The Michigan market

[Ali Chami]

I'm not a real estate expert by any stretch of the imagination. The only reason I have had success in the short time I have been seriously investing is because of local market conditions, both sales of existing homes and rental markets.

REOs can be purchased and completely rehabbed for 20 to 30 cents on the dollar, and renters are lining up. But what does this indicate for the long term? I notice that around the country, the new thing is negotiating short sales, but in my local market it's a waste of time. Just wait for the house to foreclose and you can pick it up for a fraction of what the bank will approve for a short sale. Rent has gone up significantly, by over 20% in many areas. While this is great, are these conditions usually a prelude to something bad for someone who is holding properties?