KGCI: Real Estate on Air - Investment Real Estate Opportunities in Chicago, with Michael Scanlon

Episode Date: June 26, 2025

Welcome back to the Realty Funnels podcast. I'm Kevin K. Hill and I'm so excited to introduce to you, Michael Scanlan, who is a top real estate agent in Chicago, Illinois. Michael, welcome to the podcast. Thanks for having me, Kevin. I really appreciate it. Looking forward to it. Well, I've been looking forward to it too and I'm just excited to talk with you. Tell everyone a little bit about yourself where you do your business and what type of work you focus on. Yeah, so I live in Chicago, do my business in Chicago and the surrounding suburbs. I run a team of 28 people. And so we cover pretty much anywhere within about two hours of Chicago driving distance, you know, north-south, west. If you go east, you're in the lake. So we don't really do out there.

But we work with a lot of investors. And then we do, you know, regular buying, selling for non-investors. but our focus on the buy side is typically working with investors in multifamily mixed use, you know, a little bit of industrial other things, but mostly multifamily. Fantastic. And we're talking earlier, and I'd love for you to share with everyone, the background that brought you to your career in real estate, you know, going back to what you were initially doing and then how you parlayed that and then parlayed that again.

Tell us a little bit more about that. So I started my post-college, you know, post-undergrad career as a behavioral analyst. I was working with kids with autism, two to six-year-olds with autism. So I did that for six years and I love doing it. It's probably, you know, going to be the best thing that I've ever done. I hate to say that when I work in real estate, but just, you know, the impact that we were able to make on the lives of a lot of these children, and especially in early intervention and their families, you know, because it makes a big impact when you're able to get to them that early on.

That was something that I really enjoyed for a very, very long time. But it's very hard. There's a very high burnout rate in that field, and there's also not a whole lot of pay. And so it made it very difficult. And I had to make a choice of whether I was going to keep doing that forever in living paycheck to paycheck or try to do something to make a little more money for a little while. and then go back to helping in some way, whether it's volunteering or going back to just working with kids when I'm a little more settled. So I went back to school, got my MBA, specifically in

finance, thought I was going to work in stock market finance, and started to look at a lot of the numbers in general, in different forms of investing. And it just stood out that real estate was a much better avenue in terms of how I could, you know, help myself and help clients. And so 2019, after having worked for a mortgage company for about a year in their business expansion and learned a lot about real estate from my boss, I decided to get my license, thought that I was just going to use it for my own purposes. And then, you know, COVID happened in 2020. The world got weird for a little while. Business initially slowed down before, obviously, it picked up quite a bit. And so I decided to just dive head first into real estate, see if I could

figure that out and kind of control my own destiny. And, you know, it took off pretty quickly. It's a fascinating background. Over the years, I've interviewed so many different real estate agents as they were applying to the brokerages that I was running, you know, people from architects, retired physicians, psychologists, nurses that I can think of. And those people in the caring arts, you know, the medical professionals, they brought to their real estate career this very interesting heart for serving other people. And I know we were just talking a few moments ago about how your approach to helping people isn't necessarily driven on transactions.

It's really driven on relationships and having a servant heart. Tell us about that story you just shared with me a moment ago about how somebody called you up, asked you to help them, but it was a bit of a distance outside of Chicago. So this was early on in my career. And I remember I was actually at a lake. And I had gone for a walk. I had driven, gosh, 45 minutes to show a single property. And I decided I would take advantage before traffic calmed down and go for a walk.

You know, Chicago traffic is crazy at certain hours. So I went to this random lake and went for a walk. And then I started to rain and I got back in my car. And within about five minutes of being back in my car, I get a call. And I was just sitting there because I thought rain my path. I would go for more walking. And I answered it. And the person that had called me worked for EXP for our brokerage.

And she said, hey, I have property that I need somebody to list. And she was with a department that has now become what we call our Revenos department. It had a different name at the time. But I said, yes, like no questions asked. Yes, I will help you. And she said, well, you know, where do you live? And I explained, oh, I live, you know, basically in Chicago, like closer to downtown a little bit on the south side. She said, well, isn't this very far for you? And I said, it doesn't matter.

