The Titanium Vault hosted by RJ Bates III

Why Illinois is a TOP Wholesaling Market

• RJ Bates III • Episode 533

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If you’re new to my channel my name is RJ Bates III. Myself and my partner Cassi DeHaas are the founders of Titanium Investments.

We are nationwide virtual wholesalers and on this channel we share EVERYTHING that we do inside our business. So if you’re looking to close more deals - at higher assignments - anywhere in the country… You’re in the right place.

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Over 10 years in the real estate investing business
Closed deals in all 50 states
​Owned rentals in 12 states
​Flipped houses in 11 states
​Closed on over 2,000 properties
​125 contracts in 50 days (all live on YouTube)
​Back to back Closers Olympics Champion
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Speaker 1:

Welcome back to Wholesaling Around the World the Illinois edition. Now listen, illinois is the typical Midwest wholesale state and I love wholesaling in the Midwest and I also love wholesaling in the state of Illinois wholesaling in the Midwest, and I also love wholesaling in the state of Illinois. Now, illinois has the population of 12.7 million people according to the census in 2024, making it the sixth most populated state in the United States of America. But for us here at Titanium Investments, it's not the sixth most volume of wholesale deals that we've done. It does crack the top 10, though, coming in as the ninth most highest volume state where we've done deals. Now, we've done deals all across Illinois, and Illinois is obviously most famous for one of the most populated cities in all of America, chicago. Now, we've done deals in Chicago and all the surrounding suburbs, but we've done deals all across the state, all the way down south, just across the state line, from St Louis and all the way from Peoria, champaign up to Rockford. Anywhere and everywhere, we've done deals, and I enjoy Illinois. It's one of my favorite markets. Anywhere and everywhere, we've done deals and I enjoy Illinois. It's one of my favorite markets.

Speaker 1:

Now, the thing that you have to pay attention to when it comes to underwriting deals in Illinois, not as much in Chicago. In certain spots in Chicago you have to pay attention to, but the rest of the state is the as-is comps. This is very similar going back to our rundown of Alabama and Michigan similar going back to our rundown of Alabama and Michigan. Illinois is very similar in that you have to pay attention to the competition that you're going to be going up against when you go to dispo deals. So what I mean by that is is Illinois is not a simple state when it comes to comping and underwriting. You can't just solely focus on the after repair value, subtracting your repairs, subtracting your assignment fee, and then that comes up to a maximum allowable offer. You also have to pay attention to what properties are going for in the same condition, and so one of the things that we like to do there is look at the as-is comps and what is currently listed on the market in the same condition. That's going to be vitally important, 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 great deal in regards to your wholesale calculation. So that's one of the things that you have to pay attention to in Illinois.

Speaker 1:

The other thing that makes Illinois a great state to wholesale in is the fact that there are quite a few landlords and the properties, the price points in almost all of the state do cashflow. So you don't run into the same issues that you run into like a California or a Utah or an Oregon, where the price points are so high. There's no cash flow. And you hear them. You hear the buyers there talk about appreciation being so important as landlords. Well, of course, it's because of the price point and there is no cash flow. Now in Illinois it's. You're not going to get that much appreciation, but you can get great cash flow. Now one of the things you need to pay attention to is how much is the property renting for and then how much are those landlords pay for those properties, because Illinois will be a location where you have to get 2% rentals and even 3% rentals in certain cities and even 3% rentals in certain cities. So pay attention to what the rent rates are and what those landlords are purchasing those properties.

Speaker 1:

Now, one of the other things that makes Illinois a rather unique state is that it's both a title and an attorney state, meaning that you can use a title company or you can just use an attorney. It's very rare that you can use both. Now we've done both and I will say that there's not a winner or a loser here. I'm normally pretty hard on attorneys, specifically attorney states, but we do use an attorney 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 be somewhat deal killers, illinois seems pretty straightforward and you don't run into too many issues when it comes to the closing process.

