Finding Off-Market Real Estate Deals in Chicago’s Emerging Neighborhoods

DeMarcus Hunter (00:00)
So I’m normally shopping for about three to four different buckets. So there’s the me bucket. Like, okay, I know that I have someone that’s waiting for this type of inventory. And if I like pass it through my churn and then put it out, I know that I have at least one, if not two ⁓ ready, willing and able buyers, you know, for this asset. ⁓ There are a number of developers that are larger than me that that always need to be fed.

Dylan Silver (02:01)
Hey folks, welcome back to the show. Today’s guest, DeMarcus Hunter is a real estate professional and investor based in Chicago, bringing over 20 years of experience from Fortune 500 companies into the real estate space. He made a deliberate shift into real estate to bring transparency, strategy, and a relationship first approach to a market he felt needed it. He works across residential, commercial, and off-market opportunities throughout Chicago and Chicagoland.

leveraging deep neighborhood expertise and an analytical background to help clients make informed decisions. He’s also actively involved in community initiatives, serving as a board member of Black Chicago Eats and contributing to local development efforts with a focus on long-term impact beyond just transactions. DeMarcus, thanks for taking the time today.

DeMarcus Hunter (02:48)
Thank you for having me on the show.

Dylan Silver (02:51)
Now, after so much time working with Fortune 500 companies, what made you step into real estate or maybe what did you see as missing in the industry?

DeMarcus Hunter (03:03)
So from my standpoint, I saw a lack of altruism and integrity. I looked back at some of the experiences that I had buying homes. And from my standpoint, and it did start as a joke, I was like, surely somebody can do this better. So with that being said, I, I studied for the test for two weeks, stayed at home, instead of going out for vacation, took the test and then

After I got the passing grade, walking home saying, what do I do with this? ⁓ So now fast forward, what, five or six years? Six years. ⁓ Now I’m running my own real estate team at Compass.

Dylan Silver (03:45)
You know,

you’re not the only one to have that perspective. I’ve actually spoken with so many people in the ⁓ realtor side and then also in the lending side as loan originators who said, you know, we just had this experience that was less than stellar, but we thought, you know, surely I can do a better job than this. And that’s what oftentimes is the impetus to get people to start.

DeMarcus Hunter (04:10)
Yeah, and yes, it’s basically you have some you have some unresolved questions yourself. And as you’re seeking knowledge, you’re like, okay, an easy path to getting those answers or to getting those questions answered is to just go through the same curriculum that that realtors take. So ⁓ and then also during the during the pandemic, there was a lot of ⁓

a lot more shift to like, you know, ⁓ owning one’s brand, like basically putting a step out there for yourself. You know, if you, if things ended tomorrow, have you made your legacy on, on the world that you, in the way that you wanted it to be set? So.

Dylan Silver (04:56)
I mean, it’s huge. And one of the things that’s, I’d say relatively unique about your ⁓ business and your approach is you’re active in several segments, right? ⁓ Off market, residential, and commercial. Did you start that way or were you starting in one segment?

DeMarcus Hunter (06:02)
Like many agents, started where I experienced the problem, which was in residential. So that would be your single family homes, condos, co-ops, ⁓ multi units of less than four units, and then kind of expanded from there. So in real estate, it’s kind of like pulling a thread. So you don’t know if it’s going to weave left or weave right. sometimes you just have to follow it and see where it goes. And I’ve been really happy with the results.

Dylan Silver (06:33)
You know, the residential space, and you mentioned a lot of people starting in the residential space, I cut my teeth in off-market residential, dealing with distressed sellers, right? And so oftentimes, when I’m talking with folks like yourself, I’m curious how you got involved in the off-market space, because it’s a totally different ball game, right, than working the traditional residential side.

DeMarcus Hunter (06:59)
Yes, so the way that you advertise, the velocity of the sale, the understanding, the motivation. Many times when you come into a distressed property, you clearly see the motivation right away or it’s that motivation that basically knocked you over the head and said, hey, why don’t you call this guy and get things in motion. So much in Chicago. Chicago’s an old city.

