Illinois is a prime location for flipping houses. In Q3 2024, the average gross profit on an Illinois flip was $94,500, resulting in an average gross ROI of 60.8%. However, flipping houses takes a lot of work and you need the right partners to ensure success.
Your local ABL experts know the ins and outs of the Illinois market and can help you analyze deals before you pull the trigger. They can also advise you on the best funding options to get your renovation project off the ground.
Here are our top tips for executing a profitable flip in the Prairie State:
1. Target Markets with the Highest Profit Potential
Some Illinois markets have more flipping potential than others, so it’s important to carefully assess and compare your options before investing. Look for markets with high housing demand, low home inventory, and distressed properties with renovation potential.
You can obtain this information by investing in real estate data software, driving around looking for opportunities (aka driving for dollars), and consulting local experts like ABL loan experts.
According to a recent report, two of the top ten counties with the highest home flipping profits nationwide include Kendall County, IL ($348,500 gross profit in Q3 2024) and De Kalb County, IL ($348,500 gross profit in Q3 2024).
2. Get Pre-Approved for a Fix-and-Flip Loan
Most investors fund renovation projects with a Fix & Flip loan—usually because they can’t or don’t want to pay with cash. However, to get a loan, you must first be pre-approved, which involves sharing information about the proposed investment with a lender.
For example, ABL can pre-qualify you for a Fix & Flip loan within 24 hours. All we need is a few details about you and your project. Plus, your application is 100% confidential, has zero impact on your credit, and carries no obligation to work with us. You have nothing to lose!
3. Shop Foreclosure Properties
Illinois is one of 21 states (and the District of Columbia) that require judicial foreclosures, which means lenders must go through the court system to foreclose on a home. This can lengthen the foreclosure process, giving investors more opportunities to identify homes to purchase at public auctions at a discount. Sometimes you can buy homes for pennies on the dollar since many lenders just want to recoup their losses quickly (and don’t have the patience to get top dollar).
What’s more, Illinois had the fifth-most foreclosure activity nationwide in December 2024. According to a recent report, the state processed 1,446 foreclosure filings, representing a 7.19% jump from November 2024 and a foreclosure rate of 1 in every 3,753 housing units.
4. Keep a Careful Budget
Your return on a flip is directly tied to your project costs. The lower the costs, the higher your returns. As a result, it’s important to set a realistic budget upfront for the property purchase and renovation (labor, material, and supplies).
If you notice the project taking longer than expected (raising labor costs) or material prices increasing, try to offset this by saving on other line items. For example, you may be able to get bulk discounts from suppliers or return unused materials for a refund or credit. You can also cover unexpected expenses with a contingency budget based on past project performances.
Ultimately, the goal is to hit or exceed your return target despite any surprises.
5. Check Building Codes and Get Necessary Permits
Depending on the scope of your planned renovations, you may need to get a building permit. Check local building codes. A good place to start is Illinois’s Capital Development Board website, which summarizes major construction codes for residential (and commercial) projects.
6. Partner with Local Experts
Home flipping involves many moving parts managed over a short period. That’s why it’s crucial to build a strong network of real estate professionals you can rely on. Your team can include real estate agents, attorneys, contractors, title professionals, insurance providers, other investors, and private lenders like ABL.
Our Illinois team is here to support you through the entire project. Unlike other lenders who disappear after closing, we’re here for you from the initial planning phase to the eventual resale.
7. Identify and Manage Risks
As with any investment, flipping has its risks. For example, home values could dip, resulting in a lower resale price than expected. Alternatively, you might underestimate holding costs (like property taxes and utilities), making it harder to hit your ROI goals.
However, you can minimize potential risks by doing your due diligence, setting realistic budgets, and consulting local professionals. For example, ABL’s Illinois team has worked on flips similar to yours and can advise you on market trends, when to sell, and the best strategies for success.
8. Invest in Effective Marketing
No matter how well you transform a distressed property, you need to market it effectively to win the best resale price. Start by posting a “for sale” sign and focusing on the property’s curb appeal. From there, you can advertise it in local classifieds and online marketplaces like Zillow. Many services even let you automatically syndicate listings across the top real estate sites.
The goal is to get the word out to the greatest number of potential buyers to raise demand, increase your asking price, and ultimately maximize your profit.
9. Learn and Adapt as You Go
Real estate investing is a long game. While your first flip may not be a home run, you can always improve by learning from your mistakes. Better yet, you can learn from other real estate professionals who have experience flipping homes in Illinois.
Our local experts deeply understand the Illinois market and can help guide you in the right direction. We also offer Fix & Flip loans tailored to your project. Pre-qualify for one today to get the ball rolling. We’ll get back to you within 24 hours to let you know if we’re a good match.