If you need help, I will help you. And she said, well, why don't I try to find somebody who's a little closer? And if I can't find someone, I'll call you back in a couple of days and let you know. So she actually did call me back in a couple of days. And she said, hey, I just wanted to let you know that I did find someone, but I really appreciated your willingness to help. And so we fast forward about a year and a half and she has now been promoted to a very high position within EXP. And she says, I have this seller that we're working on that has somewhere between 600 and 2,000 homes that they need to sell in Chicago and we want your team to handle it. And so we got an assignment to do 621 BPOs between me and some team members in 48 hours.

and we did it and it was insane and nobody basically heard from me and I was up doing BPO's until one, two in the morning and then woke up early the next day to keep working on them. But we got it done and about five months went by and they finally got everything sorted on the legal end and you know with the BPO's and now we've got a contract to get rid of all of that sellers properties and as they get the tenants out, we get batches of listings anywhere from one property to a couple weeks ago, we got 28 all at once. And so it's something that I didn't necessarily ask for, but just the willingness to help, you know, ended up endearing me to this person and it ended up working out. There's just been a lot of that in my career. You know, I don't

necessarily ever expect that to happen. Of course, nobody can. But I just like helping and putting good energy out there. And I'm always happy and feel fortunate when it comes back around. And it does. And it always will. It's amazing that law of circulation. Some of my favorite ministers talk about how we reap what we sow more than we sow later than we sow. The challenge for a lot of people is that they're not willing to sew in the initial stage. And yet you were, you know, you were happy to help that person with an opportunity where they needed someone to help. It was a bit of a distance for you.

My wife, Lisa, and I have taken those types of listings. We took one not too long ago where it was an hour and 40 minutes north of where we lived. It was a past client. She said she had interviewed local agents, didn't like any of them, didn't feel she could trust any of them, would we mind coming all that way to list her property? And of course, we were happy to because she wanted our help. And it wasn't a big expensive transaction, but for us, it was a little bit of a fun road trip. We're going to pack a lunch and hit the road, and then go see this past client who was very sweet, and she was always somebody who enjoyed working with us and we enjoyed

working with her. But it's amazing how when you start with that contribution that you then receive back more than you ever expected. Yeah. And you got to expect that it's not always going to lead to something. I've had two stories where, you know, I sold properties that to this day have not turned to anything else. But I had the same attitude as yes, of course I'll help. I sold a farm for a very old lady in a place called Ashton, Illinois, middle of nowhere. But same as you. I was like, I will turn this into a road trip. This will just be fun. And, you know, it just was something that I was happy to do. I didn't mind the drive. I like, honestly, getting out of the city when I can. I'm definitely more of a rural suburb type person, even though I currently live in the city.

And I had another one for people that are familiar with the Chicago land area. This is kind of outside of it. I sold a property in a place called LaSalle, Illinois back in 2021. It was a friend of a friend. She was having trouble selling her home. They asked me for help. And of course, I'm going to say yes. It's not far from a place called Starb Rock, which I very much enjoy hiking at. It's one of my favorite hikes in Illinois.

So I said yes. And I ended up recording the highest sale in LaSalle County for all of 2021 on that property and was able to get it sold through some very interesting approaches. I took a very rural approach and started putting it in local, you know, Facebook for sale, you know, groups like garage sale groups and real estate groups and just grassroots type of marketing. And we actually ended up getting the buyer that we got who saw it in a LaSalle County garage sale group. And it is not turned into anything else, but it still makes me happy to think back on it that I was able to help a friend of a friend. And, you know, so sometimes it'll turn into stuff. sometimes it won't, but it honestly, it doesn't matter as long as you help somebody.

One time, Lisa and I were contacted by an elderly woman about selling her rental home, a property she owned as a rental property in St. Petersburg where we lived. And we met with her at a local coffee shop. And she brought with her her sister and brother-in-law. She was elderly. She wanted to make sure she wasn't being taken advantage of. We were happy to meet with her. When they met us, they sort of like breathed easy because we're very personable and professional.

And we had a great experience selling that rental property for that woman. Then the brother-in-law called us a few months later and he said, hey, I've got a tree farm about an hour and a half north of St. Pete. Would you mind coming up and selling that? Wow. Lisa and I said road trip, let's do it. And we went up there, listed a 10-acre tree farm, learned all about tree farming. We had no idea that such an industry existed with these small-scale farmers who would plant a tree for five years and then go sell it to some new development outside of Atlanta. Take a truckload of trees up to Atlanta.

