Here are my tips for anyone starting to wholesale real estate in Chicago.Chicago Wholesale real estate
* Start in your backyard.
I suggest you do not go further than 10 miles from your current address. If you live in or near downtown, you can always start in the nearby college areas like University of Chicago, UIC, Chicago State and so on. Take out a map of Chicago and circle the 10 mile radius from where you live.
* Build a buyers list.
In order to have a good wholesaling business, you will need to find your clients before you have a product. This will speed things up for you and help you establish good relationships with the current cash buyers in any particular area. You will find these cash buyers by putting up bandit signs that reads,
“Rehabber special 3 bed 2 bath - cash buyers only – 50K – 555-555-5555”
You will begin to receive calls immediately. I suggest you place your yellow signs on the on ramps on 290 and 90/94. There is a lot of traffic there from people going to and from downtown. Also, the local REIA has a website for Illinois investors with details regarding meetings, fees, and other networking opportunities. Go to as many as you can and start building relationships with industry professionals. As a wholesaler, you want to add 10-20 buyers to your potential clients list every week.
* Market to find sellers.
Once you have your buyers in place, you will know what areas to start looking for deals in. For me, I have strong buyers in West Chattam, Washington Heights, Ashburn, and areas alike. Using this key information, you must start marketing in the area for deals. You will start by using bandit signs that say, “We Buy Houses”, door hangers that say the same, and direct mail pieces that are targeted to non-owner occupied houses. Do not worry about the bandit sign police in Chicago, they have bigger fish to fry than taking signs down and giving fines. * Bonus Marketing Tip In order to have constant leads and a pipeline of deals building up, you must have constant marketing and systems implemented to streamline your marketing. For instance, I trained someone to put my bandit signs up using a map that I drew up. Since Chicago is a grid, it is very easy to go to google maps and find what corners I want my signs to go.
* Put a contract on the property
Once you find a property that your buyers will buy, you must know how to put a contract on the property. Many lawyers and realtors in Chicago are not familiar with contracts from wholesalers so just ask a local real estate office and get the multi-board state contract for Illinois. When looking up area comps, we use Redfin because it has a easy to use interface and its got the pin numbers associated with all the properties you search. Anyways, once you get the contract, have a realtor walk you through on how to fill it out. The only difference you will add once you negotiate a contract is when you put your LLC or name next to buyer, just add “and or assigns”, which will make the contract assignable.
* Get Paid!
Once you have your contract, you will assign it to the buyer. You will have a separate basic agreement that will assign the contract over to your buyer. You will want to use Chicago Title to close the deal. You or your buyers attorney will hand in the original contract with the assignment contract and the Title company will handle the rest. It will take a few days to set up a closing because of the water certification. Since the City laid off half the water department due to budget cuts, it will take 20 days instead of 10, for the closing to be set up. But if your going to make 2-4K for this, its worth the wait!