All Forum Posts by: Van Blackman

Excellent work @Larmon Cummings Jr!

Keep persisting, you're going to do great!

@Andres M.,

Hello! Congrats on joining BP!

In my opinion, no. A distressed home that's been sitting on the market for an usual amount of time is not always a red flag. As a matter of fact, it could be very advantageous for you to work that deal! Here are a few reasons why working a property with very long Days on Market (DOM) could be favorable:

1. Less competition - if unseasoned investors are looking at these types of homes and thinking, "This house has been on the market for over 100 days. There must be a reason no one is buying it," then that means that there is a smaller pool of potential buyers because the houses isn't an "obvious" deal. You won't be competing with the entire market for this house because the investor with a lack of experience may not have the patience to see something like this through. Maybe there's nothing wrong with the house. Maybe it's simply listed too high and the seller is unwilling to budge (for now).

2. Less competition and attention on the listing gives you an opportunity to build rapport with the seller and the seller's agent. Call them 2x per week minimum and tell them you want the house very badly, but you cannot take it unless you get it at x price. After a few weeks of this, or longer, you've spoken with the seller quite a few times. IF and WHEN they finally decide to lower the price, who do you think their first call will be? YOU. Because they know you, like you, and hopefully trust you.

3. Time is your friend. Honestly, if you're looking to purchase investment opportunities on the MLS, and you're getting them on day 1-5 and they're good deals, or you win a highest and best situation, you likely overpaid for the house due to competition. Look at the deals in areas where there's value, but the house hasn't sold yet. These sellers are getting antsy. I'm telling you, this will help!

It takes some time to gain the patience for the investment game, but you'll learn soon enough! Please feel free to contact me with any other questions you have. I'd be happy to help!

Best,

Van

Investors, 

This is a great little 2-story property on Wabash in the West Chesterfield/Chatham area of South Side Chicago. The house is 2-stories, with an unfinished basement. Basement has ceiling heights of roughly 7-8 feet (approx.) so building the basement out with another bed or bath, if desired, shouldn't be problematic. All current beds and bath (3/1) are on the 2nd level. We have a rehab estimate of $80,000 to fix the place up. We did budget to add a full bath on the main floor to make it a 3/2 at the very least. There is a 2-car garage behind the property that is accessible through the alley in the rear.

Comps are showing values of $159,900 or higher.

This is a great price in an area where investors are doing quite a bit of work. Plenty of comps to use. 

Let me know if you have any questions!

Thanks,

Van

713.301.7630

@Sharron Anderson

Welcome to BP! 

Definitely take the time to read the beginner's guide that @Brie Schmidt recommended above. It is extremely thorough, but it will get you started. 

Here are a few bullet points from my personal experience to get you started:

1. As a wholesaler, buying and selling investment real estate at its core really comes down to 2 things. You need to become an expert at locating deals (#1), and you need to become an expert at locating buyers to purchase those deals (#2). Simple enough. Strategies for each?

2. Locating deals - again, most of this is covered in the beginner's guide, but this is how I'm currently locating the bulk of mine. If you're licensed (it's much easier to locate deals if you're a licensed broker with MLS access), offer on as many MLS deals as possible. You should know that you will only buy a very small percentage of these deals, as you will not be able to get them at the price you need them at immediately. You'll need to offer on these homes, and then track these offers. I've bought several homes 6 months after my initial offer for staying in the agent's ear. While you're in the neighborhood, do as the guide says, and "drive for dollars." Take note of the especially ugly houses. Knock on those doors. Knock on its neighbors doors. Send letter. Talk to neighbors. Put stickers on houses. Throw bandit signs. Call every agent with a listing in that subdivision and see if they have any distressed listings coming up. There are many things you can do. Those happen to work for me.

3. Locating buyers - throwing bandit signs, Craigslist ads, and networking meetups have worked well for me in the past. Also be sure to talk to every person with a dumpster in front of their house when you're driving for dollars. 9/10 times these people are investors. Let them know that you're a wholesaler and would like to get them some deals for their consideration.

It might take you sometime to get started at this, but I can assure you, once you do and it takes off, it can be very rewarding. 

@Michael Svoboda

Hi Michael! Excited for you and your wife to get started! And congrats on joining BP! 

I just moved to Chicago from Texas. I'm now licensed in 3 states. Even though it's a pain in your side to get it done, obtaining your license is advantageous to anyone, especially investors. Believe me, once you have your RE license, it opens up the door in terms of opportunities you'll be coming across. Even though your schedule isn't as flexible as your wife's, I'd look into getting licensed myself if I were you. The more the merrier.

I took my online courses through Real Estate Express (https://www.realestateexpress.com/) - FYI, I have no affiliation with these guys, just had a good experience. You can go as slow or as quick as you'd like. And it's online. Once you complete the course, you'll need to take a proctured exam for the online course. Then you'll need to follow up with a 15-hour live webinar (I did mine at https://www.webex.com) - again, no affiliation. After that, you'll be asked to take a smaller proctured exam, and then you'll be ready for the final state exam! 

All in all, this stuff is not rocket science. It's a bit of a time commitment, but I was able to get it done with a full-time job as well.