But it was fascinating. Then that tree farm sale led to another sale. and another sale and another sale. And we're like, wow. I mean, it's just you never know, but you just treat people really well, treat people professionally, always give it your very best,

and you're just planting those seeds that are definitely going to take root. Yeah. Oh, it's fantastic. So it's fascinating. You focus on this focus, which is the investors, multifamilies,

Chicago and the Chicagoland area, has got to be just a real incredible multifamily market. And I know that a lot of people listening are interested in investing in real estate. I think Chicago is always going to be a great investment location. It's one of those world-class cities. People will always want to live in Chicago. People love visiting Chicago. It's one of the favorite cities, at least than I ever get to visit.

So talk a little bit about that and why people might want to really explore the Chicagoland multifamily market for their investment portfolios. I think the Chicago land market is phenomenal. You know, people will bring up the occasional negatives of our landlord tenant laws just straight off the bat and I get it. You know, we're a more tenant friendly area. But from the standpoint of, you know, being a landlord, if you're doing a good job of screening your tenants, it's not as much of an issue if you're, you know,

buying good properties that are in nice. or condition, people tend to want to take care of them a little bit more. But just from an overall perspective of what you can get in Chicago versus what you can get in other areas, from major cities, you know, there's smaller cities that are rural cities where you can find higher cap rates, but you can find a new construction, you know, beautiful property, the heart of, let's say, Link Park or the Gold Coast for a six percent cap rate, which, you know, for those out there listening that aren't familiar with cap rate, the simplest explanation is that's your return on investment after all expenses if you bought in all cash.

You buy a property for a million dollars, you pay all your expenses, you end up with $60,000 at the end of the year. That's your net income. Now, obviously, your return investment changes when you throw in, you know, a loan and lebrid and it won't exactly equal to 6%. It could be more if you have lower interest rates or it could be less if you have higher interest rates, that's the simplest explanation for it. And now when you look at other major cities, there are people that are buying in Los Angeles

for 2 to 4% cap rates and they're happy to get those. There are people buying in Florida or New York at much lower cap rates. Oregon, you know, 3.5 to 4% cap rates near Portland. It's very difficult to find those types of cap rates in major cities. You go to, you know, smaller mid-market cities. I don't want to call them small cities. but places like Tulsa or Columbus, Ohio, or Memphis, you can find slightly higher cap rates, but there's not as much room for industry in those areas.

You have just all of the advantage of a major city here in Chicago. You have top 100 companies that are constantly setting up business here. We've got Groupon not too far from where I live. We have a lot of massive companies that, you know, have offices here. And so there's a lot of job stability here. There's a lot of tenants that come here. We have a lot of universities here. And so it makes it so that it's very, very easy to find renters.

And personally, I have a portfolio of 26 properties. Most of them are A-class properties in the city of Chicago in, you know, very nice neighborhoods. And it doesn't take me typically, you know, and I'll knock on wood. I'll find a delayed knock on wood. after we're done here. It doesn't typically take me more than one to two days to find tenants, you know, even asking a premium just because there's no more room to really build here. And so if you're buying, you're kind of locking in an investment. And for the long term, you're going to be stable. There's other areas where it goes up and down. And we talked a little

bit about how, you know, where you were at in Ohio and Akron, it's a very, you know, steady, eddy type investment. That's the same thing here. When the market went up mass in 2020 and 2021. We didn't see the gains that California or Florida or the Sunbelt in general saw, but we haven't seen it come down in the way that they have. We're actually still up 6% annual from 2023 to 2024 last I looked. And it was the same thing, 2022 to 2023. We're still going up even marginally.

And so there's just a lot of security. There's a lot of metrics that seem to indicate that, you know, you're not going to see 20% returns here, but you're going to see returns. And it's one of those very stable markets, as you were saying, tons of universities, major corporations, major corporations with headquarters in the Chicago land region. And then also, of course, it's a major transit hub. You know, anything coming from the east is very likely to go through Chicago onward to the west. And for all those reasons, it's a very,

attractive place to own rental real estate. And then when the time is right to sell rental real estate, you still have a vibrant market of buyers looking for rental properties. Yeah, it's actually very difficult to buy here right now. And that doesn't mean that you can't still get returns. You know, people that are looking for 7% cap rates are having to pay 6.5% cap rates, you know, people that are looking for 6 and a half or having to pay 6 because, you know, depending on area and how new it is, the cap rate changes a little bit. But there's a lot of buyers that are investing here. And so from a disposition standpoint and selling standpoint, the sellers are winning right now.

