Flipping houses in Chicago can be a very intriguing investment opportunity. Over the last several years, real estate investors have been flipping houses in Chicago at an increasing rate. In 2016, for example, flips accounted for 7.5 percent of homes sold in Chicago--a substantial increase from 4.7 percent in 2015. In this article, we will take a closer look at the Chicago housing and flipping market to see why. We will also look at Fund That Flip's experience in the city and its surrounding areas. Lastly, we will offer some advice on how beginners can get started and/or elevate their flipping strategy in this major city in the state of Illinois.
Why Flip Houses in Chicago?
The large increase in Chicago house flips are due primarily to buyer demand as the regional economy recovers, according to Trulia chief economist Ralph McLaughlin. He explained that, when investors see buyers are ready to purchase, flipping increases.
Other factors in Chicago's economy have contributed to this demand. Wage growth was above the national average in 2016 with healthy employment growth in various areas such as the professional services, transportation, and hospitality.
Supply is also a major factor. Buyers who are not inclined to rehab themselves have opened up the opportunity for flippers. The flips are much more than just past foreclosures. An increasing number of condos are being sold by people who have lived in them for a quarter century or more but who don't want to complete the rehab process themselves. A slowing in downtown condo construction has also sparked demand for rehab condos, especially among individuals who don't have the time to wait for entire buildings to be renovated.
The Real Estate Numbers
Chicago's home median sales price increased $5,250 over the past year to $280,000, according to Trulia. The average price per square foot for the same period rose from $217 to $230. Across Chicago, the average gross profit for flips was $81,162.
Wilmette and Avondale were the two most profitable zip codes for house flipping. In 2016, Wilmette saw an average profit of $232,000 while Avondale saw gross profits average at $211,000. The three next most profitable zip codes were the Sauganash neighborhood, Forest Park, and Wheaton. In terms of number of flips, the top three towns were Bolingbrook, West Lawn on Southwest Side, and Romeoville.
Fund That Flip in Chicago, IL
Fund That Flip is no stranger to doing business with borrowers in Chicago. One home flipping project that we are particularly proud of is one that was recently completed on the West Side of Chicago in Oak Park. These real estate investors are a husband and wife team. He is in the top producer category of Chicago realtors from 2015 while she is an interior designer and contractor with a crew of two master carpenters and workers. With eight years of construction and design experience in the Chicago area, she has completed over $40,000,000 in projects.
The strategy for this fixer upper was to make modern updates to bring the home back to marketable conditions. The exterior renovation included new paint, landscaping, and decorative woodwork on the front facade. In the interior, the redevelopers opened the layout on the first floor and added an en-suite master bath and closet on the second floor. Additionally, they installed new fixtures throughout the home, replaced outdated paneling and ceiling tiles, and added a new HVAC system, a/v wiring, and kitchen cabinets. Check out the slideshow below for a more detailed look at the before and after shots of this renovated beauty.
Chicago House Flipping Workshops
Considering the attractiveness of its market, Chicago is also home to a number of great real estate workshops, many of which are catered towards real estate investors and more specifically, house flippers. Some of these are novice level classes and/or sessions like Real Estate Investing for Beginners- Chicago Northwest Side and Invest in Real Estate!! Take Control of Your Financial Future! while others are more detailed classes and/or sessions such as Real Estate Workshop - Learn Cash Flow Properties, Wholesale, Fix & Flip and Creative Acquisitions Strategies. Head to Eventbrite to navigate some of the upcoming workshops in the Chicago area and take advantage of these exciting opportunities.
Another great event to keep on your radar is the annual Midwest Real Estate Networking Summit. The event "delivers unique content and actionable steps for attendees to prosper through their real estate investments." Andrew Holmes, who has previously partnered with Fund That Flip, hosts the event. Holmes has completed around 850 fix-and-flip or wholesale deals in the Chicago area and also owns over 180 rental properties. Whatever your level in real estate investing, attending one of these workshops may be a great opportunity to not only learn some tips and tricks for your business, but also to network with like-minded professionals and potential future business partners.
Are You Ready to Start Flipping Homes in Chicago?
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Looking for an alternative to stocks? Real estate investing can earn 8-10% annual returns on pre-vetted, low LTV, real estate-secured loans. Fund That Flip offers industry-leading visibility into each project, enabling investors to be highly selective in the loans they choose to fund. We have other opportunities for seasoned investors to help experienced developers like this transform local communities. Check out our open investment opportunities and start building an online real estate investment portfolio.
