Month: May 2023

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Agent Spotlight – Dan Nelson

Whether you’re a first-time home buyer or an experienced real estate investor, Dan Nelson is the broker you want in your corner. 

He’s got more than 20 years of experience in the Chicagoland market, getting his start when his wife decided to rehab and flip a house, building that into a profitable business. “It feels like we are living in a real-life HGTV show with all the chaos and definitely all the fun.”

Dan knows that buying and selling real estate is a smart way to build wealth — but it pays to do your due diligence and make decisions based on facts instead of emotions. 

As someone who’s managed countless projects, his unique insights are an abundant resource for anyone looking to learn more about house hacking, flipping property, earning rental income, and becoming a serious real estate investor.

With a background in product management, marketing, and learning and development, Dan is a perfect fit with Baird & Warner Lincoln Park and our individualized approach to growth and support.

He believes that one of the most rewarding aspects of a career in this industry is forging a strong relationship with each client, truly getting to know them, and helping them achieve their dreams. Dan especially enjoys working with budding real estate investors and offers insider tips and guidance on how to create a successful strategy for receiving rental income.

One of his clients was a young house painter who dreamed of buying a rental property and using that income to build his portfolio. Dan was able to pair him with the perfect piece of real estate and now he’s making plans to acquire his second one this year. 

Naturally gregarious, Dan’s open and easy communication style makes him an expert negotiator and a wise advisor. His favorite part of being in real estate is the opportunity to listen to and share his knowledge with a diverse audience. 

His keen eye for detail and savvy perception skills also help him triumph at the poker table. Dan’s mastery of the deck was the original source of funding for his family’s emerging rehab business, and he still keeps his hand in the game.

Amongst Chicago’s historic 77 neighborhoods, he feels most at home in Andersonville, a laid-back area on the city’s North Side which is known for its architecture, Scandinavian roots, and high concentration of local and independent businesses. 

Andersonville began as a small village of Swedish immigrants in the mid-19th century and still celebrates that flavor with its annual Midsommarfest in June and the St. Lucia Festival of Lights every December. It’s also one of Chicago’s most welcoming communities and features plenty of opportunities for shopping and dining. 

Dan and his family love popping into the Taste of Lebanon on West Foster for healthy and affordable dishes like chicken shwarma, falafel, hummus, and baba ghanoush. For a thrilling night out, they adore the Chicago Magic Lounge, featuring a 107-seat cabaret theater, a speakeasy performance bar, and one of the country’s best libraries of magic literature and memorabilia. 

He loves to explore the city’s scenic Lakefront Trail bike path, which connects lush green spaces with dramatic urban views, beaches, and cultural institutions. It’s an easy and fun way to get to some of Chicago’s most iconic hangout spots like Del Campo’s Tacos, Caffè Oliva, and The Dock.

More and more consumers are looking for ways to generate additional income in nontraditional ways, and Dan has a gift for helping others choose the right property with the maximum amount of earning potential. This could be the ideal time to purchase a multi-family residence or a home with an accessory dwelling unit as a way to jumpstart your real estate portfolio.

Find out more about Dan’s love of transforming homes and inspiring his clients on his website, check out his Instagram, or reach out to him directly at dan.nelson@bairdwarner.com.

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How to Help Your Clients Become Real Estate Investors

Historically, investing in real estate has been one of the most effective ways to find financial freedom, especially in the Chicagoland area. It’s a smart way for people to build generational wealth and diversify their portfolios. 

It’s a unique asset class that has lower volatility than stocks and offers a safe way to hedge against inflation or uncertain times. Responsible real estate development can revitalize and strengthen communities by boosting property values and tax revenue, leading to better public services and success for locally-owned businesses.

Most brokers join this industry because they are driven to help match their clients with the perfect home for their family or find the ideal location for an innovative commercial enterprise. 

You also have the power to guide your clients toward making advantageous financial decisions. Here are some smart strategies for encouraging your buyers to become real estate investors and boosting your real estate brand to the stratosphere.

Become a Subject Matter Expert

In the business world, an SME (subject matter expert) is a highly qualified professional who has advanced knowledge in a specific field. 

Finding your niche is key to establishing your reputation as a trusted advisor. Whether you specialize in a certain area, historic buildings, or multi-family dwellings, doing your research and staying in front of current market trends is vital.

Chicago’s 77 community areas each have a distinct flavor and possible opportunities for residential or commercial investments. In-depth market analysis utilizing the latest AI-powered technology will give you the data you need to steer your clients to the most potentially profitable properties. 

You should also be aware of upcoming development projects, zoning ordinance changes, economic policies, and how to evaluate deals and estimate cash flow. 

The National Association of REALTORS® provides a certification program in real estate investing that takes a deep dive into 1031 exchanges, NOI (net operating income) modeling, and practical insight into professional property management.

By developing your expertise, you’ll inspire homebuyers to expand their horizons and explore the possibilities of building wealth through this type of investment.

Educating Your Clients

The next step is to sit down with your clients and truly understand their goals and financial situation. Many potential homebuyers are unaware of the options available to them or the safety and tax benefits of purchasing property as an investment.

Commonly called “house hacking,” many motivated investors start out by earning income through renting out part of their property (such as accessory dwelling units like basement apartments or separate mother-in-law suites) or by living onsite in a residential building and acquiring tenants for the other units.

This rental income can reduce or eliminate housing costs while building equity and allowing your client to save money for additional investment properties. 

You should advise your buyers to work with a lender who will work with them to find financing options specifically available for investment properties and owner-occupied multi-units. The qualifications for multifamily property mortgages are different than those for single-family homes but definitely still achievable.

For example, the Federal Housing Authority (FHA) guarantees mortgages with lower down payment requirements that are specifically designed for those with lower income or credit scores. Buyers can use this program to purchase a property with up to 4 units, as long as one will be their permanent, full-time home. 

Properties with 5 units or more are considered commercial real estate. If your clients are considering taking this route, they’ll need to have good credit and be prepared to make a larger down payment. Commercial mortgage loans also may have shorter terms than conventional residential mortgages — typically 5 to 20 years. 

These kinds of properties are also usually listed at a higher price point than residential ones, but they also generate more revenue, which makes it easier to grow your portfolio. There are many different types of commercial real estate, but these are traditionally the most profitable:

  • Apartments
  • Flex space (multi-use light industrial)
  • Self-storage
  • RV/ motor home parks
  • Strip malls with a balanced tenant mix
  • Student housing

Being a landlord isn’t for everyone, however. Be sure to talk to your clients about their lifestyles and expectations. Some people are ready to be fully hands-on, and some would prefer to let someone else handle the day-to-day oversight and dealing with repairs and maintenance. But property management companies can take a huge bite out of investment property income, so it’s crucial for your client to factor those expenses into their plan. 

Best Practices

Effective negotiation tactics are especially critical when it comes to sealing the deal on investment real estate. Honing your skills and specializing in this kind of transaction will give you valuable expertise and nurture your business. 

It’s vital to offer ongoing support to your clients throughout the process. Providing regular updates on market trends, answering questions, and offering guidance will make your clients feel more confident in their investment decisions and their plan for the future.

Be transparent and upfront with your buyers about the risks and rewards of investing in real estate. This is critical for building trust and establishing yourself as a trusted and reliable partner. 

At Baird & Warner Lincoln Park, we give our brokers every possible advantage to ensure they exceed client expectations. We leverage the latest property management and CRM technology to build a highly unique platform for our top-performing team. 

Discover more about finding success in an exciting and prosperous industry at the largest independent brokerage in the country — reach out today!