Dr. Ca$h Flow clearly had the crowd’s attention. Wearing a tie emblazoned with dollar bills and with a sheaf of plastic greenbacks protruding from his pocket, he strode up and down in front of his audience, explaining loudly how they could make money as landlords.
In the audience were about 200 real estate speculators and wannabes. They had turned out for a monthly meeting of the Chicago Creative Investors Association to hear him explain the nuances of running a full-time rental operation. Periodically, he would flick wadded-up dollar bills at them when they responded correctly to his questions, provoking squeals of approval.
Dr. Ca$h Flow (whose real name is Nick Sidoti, a real estate investor from New York) was the guest speaker at a recent meeting of the Glen Ellyn-based real estate club, a networking and educational group that says it has 950 dues-paying members.
Founded in 1983, CCIA is one of Chicago’s oldest real estate investment clubs. It is one of about two dozen such groups in the area, many of them organized in the last couple of years as real estate mania has generated a zeal for deals.
Investor activity across the country is so hot that housing industry analysts are beginning to warn that investors could be stoking an overheated market.
But that notion doesn’t seem to faze those in the market.
“There is a thirst for information,” says Marco Mallard, who leads the Black Real Asset Investment Network (or Brain Chicago), a smaller and generally quieter group that meets monthly at the Woodson Public Library on Chicago’s South Side.
The National Real Estate Investors Association, a trade group for such local clubs that is based in Covington, Ky., says its membership has quadrupled since 2002, to 177 local groups representing 20,000 members. Overall, there may be more than 500 such clubs nationwide, it estimates.
They are not a spin on stock market clubs, whose members pool their assets to invest in equities, the real estate groups say. The real estate clubs tend to function more like seminars, with question-and-answer sessions and a chance to swap ideas and make contacts. They typically offer expert advice on breaking into real estate and networking for those with more experience.
“We need someone to take us by the hand and lead us,” explained Rita Smolarek of Oak Lawn, who had come to hear Dr. Ca$h Flow. Six years away from retirement from her job at an auto dealership, she wants to buy a 10-unit apartment building because she would like the security of the supplemental income.
“For most of us our IRAs aren’t making it anymore,” said Debra Reschke of Barrington, who was at the CCIA meeting, her second club in as many days. She said that with her children now grown she is looking for a new direction in her life, and is poised to begin buying out owners of properties that are in foreclosure.
“I’m going to take that money and invest in real estate,” she says. “You can make double digits in real estate, but with an IRA you’re making very little.”
Retirement anxiety and disaffection with Wall Street are common themes among attendees, group organizers say.
“Most of them come in bleeding from the stock market,” said Jim Hughes, who founded the Midwest Real Estate Association in December 2001. The group, which now has 400 members, meets each month in Elgin.
“I get almost 100 percent hands in the air when I ask, `Has anybody here lost money in the market?'” he says.
Hughes’ group, like many others, rotates monthly topics based on input from the membership. He reels off some popular ones:
“Buying with no money down, preforeclosures, how to find good deals, negotiating, landlording, multiunit apartments, short sales, wholesaling, buying `subject to,’ rehabbing,” he says. “There are probably 10 more.”
The topics tend to be similar, but the groups are organized in different ways. Hughes, like CCIA founder Jane Garvey, runs his club as a business. Such clubs offer the choice of paying an annual membership fee that may range from $50 to $100 or so, or paying an admission charge of $10 to $15 per meeting. The fees cover the organization’s overhead and the speakers’ fees.
Some of the groups may offer newsletters or extra, specialized workshops for members only. Hughes’ organization recently began streaming its meetings, live, through its Web site.
Other clubs are not-for-profit and considerably more low-key, with maybe only a handful attending a given meeting.
“We don’t pay people to speak,” explained Mallard of Brain Chicago. He said speakers are often from the real estate, mortgage, building and legal communities, and the meetings are free to the public.
Mallard says his membership has grown from six to about 75 since he opened meetings to the public a year ago, with 60 people typically attending each month.
He says he is not surprised at the interest. “Anytime you look at anyone who has done anything to obtain wealth, it usually has to do with real estate,” Mallard said. “It seems like something that anybody can do.”
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Mumberger@tribune.com
