to research extensively.  But I'm always interested in the opinions of others.  I'd be curious what your thoughts are.  I've only been in the city for 7 years so I don't have the long term perspective that some others do.  I've heard stories of how places like Lincoln Park and Bucktown used to be sketchy and that's amazing for me to think about.  

    0Reply
  • Ray Harrell
    Investor · Chicago, IL · Member since 2016 · 1k+ posts · 930 votes
    9y

    Yeah, right before I moved to Rogers Park it was sketchy. People asked why I would dare move there. But I've been there over 4 years and never an issue. Worst thing are the few pan handlers you come across, but they have been there longer than me. It's almost like Mayberry there...at least where I live.

    0Reply
  • Dooreuhn Cee
    Real Estate Investor · Chicago, IL · Member since 2014 · 229 posts · 171 votes
    9y

    I'm looking for south side deals now.  Not much cash flow on north side.  

    Send me what you have available and I can tell you why I choose to pursue them or not.

    0Reply
  • Elbert D.
    Real Estate Entrepreneur / Investor · Chicago, IL · Member since 2016 · 688 posts · 367 votes
    9y
    Jeff Burdick chicago is getting heavily gentrified lol.....they are having more and more people in the city move to the burbs or to Indiana.
    0Reply
  • Adrienne Curtis
    OP
    Real Estate Broker · Chicago, IL · Member since 2015 · 123 posts · 7 votes
    9y

    @Dooreuhn Cee

    I'm about to request and connect with you now

    0Reply
  • Adrienne Curtis
    OP
    Real Estate Broker · Chicago, IL · Member since 2015 · 123 posts · 7 votes
    9y

    @David Dachtera and @Elbert D. I just recently caught a surge in buyers now after making this, so I'll definitely be asking them more questions up front to make things easier. Thanks for your response!

    0Reply
  • Crystal SmithPro Member
    Moderator
    Real Estate Broker · Chicago, IL · Member since 2014 · 2k+ posts · 1k+ votes
    9y
    Originally posted by @Adrienne Curtis:

    Any hints as to what I may be doing wrong? I have a lot of motivated sellers but no buyers

     There's isn't enough info in your post to answer your question but I'll give it a shot.  The common reason that folks like yourself are unable to move a property are:

    • Location- High crime or high traffic  block (There are always motivated sellers in these types of location) 
    • Price to High so not enough margin for flippers
    • Your comps are wrong (We see this more often than not)
    • Renovation estimate is wrong
    312-681-7487
    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free