Let me know if you need anymore recommendations! And good luck to you guys in the future! I'd be happy to help out any way I can.

Best,

Van

@Jermaine Applewhite,

Hey bud! You should be able to download a free copy of the standard Illinois promulgated contract that RE brokers use online (at least you could in TX). Then, you can also download an assignment contract somewhere as well. Both of those should be free.

You'll need to read through both to get a good feel for what needs to be completed. You'll definitely be able to change some language on the assignment if you'd like. The state promulgated contract, however, is not subject to change. If you have a friend that is an attorney, they might be able to walk you through the nuances of the form.

Hope that helps! 

Good luck,

Van

@Dana Alfirevic,

I'd recommend trying to wholesale a few deals and see how it works for you. There is a lot of upside:

1. First, it will get you a lot of exposure to the business with minimal to no risk. You're not necessarily putting a lot of money out to secure a deal, and if you can't resell to an investor, then you can cancel the contract - no harm, no foul. My point is, you don't a whole lot of money to get into the wholesale game. But it does take effort, patience and persistence.

2. The second advantage of wholesaling properties is the knowledge and experience that you will gain. When you're wholesaling properties to investors, you're doing all the work to locate a property yourself. This skill will come in handy later in life when you're ready to start buying investment properties for yourself. You'll learn how to find off-market deals, you'll learn about RE contracts and assignments, and you'll learn how to negotiate with sellers, among many more things. All valuable skills that you will use down the road.

3. It will build your network. By being in the wholesale business, you're not just exposing yourself to deals, you're exposing yourself to deal-makers. In the RE business, your contacts can literally be the difference in tens of thousands of dollars for you. By being active within the community, even as a wholesaler, you will be meeting people that can further your RE career down the road.

4. It is lucrative - there's a lot of money to be made if you know how to find great off-market deals. Every investor I meet says, "Man, the market is really competitive right now. It's tough to find a deal." That's where you're service comes in handy. If you can build a reputable wholesale business, finding the buyer will never be an issue. Your product will sell itself.

Ultimately, wholesaling could be a very good educational tool for you without risking any money, and gaining a fountain of knowledge and experience along the way. I would recommend it to any young aspiring RE investor with little money or experience.

Hope that helps! Let me know if you need more info!

-Van

Hi @Tyler Beers!

That's awesome! Chicago is a great city to purchase real estate in!

There are A LOT of investors seeking property in Chicago right now, so you will have a lot of competition. You may find it somewhat challenging when you're first starting off, but if you persist enough, you and your pals are sure to find some good deals out here. 

I have a couple tips for you that will help you get started in your pursuit of the right deal for you:

1. Start a letter campaign. Be sure to target absentee owners (properties that are not occupied by the owner), as in my experience, these are the letters that get the most response. Also make sure the property hasn't sold in that last 8 years or so, must have 3+ bedrooms, and never built after 1990. That criteria should get you off to a good start.

2. Call RE agents. Agents will have deals that no one else will know about. Let's face it, as soon as a house hits the MLS, you're pretty much toast. There are too many investors that will most likely be willing to pay more than you. And, if you get into a highest and best situation, the person who wins always most likely over paid for the house. Agents have pocket listings all the time. Find a couple good ones and hopefully you'll be able to get some decent leads every week.

3. Talk to everyone. I have a rule: I put 10 business cards in my pocket every morning and I don't go home until they're all gone. You need to drive the neighborhoods for leads. You need to speak with every neighbor (they always have the best info). You need to ask your barber for leads. Your waiter. The person next to you while you're pumping your gas at the gas station. Believe me, the more you get your name out there, the better your chances.

Same goes with online marketing and social media. Put yourself out there, and the deals will start flowing in. Simultaneously, you'll need to start looking for financing. I'm sure someone else will be able to steer you in the right direction, it's not my forte.

Hope this helps! Good luck to you guys! 

Thanks,

Van

Hi @Edit B.!

Couple things:

1. As in any market, there are areas in Chicagoland where taxes are low, appreciation is high, and cash-flow is STRONG. One of these areas in the Chicago area would be Dolton, IL, for instance. You can find $80k homes here that will rent between $1200-$1500 per/month! That's close to a 200% rent figure compared to the value. Taxes, I'd imagine, are low here. The truth is, there are a lot of areas on the south side that are worth investing in, but you really need to be educated on these areas before you dive into it. A couple blocks in several directions could take you into an area you may not want to be.

2. I want to suggest a slight argument to your comment above on Chicago not being a hot market. Of course, it may not be as, say, Denver, but inventory is extremely low in Chicago right now, and prices are going up. No need for a supply & demand lesson right now, but it's a sellers' market. If you're an investor, as long as you can find a deal, once you go on to sell, or lease, you should be in good shape depending on the quality of your work and pricing.

Hope this helps! Feel free to contact me for any reason!

Good luck.

Best,

Van

@Michael Cerni -

Here are a few I've heard of:

1. Iron Bridge

2. RMAC

3. Barnett Capital

4. Finance of America

All of these lenders are active HML's in Chicago, but a few of them might have refi options, or at the very least have preferred refi lenders that they can refer you to.

Hope this helps!

Thanks,

Van