And that doesn't mean that buyers can't find good deals. You know, our team is consistently sourcing, you know, sellers that don't want to go to market. You know, we don't ever want to withhold something from the market. We think it's best to go to market whenever we can. I agree. But there's a lot of multifamily sellers that, you know, have owned property for 20, years and they'd rather make a little bit less and not disturb their tenants. And as much as I don't think that I would do that as a seller, I have to respect that it is a very consistent thing that we see.

And so we are finding some good off market deals and there is an ability to get into the Chicago market at a favorable cap rate. But if you go to market, things are moving very, very fast. I would think so. And that's really attractive when you are somebody who is improving a property. one of the things I love about real estate is that you can actually improve the piece of real estate, make it more attractive to your tenants, make it more attractive when you go to get it rented again. And then eventually it's going to be very attractive should the time come for you to sell. Perhaps you're going to consolidate and then buy something larger. Perhaps you're ready to exit out, maybe do a 1031 or a Delaware statutory trust and exit your holdings.

a market that is constantly vibrant like Chicago is a great safe place for people to invest in real estate compared to my experience as a broker and as somebody who invested in rental property in Florida, the game in Florida was not cap rates. The game in Florida was appreciation. And so you'd buy something, improve it, wait a little while. The market would pay you a nice dividend, but you weren't necessarily. necessarily looking at nice cash flow numbers while you were holding that property. But when you exited, that's when the gain all showed up. So I think it's fascinating. So people can reach out to you. You've got a huge team. You joined the industry in 2019. How is it that you went so quickly

from a new agent in 2019 who is looking to buy for your own portfolio? And then you realized you could help people as there became obvious need during the start of the COVID pandemic, people buying in Chicago and you're able to help them. And now you've got this huge team of what, 28 agents on your team? How did that happen so quickly? So it's very similar to what we talked about when it came to you know, helping out sellers. I was always willing to help out in any situation that I could. and a lot of that business that I initially got actually came through referrals from other agents, whether they were out-of-state agents or whether they were local Illinois agents that just didn't service a specific area.

You know, I definitely have some grit and some hustle to go along with it. You know, I was willing to take whatever, wherever. And so when agents would reach out and have, you know, a referral five minutes from my house, of course I wanted it. When they would reach out and have a referral an hour and 20 minutes from my house, I would say I'm happy to do it. Buyer, seller didn't matter. And there were days in 2020 and 2021 before I started my team that I would drive an hour

and a half north of Chicago and then my next appointment would be going out to Elgin and driving 45 minutes west to get to Elgin. Then I would drive, you know, 35, 40 minutes south to Aurora and then drive all the way home from there. and I would log 200 to 250 miles in a day just showing four to five properties in different areas. And just the willingness to help people has led to consistent referrals. You know, EXP has this online referral network. And for a while, I was the go-to person on there.

But establishing those relationships with those agents and always willing, you know, being willing to help whatever they had has left to those agents coming to me directly for a year. now and you know some of them that were small things before turned into you know big deals i i had an agent that i did about a two hundred thousand dollar referral for back in 2021 last year i closed represented both sides of a one point seven five million dollar 20 unit that you know she referred to me and so those are the types of things that you know like talked about so enough you know you put into seeds in the ground they're they're eventually going to grow into things and And so a lot of my early business was referrals.

And then I took a lot of very unique approaches. You know, I was in Facebook groups. I was, you know, on the website, Bigger Pockets, you know, which is a big investor group. I was reaching out to every single person that I could. You know, I'm in a relationship now. I've been dating the same girl for about two years. But when I first started, I was single and this always gives people a kick. There's a dating app called Bumble.

And Bumble also has a business section, which is supposed to be like a LinkedIn type swiping feature, like taking everything about LinkedIn, but you swipe people for business connections. And I actually found several clients through BumbleBiz. I had a prewritten message and I would just mass swipe people and say, hey, this is what I do. I can help you out with real estate. And I did two different clients. One of them just bought one property for me. but then the other one bought two properties and then sold a property with me. And so did about 1.2 million of transactions with her off of, you know, BumbleBiz.

And I'll probably eventually sell the, you know, three unit for you that she bought from me. So it was a very unique approach. But if you hustle enough and, you know, use the time factor of just building up your leads in, you know, just putting as many leads as you can and never stopping getting leads. That's the main thing is that you always are building up your lead base. and you eventually have enough leads to where you have to put people underneath you because you never want to say no to anybody doesn't matter whether it's a $5,000 listing, and that's not a joke.

