Like any big city, Chicago has its ups and downs: friendly people, Millennium Park, high taxes, and expensive parking lots.
But as an investor, there’s no place I would rather be.
I moved to Chicago just after the real estate crash in 2008. As a former financial analyst, it seemed like everything around me was on sale. There were beaten-down—and even burnt down—foreclosures and short sales everywhere.
For me, the city was perfect for house flipping, and a real opportunity to make a difference.
Chicago’s Real Estate Market: An Overview
Chicago is a desirable real estate market with a lot of growth. Still, the real estate market in Chicago is also fiercely competitive. While there are many opportunities, investors have to work hard to find high-quality leads.
Illinois property tax rates are double the national average. High tax rates mean that affordability is always a topic of conversation, like which houses are most desirable and which will sell fast. Due to these high property tax rates, foreclosure rates in Chicago also tend to be quite high.
To find the best quality leads, start by determining where you want to invest. Here are some recommendations.
The Best Neighborhoods in Chicago for Real Estate Investors
There are dozens of great neighborhoods in Chicago for real estate investors. But which ones will give you the best return on your investment?
Here are a few of my favorites:
- Pilsen. It’s close to the Loop, which is packed with all kinds of businesses and jobs. The area is also full of art and culture, and it’s gentrifying quickly. The Loop is expensive and full of renters; Pilsen is approachable.
- Logan Square. Logan Square is another neighborhood that’s close to downtown and has a lot of young families. It’s also very convenient for public transportation, but be aware that it has a high percentage of renters. Short-term and long-term rentals can do well here.
- South Shore. This neighborhood is a bit further from the city, but it’s full of families and retirees. It’s a great place to invest in fixer-uppers. Compared to many other Chicago locations, it’s supremely affordable. It’s one of the last places where you can find sub-$150k investments.
These neighborhoods are just the ones that I like; other investors may recommend something different, like Roger’s Park, Englewood, and Avondale. While every investor is unique, those locations tend to be a little more expensive than my investment strategies merit.
That’s why it’s important to thoroughly consider which neighborhoods you want to get involved in. Real estate is very local—the more you focus, the better your returns will be.
Now that you know where to look, it’s time to generate some leads.
Getting Quality Real Estate Leads in Chicago
As a newbie in the Chicago market, I first contacted a friend who was a real estate agent. “This isn’t the way to go,” he told me.
“What? Why not? Aren’t distressed properties everywhere?” I asked.
“Look, I’m an agent. By the time someone comes to me, they already want money for their house, and they want me to get them that money. I have a fiduciary duty to make you spend more.”
That made sense. But then, how did anyone find leads?
I soon discovered that people generated leads in Chicago in quite a few ways:
- They looked for FSBO classifieds. Today, you’d call them Facebook Marketplace, Zillow, or Trulia. Back then, they were primarily newspapers or Craigslist—-both have dwindled in popularity ever since.
- They found a neighborhood they liked, knocked on doors, and just asked if the person was interested in selling. They looked for houses with overgrown lawns or ones that needed maintenance, indicating that perhaps the person inside was a little overwhelmed.
- They sent out mailers. They would mail personalized letters to anyone in a specific zip code. They might not get many hits, but they only needed a few.
- They purchased lead lists. These lead lists were purchased by dozens, if not hundreds, of real estate agents and investors in the area. By the time you called a potentially interested seller, they were usually fatigued.
- They bought “free houses.” Tax sales, foreclosures, distressed properties—every state had it bad after the property collapse. It was possible to get houses in Chicago for virtually free, but those same homes also had a lot of problems.
- They went through wholesalers. Wholesalers are already “flipping” houses, and they’re doing it quickly. Wholesalers operate as middlemen, finding opportunities between buyers and sellers. They’re a great place to start, but they take their fee off the top.
- They looked at expired MLS listings. Expired MLS listings are listings that failed to sell. I tried this once or twice but discovered that expired listings fail to sell for good reasons. Frequently, they are overpriced or falling apart. Additionally, the seller’s agent’s contract doesn’t necessarily expire when the MLS listing does, so you may not be able to get the property without paying a fee.
Chicago’s a great city, but not in a way that makes it pleasant enough to cold-call people. I was interrupting people’s meals and invading their privacy. That was the opposite of what I wanted to do.
Thankfully, a friend then introduced me to HomeVestors®.
Make the Leads Come to You With HomeVestors®
Through their nationally-recognized brand, HomeVestors® brings the leads to you. When I became an independently owned and operated franchise owner, I found leads who were highly motivated, qualified, and willing to sell—people I could help. And that was thanks to the company’s “We Buy Ugly Houses®” real estate investing marketing campaigns, which did the leg (and lead) work for me. All I had to do was answer an email or pick up the phone.
With HomeVestors®, I no longer need to spend my time chasing down leads and convincing them to sell me their homes. And that can become your reality, too.
Do you want great real estate leads in Chicago? Find out how by becoming a HomeVestors® franchise owner today.
Each franchise office is independently owned and operated.