So like, you know, maybe not as old as New York, but like definitely older than, you know, lot of the cities in the South, ⁓ Los Angeles, et cetera, et cetera. So, you you have all of this inventory, these big, beautiful homes that are just like sitting vacant and like, or are not vacant. And the person that has it is basically on their last, you know, on their last leg. And they need to basically.

move this asset over to someone who can like re-beautify it and like put out some of good inventory that people need to live in.

Dylan Silver (08:06)
When you’re looking at off-market deals, what’s your approach to sourcing them and then also to finding the right deals? Are you looking to work with wholesalers? Are you looking for distressed sellers, foreclosure, auction, that type of thing? What’s your strategy for acquisitions?

DeMarcus Hunter (08:29)
So I’m normally shopping for about three to four different buckets. So there’s the me bucket. Like, okay, I know that I have someone that’s waiting for this type of inventory. And if I like pass it through my churn and then put it out, I know that I have at least one, if not two ⁓ ready, willing and able buyers, you know, for this asset. ⁓ There are a number of developers that are larger than me that that always need to be fed.

So if know, if basically development is your primary hustle, like you have to constantly have properties in the pipeline because you probably also have a construction company and you need to keep those guys moving. And you know, because if you let them go, there’s no chance or there’s a strong likelihood that it’ll be hard to claw them back. So once you got a good crew, you don’t want to let them go. ⁓ And then larger. So if I run across an asset that’s

that’s maybe, let’s say maybe three or 4 million or more, then we’re looking more at corporations or REITs or things of that sort that can kind of gobble this up, press out the edges and then put it back on the market or move it to someone else that is looking to increase their portfolio.

Dylan Silver (09:52)
That’s a great perspective that I actually haven’t heard before, which is instead of thinking about the deal first, you’re really focused on the buyer first. And that makes all the sense in the world to me because there’s this saying, which is, know, if you get the deal on a contract, you’ll find the buyer or someone will help. I haven’t seen that always be true, especially in the market that we’ve been going through the last couple of years. And I think people do need to be more focused

wherever you are in the country on your buyer and your end buyer and think, well, what are they really wanting? What’s their buy a box? What will they absolutely not pass up?

DeMarcus Hunter (11:08)
So, ⁓ comfort, safety, like comfort and safety. So like, if you stick the utility of the home, like, okay, you repurpose this asset and like, you know that like for a modern ⁓ refurbished home in Chicago,

you need to have a toilet on all levels of the home. I mean, it’s a hands down standard. Nobody wants to go up or go down to do number one or number two. In terms of safety, basically give them, when they’re at home, this is probably the most expensive thing that they’re ever gonna buy in their life until they buy the next most expensive thing in their life, which is the next home.

With that being said, they wanna make sure that they feel safe and comfortable in the home. And so like providing all those comforts as much as possible to them so that like, you know.

Okay, a brain ⁓ malfunction. But anyway, so yes, reverse engineering. So Mr. Engineer is reverse engineering. So starting at the end point and then working my way backwards versus just like, okay, ⁓ the deal comes together. I can get a margin if I do it this way. Well, yes, yeah, I can have, what is it? Zero, what is it? 20%.

Dylan Silver (12:15)
That’s okay.

DeMarcus Hunter (12:41)
of zero is still zero, correct? So yeah, so like basic math, but if you start at the end and work your way backwards, then you know that you’ve created an end to end solution. So I started here, I ended here, and then like I went linearly backward to know like, this is what I need. How do I, you know, so this is what I can afford to acquire the asset at.

Dylan Silver (12:43)
That’s right.

want to actually get a little granular here, DeMarcus, because I think right now there’s this really intriguing intersection happening between engineering minds and real estate. And this has been going on for some time, but also these are separate worlds in some regard. Oftentimes engineers tend to be more numerical and people that are…

effective realtors tend to be able to have great networks and know a lot of people and have great rapport instantly with folks. And so what I’ve been seeing a lot recently is real estate agents, brokerages now using more tech than almost seemingly anybody else. And so from your perspective, what’s been some of the more powerful use cases of

DeMarcus Hunter (13:56)
⁓

Dylan Silver (13:59)
you know, these new emerging software as an AI that you’ve seen in the real estate space.

