Every time I meet new real estate investors, I’m always surprised at the lengths they go to for sourcing good leads. Of course, I was no different when I started out. Eager to find the best investment property in Chicago and build my portfolio fast, I put offers on bank foreclosures, attended probate auctions, and chased city-owned properties—you name it, I did it.
So when my wife and I met Joyce over at Parachute restaurant in Avondale, I was impressed by her interest in making things easier on herself when it came to finding distressed homeowners in Chicago. She already had a few ideas up her sleeve, and I had one of my own. So after dinner, we scheduled a phone call to talk them over.
Ideas for Sourcing the Best Investment Properties in Chicago
In the years since the housing market crashed, acquiring properties through the City of Chicago, the Cook County Land Bank, and Chicago’s forfeiture program have been all the rage. Foreclosure auctions have been pretty popular too. Government and bank programs like these offer the prospect of buying and renovating a property cheaply so that solid returns on investment are more likely.
But Joyce was already hip to how dealing with these programs can be more of a hassle than a help. Instead, she was looking to mix things up by blending old and new investment property marketing techniques that would reach distressed homeowners before they lose their homes to a bank or government agency. That’s the only way to go in my opinion, so she was on the right track. Let’s take a look at the options she had in mind.
Lead-generating websites. In the last ten years or so, the internet has experienced a boom of web traffic, as have the sites and services that aim to direct it. And the real estate investing industry jumped right on board. For a fee, you can build a website—or have one built for you—that is search engine-optimized, publishes blog content, and attracts homeowners living in specific regions. If a homeowner visits your site and fills out your online forms, you’ve got yourself a lead.
The problem with this strategy, though, is that it’s one of trial-and-error. You won’t know which service, or what kind of content, works best until you’ve tried a few. With this in mind, some investors spend several thousand dollars on multiple sites in an effort to expand their reach and cover all bases. But the expenditures don’t stop there. To drive traffic to your sites you’ll also need to advertise—online and off—whether it’s with pay-per-click ads, Google AdWords, television commercials, or postcards and other printed materials. Many services will do this for you, but the cost of doing business with them won’t necessarily help to build your own.
Online classified forums, such as Craigslist, allow buyers and sellers of everything from houses to home furnishings to find each other quickly and, often, for free. As a real estate investor, you can post ads or peruse the listings to create connections with homeowners wanting to sell. And it only costs your time. Ideally, you’ll want to post multiple times each week, and in numerous categories, to keep your ads current and on page one. When searching for listings, be sure to include multi-family vacancies. If a landlord is having trouble finding tenants, they might be willing to sell.
However, time is money and, especially as a new real estate investor, you should be spending it wisely. Sites like Craigslist are sophisticated enough to detect similar ads from the same source and can limit or prevent posting activity depending on the content and frequency. To circumvent this, you’ll need to vary your verbiage and, possibly, your contact information. Though it’s not hard work, it’s a lot of extra work. With high competition and low conversion rates, you’re better off just staying off Craigslist.
Lead lists and expired listings
Contacting homeowners directly through expired listings and lead lists has been standard practice for finding motivated sellers since before I started investing. Whether you make a call or knock on a door, you hope that the homeowner who answers will be happy to see you—and ready to sell. Afterall, they either tried to sell the house previously or have found themselves in financially distressing circumstances, both of which indicate a desire to move on. If you catch them at the right time, you could potentially grab a good deal.
Unfortunately, working with lead lists and expired listings can be an exercise in futility. Lead lists don’t always provide the most up-to-date information available and what they do include might not be information a homeowner wants you to have. Yes, divorces and deaths generally prompt the need for a quick sale of a home, but they also put people in a heightened emotional state. So approach distressed homeowners with caution and compassion. As for expired listings, they too may contain information that is out of date, inaccurate, or just irrelevant. It’ll be up to you find out for sure–or pay someone who will. Old data can get you nowhere fast.
Driving for dollars
A new twist on pounding the pavement, driving for dollars takes you right to the fixer-upper homes that might make a solid investment. As you drive around town, the key is to look for older, smaller, “ugly” houses in good or transitioning neighborhoods. Boarded windows are telltale signs of vacant or abandoned homes, but even a neglected lawn may indicate that the homeowner can no longer keep up with maintenance costs. You may have to do a little research to find contact information for certain homeowners, but your efforts might pay off and fill your gas tank many times over.
Then again, a little research can turn into a lot of time. The hours you’ll spend driving will definitely add up. That could be nothing, however, compared to the hours you’ll spend locating a homeowner—especially if the property is vacant or abandoned. City and county websites, as well as online public databases, can sometimes help in this regard. All the same, don’t expect to make more progress than running into dead ends.
All in all, each of these real estate lead generation strategies might get you in front of a home seller. But because I’d rather spend my energy where it really counts—on buying, renovating, and selling houses—I follow a different path. That path, by the way, brings the motivated home sellers to me.
Tip the Scale in Your Favor to Find the Best Leads
Owning a HomeVestors® franchise, as I do, is the only way to go for sourcing the best leads. Through print, radio, and television, the HomeVestors team markets to distressed homeowners directly so they know where to go when it’s time to sell. And the well known “We Buy Ugly Houses®” national brand, as well as a variety of other marketing tools for investors, are available to every independently owned and operated HomeVestors® franchisee. This takes the guesswork out of where to buy investment property, making flipping houses in Chicago easier than ever.
When Joyce heard that investing in Chicago real estate could really be that simple, she hopped on another call. If you’re a new investor weighing your lead generation options, it’s not a bad idea to do the same. Tip the scale in your favor and contact HomeVestors today.
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