A recent article in The Chicago Tribune by Carolyn Bigda reported that young investors are becoming more interested in buying global stocks.  In her excellent piece, "Study: Global stocks appeal to the Young," Bigda wrote that a study from Franklin Templeton Investments found that investors in the age 25-34 age group "...plan to put one-third of their assets overseas, the largest of any group."  

 A savvy choice for the other two-thirds of their assets would be investing in Chicago real estate!

The best investors in history, such as Warren Buffett and Peter Lynch, advocate investing in what you see doing well in the neighborhood.  As Buffett and Lynch were primarily stock buyers, that entails buying shares of the companies whose products are selling well locally.  That will be tough to do with many international investments.

 

But for those in the area, it is easy with Chicago area real estate.

As prices and number of sales are soaring, Chicago real estate is proving itself to be an outstanding investment, particularly for turnkey rental properties.  Those properties, which are fixed up, rented out and then managed by experienced real estate professionals, are an ideal way for any investor to get started in Chicago real estate.

Should an investor not want to own the actual property itself, then private mortgage notes are the ideal asset.  A private mortgage note results from an investor financing the purchase of a property.  An individual can finance a single buy or join with others in a pool of private mortgage capital that floats the purchases of a variety of properties.

What Chicago real estate provides investors, no matter what the age, that global stocks due not is control and flexibility.  Once an investor buys shares of a publicly traded company, there is little influence that can be exerted other than selling the stock.  Investors can only respond to what the management of the company does by leaving, which can cost a great deal of money.

But with owning property and financing private mortgage notes, there is tremendous control and flexibility.  For a private mortgage note, the terms are set by the lender and the borrower.  Real estate investors can choose which neighborhood in Chicago to buy properties.  The buyer can decide whether the property is a condo, house, or apartment building.

The returns will most likely be better for passive, long term investors in Chicago real estate.  Jerry Cohen, President and Founder of EquityBuild, a real estate investment firm very active in Chicago reports that for transactions, his company has been averaging a 17% return.  For private mortgage note funding, the yearly yield has been 12% for EquityBuild Finance, the financing arm of EquityBuild.

Interestingly enough, foreign investors have buying Chicago real estate.  

A recent article on this site, "Foreign Investors Love Investing in Chicago Real Estate and You Should Too," reported that Chicago was one of the nine major markets for $27 billion in foreign investment in US real estate in 2012.  This brings up the basic economic principle of "revealed preference."  Consumers and investors will reveal their wants and needs through what they buy.  If investors from abroad are moving to acquire Chicago real estate, that is a sign for the young in the area that there is no place like home for profitable investing!