We did a $5,000 listing that we closed maybe two and a half months ago or, you know, multimillion dollar listings. We never say no to anybody no matter what. And so I had to just keep putting agents underneath me and in different geographical areas of Chicago so we could just keep helping people out. And that early, you know, aspect of helping out as many people as we could is just proliferated. And it's been an exponential growth of, you know, if one thing leads to two and you, you know, plant 1001 things, then, you know, you're eventually going to end up with a ton of business. That's so fantastic.

And it all, I can see it. I've met so many real estate agents that I can see it immediately. You have this servant heart. I mean, you just really care at a deep level about people. And obviously that's why you were drawn to the behavioral analyst world that you were in with the autism children age two to six. What a servant heart you had for those young people. And I know that at some point you're going to be able to really contribute again in that space. Because you're having so much success in this space, it's going to afford you the opportunities to help those children again.

and who knows what that could ever lead to. But that same servant leadership heart is mission critical to success in any business. And I just love what you're doing with it. I just think it's fantastic. Man, we could talk for days. This is just awesome. So I know people will want to reach you. Real estate agents will want to reach you, send you their referrals for the Chicagoland area,

home buyers, home sellers, investors in real estate. They're all going to want to reach out to you. what are some of the best ways that they can reach with you and connect? Yeah, phone is super easy. 773, 6309205. You know, always happy to help there. And then email as well, Michael Scanlan at theaxongroup.com. The accent group is our team name.

And so, yeah, always happy to reach out. And it's, you know, kind of the same vein as the entire conversation that we've had, whether, you know, you need help buying or selling, or you just have questions. I am a mentor with EXP. I answer questions to non-mentees of mine all the time, whether it's about investing or commercial properties or, you know, whatever it is, I just want to help.

You know, there's a lot of people that were, are, I should say, are in the position that I was in, you know, five years ago when I first started. And, you know, and I want to see everybody succeed. So always happy to help. That's fantastic. So I'm going to repeat that for our listeners. Michael Scanlan at theaxon group.com.

And that is spelled T-H-E-A-X-O-N-G-R-O-U-P.com, the axon-group.com. And your phone number again, 773-6309205. Michael, one last question. I always love to ask real estate agents. And you've been at this now going on five years. What is one thing that you know now that you wish somebody had shared with you?

your early months in the career. Oh, goodness. That's a great question. It is. You know, I would say, honestly, delegate faster. They're one of the hardest things that I think you come across early on, especially, you know, if you are starting to have some success is hiring an admin or a transaction coordinator or starting to put people under. you on a team. I think I actually inhibited my own growth. I did, I think it was 29 transactions my first year, but 101 my second year as a solo agent. And I honestly think if I had started my team

much earlier that a team underneath me could have done way more than 101 transactions because the team now is going to do three to 400 transactions. And just that ability to delegate and push off things that aren't necessarily the highest and best use of your time like transaction coordination is well worth it. And I just held this vice grip on to, you know, I don't want to give up a lead. I don't want to, you know, pull myself out of any single transaction. You know, I had to touch everything. And if you put the right people around you, you don't need to do that. There's people that you can trust. And so I would have probably done that a lot earlier. And I know everybody says that. You know, I heard it early on. You know, people would tell me,

hire an admin, hire transaction coordinator, and I didn't believe them, but trust me, you want to do that. It's really interesting that you talk about that because that's one of the things I talk about so frequently inside the Realty Funnels world, which is that you really need to stay in your strength zone. Yep. And you need to, first off, decide what you can automate and automate as much as you can automate, then decide what you can safely delegate, then delegate as much as you can delegate, eliminate anything that doesn't actually need to happen anymore.

It used to work. Maybe now it doesn't work. Maybe you thought it would work, but it never worked. Get rid of that stuff. And then you can just stay focused in your strength zone. I think it's really a very powerful lesson. And obviously, here you are. You're going to continue on with this.

You're going to be able to do a lot more of that in the years to come. Yeah. Yeah, that's the aim. Well, Michael, thank you so much for being on the Realty Funnels podcast. It's a pleasure to connect with you and a certain a lot of people are going to want to reach out to you as well. Just in terms of growing their wealth through investment, real estate, I think Chicago is such a great market that people should consider. Yeah, and I really appreciate you having me. It's always good talking to you.