Speaker 1:

Now, as much as I've sang Illinois's praises so far through this video, it is one of the states out there that does have a wholesaling regulation and it is important that you pay attention to this regulation Now, before I go in, my good friend from Canada, claude, likes to say I am an American and I do have to disclose that this is not legal advice. Please don't sue me. This is a YouTube video and I'm just trying to give you as much information as I possibly know, but it's not legal advice. All right, Illinois does have a wholesaling regulation and it's known as the Illinois Real Estate License Act of 2019. So it's not a new regulation by any means. It's been around for a while, but the law requires individuals engaging in wholesaling activities more than once within a 12-month period to obtain a real estate broker's license.

Speaker 1:

Wholesalers must also adhere to specific rules and disclosures, including disclosing their position as a contract buyer and not acting as a dual agent. So, essentially, if you're gonna go into Illinois and you can assign one deal for every 12 months without being licensed, if you are going to do more business inside the state of Illinois, then best practice is to become a licensed real estate agent in the state of Illinois. If you are not going to be able to become licensed in the state of Illinois but you plan on wholesaling, one of the things that you can do is do business with a licensed real estate agent or licensed broker inside of the state of Illinois, and that is one of the ways that you can get around this. Now there's other loopholes in this. What I'm going to say is this is not a deal killer. If you really want to do more business in the state of Illinois, you can reach out to people that are doing business in the state of Illinois. They can talk to you about the ways that you can get around it. We have been able to work with several people in the state of Illinois and this has not hindered us from being able to do business. However, it is something that you need to be aware of. You don't want to be committing a crime. You don't want to be doing something illegal that you weren't aware of.

Speaker 1:

So I just wanted to shine light on the fact that there is the real Illinois Real Estate License Act 2019. And essentially, it says, if you're going to do more than one wholesale transaction in a 12 month period, you need to become licensed or you need to be doing business with someone that is licensed. So Illinois overall a great place for wholesalers because, just like almost every other state in the Midwest, it's that price point and, yes, there are people there that are motivated to sell their houses for a discount. There are plenty of end buyers. Why? Because the buyer pool is larger, because not only do you have your flippers, but you also have your landlords. You have people that do creative seller finance, land contracts, lease options those are all in buyers for you, and there's a ton of action throughout the state. Even in some of the more rural locations, we have been able to vastly succeed on moving those deals because of the buyer action. Right, there's people that will buy deals in locations like Peoria and Rockford, outside of Chicago, because they cannot get the same types of deals that they can get in Chicago and some of those more quote-unquote rural cities throughout the state.

Speaker 1:

So don't write off Illinois because of a regulation. Figure out the ways that you can work within the regulation that exists and utilize the ability that you have with the leads that exist nowadays in PPL. If you go on to Speedleads marketplace right now and you were to search Illinois, there are going to be a significant amount of leads in comparison to some of the other states out there. One because it's the sixth most populated state in the union, right Three. Two, because, hey, there are a ton of motivated sellers in this location at price point. People are struggling, they're motivated to sell. This is where we come in, we solve those sellers' problems and that exists inside of Illinois. And then, last and most importantly, there are buyers throughout, which means Illinois is a wholesaling hotspot.

Speaker 1:

It's one of my favorite locations and, like I said, it ranks ninth overall inside of titanium investments volume of deals that we've done. Overall, I give Illinois a four star out of five star ranking. I believe it's five stars on acquisitions, it's four stars on dispositions and four stars overall, but I'd probably increase that up to closer to like four and a half stars. I really had to be honest because it has been such a great location for us. So if you're thinking about expanding to a new market, don't sleep on the Prairie State baby. It could be a honey hole for you. For those of you that have done deals in Illinois, let me know if there's something that I missed or something I don't know about, and what are your thoughts about wholesaling in Illinois. Show me some love. Give me a like on the video. We'll see you guys tomorrow.