Being a Developer
Rarely a week goes by without someone asking me about developing their own project--be it a new construction condo project, building a single family home as a vanity residence or buying an old apartment building to convert. What most people don't realize is there are scores of licensed Realtors in the Chicagoland area looking to do the same thing for themselves, not to mention all the Attorneys and Bankers with access to even more privileged information on distressed or unlisted properties from tax and estate scenarios. And most Realtors skilled in this area already have a strong portfolio of experienced Builders ready to pay cash and close in 30 days for the right property. I always have a buyer for the right piece of Land.
It used to be that a novice investor could take a position on a property and "flip" it to another buyer before or at Closing with little risk or downside. Banking is so regulated now (as far as RESPA is concerned) and the margin is so tight on new construction that this once common occurance is now becoming a rarity. As of this writing, condo inventory is high in Chicago. I.E...there's a lot on the market to choose from. The rapid appreciation of previous years has turned to a more gradual steady growth.
Land, on the other hand continues to briskly appreciate but the zoning and permit process in the city is such, that only the most expert and experienced of investors should proceed and with caution. What's right for tearing down and developing on one block might be a totally bad move just across the street. The following are just a few things that the would be developer has to know and possess: F.A.R, Zoning Laws and Regulations, Setback Requirements, Height Restrictions, Exception and Variance Restrictions, Neighborhood Covenants, the Alderman's Desires, the Permit Process, Reliable Architect Counsel, Expert Legal Counsel, A Strong Trade Resource, Cash, and the ability to close in 30 days! That's just for starters.
The world of Real Estate is an exciting and vibrant one--especially in Chicago. Just remember that due diligence is in order, consult professionals before proceeding and when its time to make an offer, "Cash" is King.
Geno Petro
Chicago Home Estates
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