A GLIMPSE INTO THE CHICAGO LAND MARKET VS. OTHERS

[Marcin Chojnacki]

Greetings fellow BP members. I've seen a lot of posts regarding questions on what cities are getting fix and flip investors good returns. Let me share how the Chicago Land area currently looks. Please share ACTUAL numbers from your most recent successes and their locations, curious to see how they compare. 

A very good benchmark in Chicago and suburbs is a 25% return on cash invested. Yes we have competition and there are plenty of "multiple offer situations" however with due diligence and a keen eye on the market it's not overly difficult to meet that criteria. When we do analysis if the property doesn't return a MINIMUM estimate 20% return on cash invested (semi conservatively) then we throw it in the trash and look for the next one. 

25% is a good benchmark however many times the realized returns on projects can well exceed that number. We have had returns in the 30's and mid 40's as well. Deals in that "higher range" are considered a steal and much harder to get. 

A good example of an easy flip in a Chicago land suburb:

Address: 832 Salem Ln. Carpentersville IL

Purchase: $62,251

Closing (Buy SIde, HUD does not pay title insurance): $1,800

Rehab: $37,000

Holding: $1,200

Closing Costs (Sell Side): $2,500

Commissions 3% (We waive our half): $4,080

Break Even: $108,831

Sales Price: $136,000 Net (139k with a 3k credit.. Sold in 4 days with multiple offers).

PROFIT: $27,169

Cash Invested: $99,500 (In illinois a tax credit is given at the purchase closing from the seller. Many times the funds due at closing are a few thousand less than the actual contract price. Other closing fees on the sell side and commissions are paid for out of buyer proceeds, in other words they don't come out of pocket). 

% RETURN ON CASH: 27.3%

Project Length: 3.5 Months (from time cash was invested to time cash was recouped).

Before and After Pics:

Once again, curious to see how other parts of the country are.

Thanks for sharing in advance and happy investing!

Respectfully,