Joanne was new to real estate investing and, while she was eager to find her first house to buy, rehab, and sell, she didn’t know where to begin finding real leads. I told her, “Are you kidding—Chicago is full of opportunities to buy houses!” Of course, some neighborhoods are more promising to invest in than others. Knowing which ones will help you focus your lead generation activities.
Promising Neighborhoods to Invest in Chicago Suburbs
Chicago is a huge city with a lot of good suburban neighborhoods where there are a number of opportunities to find investment properties. It’s always best to be familiar with the area you invest in by doing some research first. An experienced real estate agent can also point you in the direction of some properties, but they are not likely to be the best deals. Remember, real estate agents survive on commissions, so they are not motivated to show you the cheapest properties. But don’t fret, there are still ways to generate leads and grow your real estate investment business. Let’s take a look at some of the best options for Chicago investors.
Pinpoint local foreclosures.
Chicago still has a solid inventory of foreclosed properties and there are plenty of ways to find them. You can connect with a real estate agent, look on bank or credit union websites, or even simply pound the pavement looking for signs in your target neighborhoods. Just be aware that buying a foreclosure is not for the faint of heart. You will need to perform due diligence to understand the property’s condition and whether there are additional liens on it. Even then, competition can be high and you may not win the house. Be sure you know how to evaluate a property, perhaps with HomeVestors® proprietary software, ValueChek™, and skillfully craft an offer that the bank will take.
Purchase lead lists.
A quick Google search will bring up tons of companies that can provide lead lists tailored to your particular target market. Of course, they generally charge for this valuable information, and the quality of their data may be out-of-date. Or worse, you might purchase a list that has been sold to other investors many times over, resulting in either the property already being sold or an encounter with a wary homeowner who is feeling harassed by too much investor interest.
Also, keep in mind that getting your hands on a lead list is the easy part; you will still have to have a marketing outreach plan like a direct mail campaign, cold calling, or even knocking on doors. These strategies generally have a low response rate and an even lower conversion rate.
The CCLBA is a local governmental entity charged with revitalizing neighborhoods that have become blighted since the housing crisis. They receive donated and forfeited properties as well as buy some houses inexpensively. Then, they clear up any taxes and liens and re-sell them at a low price point.
There’s a catch, however. Each deed transfer comes with something called a “soft mortgage.” That means if you don’t rehabilitate the property within their specifications and timeline, they retake the deed from you. If you are relatively new to real estate investing, this can be a very real risk.
Get a deal from Chicago’s forfeiture program.
Chicago’s forfeiture program also aims to fight neighborhood blight by helping investors effectively sue homeowners of vacant or abandoned houses and take ownership. You need to locate the distressed property yourself and then apply for legal assistance through the forfeiture program.
Beware, however, that it takes a lot of time to go through the paperwork-heavy process—up to a year!—and in the end you might not be successful. If the property owner or other stakeholder is located during the process, you may not be awarded the property by the court. Even if you are able to acquire a house through the program, you will still have to adhere to tight guidelines for renovation or face court-ordered fines.
Invest in city-owned property.
You can apply to purchase a low-cost house that is owned by the city of Chicago and, if your redevelopment plan provides some concrete benefits to the community, you may even qualify for their funding program. You’ll need to show detailed site plans and convince them that your project will provide a positive community economic influence, for instance, by creating jobs. The biggest downside to buying a city-owned property is their lengthy timeline. It may take them up to nine months to review your application!
Cut the Time and Effort for Finding the Best Deals
As an experienced real estate investor, I have tried all these approaches for lead generation. But, I have to say, that finally making the decision to become a HomeVestors® franchisee was a turning point in my real estate investing business. I no longer spend too much wasted time sorting through online leads that go nowhere and licking envelopes for marketing campaigns. Instead, I leverage the nationally-trusted “We Buy Ugly Houses®” marketing campaign so that distressed homeowners call me first. If you are eager for more leads to grow your real estate investment business, I recommend reaching out to HomeVestor®.
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