DeMarcus Hunter (14:04)
I think one of them is definitely in kind of getting the word out or prospecting. as a realtor, know, the goal, and I don’t do it every day, but is to spend at least two hours of my day prospecting. So like if it were a eight hour day, that means

One quarter or 25 % is spent researching what is to come. so, yeah. And so with that being said, if you can make more contacts or reach more people in that same given amount of time, then you’ve effectively increased your, you’ve effectively increased your profitability for that time spent. so.

Dylan Silver (15:36)
Yeah, 100%. And I’ll add to that, that I’ve seen people who’ve been using some of these AI tools to help them plan their prospecting. So, you know, let’s create a 90 or 120 day calendar to get our business to this point. This is what we got to do on day five and day six and day 30, right? And breaking it down like that.

without having to go through the decision fatigue yourself of planning out each day is super, super helpful to folks. Now it’s not gonna make calls for you. It’s not gonna go, you know, knock doors for you and network, but it will enable you to track your progress and to plot it out without exhausting yourself just on the plan. I do wanna pivot here though and ask you specifically about Chicago. We were talking in the green room, DeMarcus, about the city of Chicago and Aldermen’s and, you know, how it’s a unique

DeMarcus Hunter (16:06)
Mm-hmm.

Dylan Silver (16:32)
market when you’re looking at deals in Chicago specifically, are there any neighborhoods of Chicago that you’re particularly bullish on or that you just like looking at deals at?

DeMarcus Hunter (16:45)
Well, so definitely bullish on my own neighborhood of Edgewater. it’s basically a good, it’s always treaded water. So maybe that’s why we’re called Edgewater, because we’re right by the, where I was treading water. So never too high, never too low. Good mix of people, great restaurants, ⁓ good mix of housing inventory from like…

you know, some million dollar homes down to like a condo for, you know, maybe less than a hundred thousand. ⁓ But one neighborhood in particular that I’m very bullish on is Bronzeville. So ⁓ for those people that haven’t experienced Chicago, ⁓ but have experienced New York, think of, think of Brooklyn. So think of, you know, when Brooklyn became a little bit less biggie and a little bit more Blaine from Park Slope. ⁓

Dylan Silver (17:38)
Beautiful description.

DeMarcus Hunter (17:39)
So

it’s happening in Chicago. It happened slower because, I mean, in Chicago, we don’t have money like New York. Like New York can just go snap their fingers and like, boom, okay, every, you know, every brownstone is 8 million bucks. So that’s not us, but like, I see it like, and I work a lot in the area and like each time that a new project starts, I’m seeing new changes, you know, ⁓ new buildings showing up, new restaurants, ⁓ new faces.

⁓ And so before it was just kind of like the overspill from like the University of Chicago, which is in Chicago’s ⁓ Hyde Park neighborhood. And now it’s not just that, it’s people actually moving from outside of the Chicago area directly to Hyde Park, or sorry, directly to Brownsville.

Dylan Silver (18:33)
If you had to build a portfolio from scratch, would that be the areas that you’d select to start the core event?

DeMarcus Hunter (18:44)
I would say, so I’m not gonna speak for everyone or every new investor, but I would say, ⁓ you know, it would be definitely an area of high interest for me, just looking and look at the ability for the rapid expansion of that cap rate, ⁓ the ability to churn inventory.

Dylan Silver (19:08)
We are coming up on time here though, DeMarcus. Any new projects that you’re working on, and then also what’s the best way for folks to get in contact with your team?

DeMarcus Hunter (19:20)
Okay, so the best way to contact me, ⁓ there’s a few different modalities. ⁓ Two websites, so there’s Blackstone and Birch. ⁓ Blackstoneandbirch.com and demarcushunter.com. You can find me on Instagram @listwithdemarcus or @blackstonebirch. So that would be my real estate team and my own personal Instagram. ⁓ So like, you know, smoke signals, email.

⁓ I am based out of Compass Real Estate. So that was a move as of July of last year. So like, you know, basically coupling myself with a tech powerhouse and me being, you know, an ultra techie. it’s a good mesh.

Dylan Silver (20:04)
Well, thank you so much for your time today, DeMarcus. Thanks for joining us and for talking about Chicago real estate. Appreciate it.