Right before stay at home orders were issued in March, I was at Cork and Kerry in Bridgeport for my regular hangout with other real estate investors. A few of them were pretty new to the business, and they were worried. Was this COVID-19 thing that everyone was talking about going to make the market tank? Would Chicago real estate be ok?
Those of us who have been around for a bit knew better though: this kind of economy can present a ton of great investing opportunities. In a lot of ways, it is an ideal market, and the most important thing is to obtain qualified leads.
Not much was known as the pandemic started, but it was clear that this was correct. People looking for ways to get ahead in a tough economy know that Chicago real estate investing during COVID-19 could potentially be their best opportunity. And the best way to take advantage of that is to find the right houses.
How the Chicago Real Estate Market Reacted to COVID-19
This has been a very interesting market, and the details were unexpected. This wasn’t exactly like the housing crash of 2008, with its tidal flood of foreclosures and sales. While the economy contracted, it didn’t automatically make homes underwater like it did back then. In addition, protections for owners prevented a wave of distressed houses coming onto the market.
The initial impact was that the market got tight in the early months of the pandemic. Few were selling; few were buying. Listings in May 2020 were down 43% from May of 2019. But by July, inventory had stabilized and matched July 2019’s numbers.
The most important thing is that prices remained unchanged. There are still a lot of people buying houses and moving (especially into the suburbs in Cook and the collar counties).
That said, there are still a lot of distressed houses on the market. There are still a lot of people who are worried about what is going to happen to the economy and who want to sell fast. In fact, Cook County is at the top of the list of foreclosure risk. There will be more and more distressed houses on the market as the long tail of the pandemic unfolds which could lead to more opportunities for investing after finding the right one.
The Importance of Finding Distressed Houses in Chicago
Even if you’re new to real estate investing, you probably know a thing or two about Chicago. For one thing: it’s big (hope you were sitting down for that). There are a ton of neighborhoods. And you need to find the right ones. You need to find houses that you can buy for a lower price and that will sell.
What does that mean? It means that while Wicker Park is always hot, you aren’t really going to find great deals there (most likely). And while you might be able to find distressed homes in Little Village, the market isn’t exactly going to create opportunities for huge windfalls from hidden gems there.
So you have to pinpoint neighborhoods where there are a few things happening:
- Higher than usual foreclosures
- Prices that are affordable for you
- Still a desirable neighborhood for people who are buying
Because, as we see, people are still buying. And they’ll be looking for homes in their price range in good neighborhoods and the suburbs. And when the distressed market really starts to unfold, you’ll want to be the person who gets those leads.
There are a lot of ways to get leads, some bad, some good, a few that are miles above. For instance, you could search through Chicago ownership records to find out who owns abandoned property, but that takes forever, and might not bear fruit.
You also could look on Craigslist for Chicago real estate deals, or comb through ads. That’s inexpensive, but there are also a lot of fake leads, wasted time, and even outright scams.
A lot of investors look for property at the Sheriff auctions, but there are a few problems with that. The biggest problem is that if there is a good house there, you aren’t the only one sizing it up. Everyone who wants to make money in real estate is combing through the auction. People and institutions with real deep pockets want to get the best houses.
So you want a way to find off-market Chicago real estate before it goes to the auction. Before everyone is trying to buy. And before it gets priced out.
That’s not always easy. It’s especially hard if you are just starting out. But there’s a really good way.
The Best Way to Invest in Chicago Real Estate During COVID-19
As the Chicago real estate market truly begins to react to COVID-19, there are opportunities for investors. There are opportunities even if you’re starting out. But as more and more people start to invest, you need a better way to get leads. That can come from being an independently owned and operated HomeVestors® franchise.
Ever since I became a franchisee years ago I’ve gotten incredible leads. Everyone knows our marketing: “We Buy Ugly Houses®”. So people with distressed houses call me in real time. I get a HomeVestors lead from someone already eager to sell. It’s a quality lead, every time. I have to decide if it is right, and make the deal, and do the work, but the work of getting leads was slashed. In this economy, that’s practically invaluable.
Months after that March meeting, we were able to go back to Cork and Kerry and sit outside. It was clear that while the market had surprises, real estate investing in Chicago was strong. And as we move into the next stage, it is clear it will remain strong. Finding good qualified leads could be your best way to invest this year. If you want to know more, request information about becoming a franchisee today.
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