Where do you find properties in Chicago Metro?

Question

Hey everyone,

Brand new to BP but have been studying real estate for a while and am finally financially ready to make a move. I've been looking for 4+ unit MFRs but don't really see much on Realtor in the Chicago area, but I do see a ton on Loopnet. Is that the preferred way for these to be listed? Based on other things I've read, I had thought that Loopnet was a place where listings went to die, rather than a good place to find them, but perhaps Chicago is unique?

Scott Skinger · Answer

Go to Loopnet or Crexi, underwrite deals and call brokers. Sometimes your timing is right when a seller needs to drop a price and you might get other deals from the broker. Form relationships. Hustle.Talk to REI friendly brokerage houses like 2nd City, get knowledge and potentially leads from them. @Brie Schmidt @John Warren and others from 2nd City can help you out and have their specialty areas. Form relationships. Hustle.Talk to other Chicago MF investors like myself, go to meetups like @John Casmon had last night and talk to people about their deals. You will find deals that don't work for others (distressed, location, too big, too small, etc.). Form relationships. Hustle.There's a common theme here, but a lot of potential REI aren't willing to do the work. Forming relationships and hustling are essential in a tight market. Happy to help.Good Luck.

Gina Smith · Answer

I agree with everything that was said here. I will say, don't discount the MLS, however, if you're going to look there you have to be quick! I found a fantastic 4-unit property there but I was the first of probably 10 showings they had that day and I had run every number and was prepared to make an offer immediately which I did. If it's a good deal out there it will gone instantly. Find a good broker that can help you also. As everyone said, they usually have networks and can help bring you deals. It's very competitive in this area. Also, someone stated multi-family is overpriced. Many of the listings are over-priced! As my broker always tells me, know what you're willing to pay regardless of what they're asking. If they don't take it, then oh well, move on. Good luck in this crazy market!Gina

John Casmon · Answer

@Joel Falk Lots of good tips here. Where exactly are you looking? I have two deals right now that are too small for our business model.

Bob Floss II · Answer

@Joel Falk Basically, work on your team building. You should surround yourself with people that will help you succeed. I got a call from a client that she might want to sell her building on south shore. I called another client that buys in that area and connected them. They are working out the details now.

Robert Meyer · Answer

@Scott Skinger and @John Warren nailed it. Build your funnels, and hustle. LoopNet is a great place to run numbers and to find which brokers are active in various parts of the city. You might find a deal on there, but it's not likely as most investors have already passed up on those deals for one reason or another.A technique that can be useful is to build a broker/agent list and call 3 every day until you work through your list. Ask each one if they know of other brokers who might have what you're looking for. Do this for a month and you'll have a comprehensive list of who is making things happen around the city. Then follow-up with each every couple weeks on a rotation. If someone sends you a deal, work the numbers and get back to them within 12-24 hours. Even if it's not a good one, follow-up, show gratitude, and explain your criteria and why it doesn't work.Get in touch with wholesalers, too, as they are finding deals all around the city. Titan Wealth Group is a local one, you can sign up for their investor mailing list at their website. There's others, as well. Key to all this is knowing your criteria and exactly what you're looking for. If you're locked into small multifamily, that's cool. Know what types of returns you're looking for, what type of tenants you want, neighborhood types/class, financing you're going to pursue, etc. This will help your underwriting, and also prove useful for any brokers/agents who are trying to find something that fits your criteria.Good luck,Rob

Scot Howat · Answer

You should buy some condos like I do. That's where it's at.

Scot Howat · Answer

Multi units are overpriced

John Warren · Answer

Thanks for the mention @Scott Skinger!@Joel Falk Loopnet is not necessarily a bad place to look, but it is not the first place these deals go. This is in sharp contrast to how a residential agent like me would market a 4 unit. I would immediately put a 4 unit listing on the MLS as it gets maximum exposure for that type of buyer. In contrast, brokers who focus on commercial apartment buildings market these deals to buyers who they have relationships with. They attempt to find a list of active buyers who are looking for specific types of deals (yield, stable, value add, construction play, etc) and they send the deals directly to these folks. If you want to see multifamily deals you will need to have multiple "funnels". Brokers like me can search the MLS (not much there these days), and you should also be meeting up regularly with commercial brokers in the space. I have five or six brokers that I am staying in contact in the Chicago western suburbs, and I also have several in the South Bend, Indiana market as well.

Omar Khan · Answer

@Joel Falk Welcome to the club! It is brutal trying to find solid, cash flowing properties. It is even harder at the level you are mentioning because you have a lot of competition. Deals get listed on the MLS, LoopNet (deals go to die there) and through private, off-market channels. This is why relationships are critical. You should start actively networking.I believe @Brie Schmidt is a local and should be able to guide you.

Bob Floss II · Answer

@Joel Falk There's not one source. Some Realtors put their property on the MLS, some agents choose to only put them on Loopnet or Crexi, some only market them directly to investors in the area. You have to use multiple sources to search for properties.