Hunkered down in a Chinese restaurant somewhere in the middle of the Windy City, Al Pacino’s character, Ricky Roma, in 1992’s Glengarry Glen Ross, laments about investments while sharing a drink with a mesmerized prospect: “Stocks, bonds, objects of art, real estate. Now–what are they? An opportunity. To what? To make money? Perhaps.” Roma smooth-talked his clients into shady land deals in Florida and Arizona when so much legitimate potential likely sat beneath his cinematic feet in Chicago.
A 90’s movie script is a movie script, however, and while Roma’s clients undoubtedly made some bad choices in time zones on either side of the Midwest, you can indeed map out a successful strategy by investing in property in Chicago. You just need to separate the wheat from the chaff, knowing which deals to pursue and which deals to avoid; whose advice to take and whose advice to ignore. To maximize your return on investment, just be certain to heed the following dos and don’ts while keeping tabs on the pulse of the market.
Thumbs-Up Practices For Chicago Property Investing
A common sense approach to real estate investing involves steps you must take in order to optimize your return on investment. Some advice rings true no matter where you choose to buy and other guidance suggests you study the Chicago market inside-out.
Location. Location. Location. The age-old adage warrants all your attention. If you do nothing else, find the right Chicago neighborhood in which to buy, renovate, and sell homes. As the votes roll in, many observers see Avondale as one of the most appealing spots to purchase undervalued properties, both in Chicago and the nation. While seemingly sweet deals might present themselves elsewhere, don’t discount this hip, blue-collar locale.
Act Fast. Those who hesitate might not only be lost but also late to the buy-low, sell-high party. If you’ve done your due diligence on market comps and have the resources to buy a property, trust your instincts. With competing buyers moving in, waiting a week before closing a deal might mean the outlay of more cash than you’ve budgeted for a house purchase.
Prepare to Be Surprised. Everyone likes pleasant surprises now and then. However, you could likely do without the kind of revelation unveiled in an investment home purchase. Oversights might cost you money and you cannot be unprepared for these contingencies. Home inspectors aren’t perfect and structural damage might be overlooked. Do yourself a favor. Take your budget for a fixer-upper purchase and slap on a cushion, just in case.
Thumbs Down Approaches for Real Estate Investing in Chicago
Right along with the best practices come situations you want to sidestep. Keep in mind that for every potential peril, there’s usually a workaround that merely takes a little more time, insight, and patience.
Don’t Rely Solely on the Government. One of the biggest lies includes, “I’m from the government. I’m here to help to help.” Programs such as the Chicago Forfeiture Program and the Cook County Land Bank Authority often act as valuable resources for investors looking to acquire blighted properties. Just don’t wager the proverbial house on a process that requires legal wrangling and protracted bureaucratic processes. Successful real estate entrepreneurs know when to enlist the help of these agencies and when to walk away from otherwise promising deals that may get thwarted by red tape.
Don’t Expect to Get Rich Quick. Patience is a virtue and definitely a quality that should be imbued in real estate investors. While some economists project Chicago real estate values will decrease over the next year, don’t mistake projections for a sure bet. By contrast, view buying and selling homes as a long-term pursuit. As with most other speculative ventures, you’re likely to witness ebbs and flows in market values rather than straight-line growth. Illinois’ increasing property taxes, for instance, could be a major factor in local market changes this year.
Don’t Listen to Your Co-worker. Some people should hang onto their day jobs. You might start out in the real estate arena as a part-time investor and it’s probable that the person in the next cubicle did, also. Just because that individual may have struck a little gold in a home-buying deal, that good fortune by no means makes them an expert adviser. Seek out an experienced real estate investing mentor who can guide you through the nuances of investing.
Covering the What-ifs
You can’t possibly control every variable in the real estate investment world but you can increase your odds of success by joining forces with a trusted franchise. HomeVestors® nationally-recognized “We Buy Ugly Houses®” marketing campaign has connected independently owned and operated franchisees with more than 140,000 home purchases across the nation since 1996. If you’re ready to grow a real estate investment business, seasoned HomeVestors Development Agents can help expertly guide you through the buy, renovate, and sell process.
Contact HomeVestors® today to find out how to transform a little piece of Chicago into a career of potential prosperity.
Each franchise office is independently owned and operated.