Why Illinois is a TOP Wholesaling Market

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Episode Transcript

Speaker 1 (00:08):
Welcome back to Wholesaling Around the World the
Illinois edition.
Now listen, illinois is thetypical Midwest wholesale state
and I love wholesaling in theMidwest and I also love
wholesaling in the state ofIllinois wholesaling in the
Midwest, and I also lovewholesaling in the state of
Illinois.
Now, illinois has thepopulation of 12.7 million

(00:30):
people according to the censusin 2024, making it the sixth
most populated state in theUnited States of America.
But for us here at TitaniumInvestments, it's not the sixth
most volume of wholesale dealsthat we've done.
It does crack the top 10,though, coming in as the ninth
most highest volume state wherewe've done deals.

(00:53):
Now, we've done deals allacross Illinois, and Illinois is
obviously most famous for oneof the most populated cities in
all of America, chicago.
Now, we've done deals inChicago and all the surrounding
suburbs, but we've done dealsall across the state, all the
way down south, just across thestate line, from St Louis and

(01:15):
all the way from Peoria,champaign up to Rockford.
Anywhere and everywhere, we'vedone deals, and I enjoy Illinois
.
It's one of my favorite markets.
Anywhere and everywhere, we'vedone deals and I enjoy Illinois.
It's one of my favorite markets.
Now, the thing that you have topay attention to when it comes
to underwriting deals inIllinois, not as much in Chicago
.
In certain spots in Chicago youhave to pay attention to, but

(01:39):
the rest of the state is theas-is comps.
This is very similar going backto our rundown of Alabama and
Michigan similar going back toour rundown of Alabama and
Michigan.
Illinois is very similar inthat you have to pay attention
to the competition that you'regoing to be going up against
when you go to dispo deals.
So what I mean by that is isIllinois is not a simple state
when it comes to comping andunderwriting.
You can't just solely focus onthe after repair value,

(02:03):
subtracting your repairs,subtracting your assignment fee,
and then that comes up to amaximum allowable offer.
You also have to pay attentionto what properties are going for
in the same condition, and soone of the things that we like
to do there is look at the as-iscomps and what is currently
listed on the market in the samecondition.

(02:24):
That's going to be vitallyimportant, because if someone
can go pick up a property for$25,000 on the market, they're
not going to pay you $30,000 or$35,000 for the same type of
property, even if it's a greatdeal in regards to your
wholesale calculation.
So that's one of the thingsthat you have to pay attention
to in Illinois.

(02:46):
The other thing that makesIllinois a great state to
wholesale in is the fact thatthere are quite a few landlords
and the properties, the pricepoints in almost all of the
state do cashflow.
So you don't run into the sameissues that you run into like a
California or a Utah or anOregon, where the price points

(03:08):
are so high.
There's no cash flow.
And you hear them.
You hear the buyers there talkabout appreciation being so
important as landlords.
Well, of course, it's becauseof the price point and there is
no cash flow.
Now in Illinois it's.
You're not going to get thatmuch appreciation, but you can
get great cash flow.
Now one of the things you needto pay attention to is how much

(03:32):
is the property renting for andthen how much are those
landlords pay for thoseproperties, because Illinois
will be a location where youhave to get 2% rentals and even
3% rentals in certain cities andeven 3% rentals in certain
cities.
So pay attention to what therent rates are and what those
landlords are purchasing thoseproperties.

(03:52):
Now, one of the other thingsthat makes Illinois a rather
unique state is that it's both atitle and an attorney state,
meaning that you can use a titlecompany or you can just use an
attorney.
It's very rare that you can useboth.
Now we've done both and I willsay that there's not a winner or

(04:13):
a loser here.
I'm normally pretty hard onattorneys, specifically attorney
states, but we do use anattorney fairly regularly for
our Illinois deals and, honestly, we haven't had many issues
when it comes to that,especially in comparison to like
the New Jersey's or New York's,where the attorneys can almost

(04:36):
be somewhat deal killers,illinois seems pretty
straightforward and you don'trun into too many issues when it
comes to the closing process.
Now, as much as I've sangIllinois's praises so far
through this video, it is one ofthe states out there that does
have a wholesaling regulationand it is important that you pay

(04:58):
attention to this regulationNow, before I go in, my good
friend from Canada, claude,likes to say I am an American
and I do have to disclose thatthis is not legal advice.
Please don't sue me.
This is a YouTube video and I'mjust trying to give you as much
information as I possibly know,but it's not legal advice.

