Starting a career in real estate investing can be hard if you don’t know where to look for deals or who to ask for direction, especially in a place like the Windy City. The fact is, the local market is competitive amongst investors and finding distressed properties for sale in Chicago can sometimes feel like searching for a needle in a haystack. Unfortunately, I can’t change the competitive investor climate. But, I can help you find fixer-upper homes for sale that could make growing your real estate portfolio a little easier. I’ve been successfully investing in Chicago a long time, so I know all the places to start looking. However, some of these avenues come with risks you should be aware of. If you’re here for some direction, you’ve come to the right place.
How to Find Distressed Properties for Sale in Chicago
Chicago’s economy was one of the hardest hit during the housing crisis and, as a result, limped along for years after. In an effort to expedite recovery efforts, several government programs were created a few years ago to complement the bank programs already in place. The primary aim of most of these programs is to reduce neighborhood blight and improve property values by providing real estate investing opportunities in targeted neighborhoods. And, because Chicago’s economy has not yet fully recovered, these programs could be around for a while. Let’s explore the different programs and the opportunities or risks they may offer you.
- City-Owned Properties. The City of Chicago owns vacant residential properties and often sells them to real estate investors through the Department of Planning and Development (DPD). If you can show that you intend to buy a city-owned property then develop it according to the city’s criteria, you may qualify for a discount or monetary aid for the purchase. But, the application process is lengthy and it can take months to get approved. Even then, the DPD will publish the intent to sell for 30 days to ensure the city receives the highest possible offer. So, actually getting a city-owned property in your hands takes time, maybe more time than it’s worth, if you get it at all. And, the city will take your real estate investment property back–and charge you for the hassle–if you don’t renovate it to their liking.
- Chicago’s Forfeiture Program. If you find a promising investment property on your own that is in severe distress, uninhabitable, or vacant, you can request that the City of Chicago sue the homeowner and release the property to you. Not every property qualifies and it can take up to a year to be issued a deed on one that does. But, if you’re willing to work with the Department of Buildings, the Department of Law, and the Cook County Circuit Court, the Chicago forfeiture program can you help you obtain a property that’s in pretty bad shape for a very low cost. You can then turn it into a potentially great house and sell it for full market value. You will, however, have to apply for the program and follow a strict renovation schedule if you’re awarded a property, so be prepared to deal with a lot of paperwork and dole out a lot of patience.
- Cook County Land Bank Authority (CCLBA).The program with the least amount of red tape is the Cook County Land Bank Authority. In fact, the process of buying an ugly house through the CCLBA is streamlined thanks to cleared titles, reduced fees, and fast closes–all of which are offered on the properties the program receives through donations or purchases with grant money. This allows you to focus on renovating a house and getting it back on the market as quickly as possible, which the CCLBA will want you to do according to their timeline and guidelines. The shape that these properties are in, however, can make adhering to the CCLB’s regulations tough. These severely distressed houses are located in some of Chicago’s hardest-hit neighborhoods, which can make the rehabs lengthy and costly. And, if you’re not able to keep up, the CCLBA reserves the right to enter, inspect, and take back the property at any time.
- Bank-owned Properties. Lenders, usually banks, sell the homes they’ve repossessed (REOs) either through their own websites, on local Multiple Listing Services, or at public auctions. Of the properties that go to auction, some are sold at the Cook County Sheriff’s Sale. Other Chicago foreclosures end up with the Judicial Sales Corporation. No matter where they’re sold, large deposits are often required and home inspections prior to buying are not always allowed. Also, the bank usually has a minimum amount they’re willing to accept, which is not always the list price, and competition among investors willing to pay that minimum is fierce. If you haven’t already guessed it, trying to buy foreclosed properties can lead you on the road to nowhere–or into a money pit if you overpay on a house you haven’t inspected.
Whether your goal is to flip houses in Chicago or buy property as a rental investment, there are still opportunities throughout the city to contribute to Chicago’s economic recovery–and make a profit–by investing in real estate. Many of the local government and bank programs are designed to help investors do just that. But, even the least complicated of these programs can be hard to navigate and leave you empty-handed. There is one program, however, that makes finding leads on investment properties easy.
The Best Program for Finding Easier Leads
I’m a competitive real estate investor and always have been. But, I’ve also had the best distressed homeowner leads to make investing in real estate easier than depending on any government or bank program. As an independently owned and operated HomeVestors® franchisee, I can leverage the nationally-known “We Buy Ugly Houses®” advertising campaign. As a result, distressed homeowners call me long before they lose their homes to a bank or get sued by the city. It’s a better program that creates value for distressed homeowners, HomeVestors franchisees, and the city of Chicago as a whole.
Make finding distressed properties for sale easier by reprogramming your lead-finding strategy. Contact HomeVestors® about becoming a franchisee today!
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