(05:19):
All right, Illinois does have awholesaling regulation and it's
known as the Illinois RealEstate License Act of 2019.
So it's not a new regulation byany means.
It's been around for a while,but the law requires individuals
engaging in wholesalingactivities more than once within

(05:41):
a 12-month period to obtain areal estate broker's license.
Wholesalers must also adhere tospecific rules and disclosures,
including disclosing theirposition as a contract buyer and
not acting as a dual agent.
So, essentially, if you'regonna go into Illinois and you

(06:04):
can assign one deal for every 12months without being licensed,
if you are going to do morebusiness inside the state of
Illinois, then best practice isto become a licensed real estate
agent in the state of Illinois.
If you are not going to be ableto become licensed in the state
of Illinois but you plan onwholesaling, one of the things

(06:26):
that you can do is do businesswith a licensed real estate
agent or licensed broker insideof the state of Illinois, and
that is one of the ways that youcan get around this.
Now there's other loopholes inthis.
What I'm going to say is thisis not a deal killer.
If you really want to do morebusiness in the state of
Illinois, you can reach out topeople that are doing business

(06:48):
in the state of Illinois.
They can talk to you about theways that you can get around it.
We have been able to work withseveral people in the state of
Illinois and this has nothindered us from being able to
do business.
However, it is something thatyou need to be aware of.
You don't want to be committinga crime.
You don't want to be doingsomething illegal that you
weren't aware of.

(07:09):
So I just wanted to shine lighton the fact that there is the
real Illinois Real EstateLicense Act 2019.
And essentially, it says, ifyou're going to do more than one
wholesale transaction in a 12month period, you need to become
licensed or you need to bedoing business with someone that
is licensed.
So Illinois overall a greatplace for wholesalers because,

(07:32):
just like almost every otherstate in the Midwest, it's that
price point and, yes, there arepeople there that are motivated
to sell their houses for adiscount.
There are plenty of end buyers.
Why?
Because the buyer pool islarger, because not only do you
have your flippers, but you alsohave your landlords.
You have people that docreative seller finance, land

(07:55):
contracts, lease options thoseare all in buyers for you, and
there's a ton of actionthroughout the state.
Even in some of the more rurallocations, we have been able to
vastly succeed on moving thosedeals because of the buyer
action.
Right, there's people that willbuy deals in locations like

(08:18):
Peoria and Rockford, outside ofChicago, because they cannot get
the same types of deals thatthey can get in Chicago and some
of those more quote-unquoterural cities throughout the
state.
So don't write off Illinoisbecause of a regulation.
Figure out the ways that youcan work within the regulation

(08:40):
that exists and utilize theability that you have with the
leads that exist nowadays in PPL.
If you go on to Speedleadsmarketplace right now and you
were to search Illinois, thereare going to be a significant
amount of leads in comparison tosome of the other states out
there.
One because it's the sixth mostpopulated state in the union,

(09:04):
right Three.
Two, because, hey, there are aton of motivated sellers in this
location at price point.
People are struggling, they'remotivated to sell.
This is where we come in, wesolve those sellers' problems
and that exists inside ofIllinois.
And then, last and mostimportantly, there are buyers
throughout, which means Illinoisis a wholesaling hotspot.

(09:29):
It's one of my favoritelocations and, like I said, it
ranks ninth overall inside oftitanium investments volume of
deals that we've done.
Overall, I give Illinois a fourstar out of five star ranking.
I believe it's five stars onacquisitions, it's four stars on
dispositions and four starsoverall, but I'd probably

(09:51):
increase that up to closer tolike four and a half stars.
I really had to be honestbecause it has been such a great
location for us.
So if you're thinking aboutexpanding to a new market, don't
sleep on the Prairie State baby.
It could be a honey hole foryou.
For those of you that have donedeals in Illinois, let me know
if there's something that Imissed or something I don't know

(10:12):
about, and what are yourthoughts about wholesaling in
Illinois.
Show me some love.
Give me a like on the video.
We'll see you guys tomorrow.