How to get started in Real Estate in Michigan with its property values in the tank?

Question

How is a new in, vestor supposed to capture "ANY" kind of deal when Michigans property values are stagnant? Any advice? I mean whether you flip, do no money down, do fixer uppers nothing is really appreciating in value in this region. How can you, as an investor in Michigan, depend on a long term tenant/rental agreement to cover any of your costs when you are losing assessment value at the same time? Then again-why should renters rent a house when they can move into a nice condo for the same price? I am new at residential investment any advice would be welcome.. Commercial properties are almost the same situation here with tenants and what have you,  :D

Account Closed · Answer

dan,

not everyone can buy a house/condo.  just bc prices are low, they may not qualify for credit or income reasons.  Do you have cash to buy, or financing??  If a house is selling for 20,000....on a fixed rate mortgage, the principal and interest payment will always be the same in twenty years,  no matter if the house appreciates or depreciates.  So buy as low as you can and don't wory if the house value goes down in the next few months, as long as you can keep it rented...if you believe in the cyclical nature of an economy, then you must also believe that house values will eventually appreciate, especially with the coming-soon-to-a-theater-near-you inflation.  this is a long term strategy of course...maybe rent to owns would be a good option bc i'm sure there are people who want to own, and plan on it in a few years..everyone is jumping on the bandwagon that it's the right time to buy....capitalize on that with rent to own

Drew Sygit · Answer

I know several investors that are flipping properties in the Oakland, Macomb & Wayne county areas.  There's actually a shortage of turnkey homes for buyers, demand being fueled by the Home Buyer Tax Credit.  It'll be interesting to see what happens after that expires.

I also help run a property management company that's not ahving a problem filling rentals in southern Oakland & Macomb counties.  If you have a good product, in a decent area and ask the right rent - it goes relatively quickly.  Threebeds with basement get $700-$1,000 depending on location, size and condition.

So, wholesaling, flipping and landlording are all doing well if you buy at the right price.

Douglas Christian · Answer

To me it all depends on which angle you are trying to take.  I am a LONG TERM investor.  I have properties in MI and they are doing quite well.  Buying good SOLID investments and putting a good rental rate on them and allowing the tenants to pay the mortgage down is the game for me.  I hear many STILL talking about buying to FLIP or RESALE.  Wrong time and DEFINITELY the Wrong market and to me that goes for across the country.  Real estate investing was made for LONG TERM wealth not this short term get the QUICK CASH and run that has RUINED a good opportunity for many.  If you are considering getting into the game you would want to start in a place that properties are AFFORDABLE and you can RENT out.  There are many people who still live in the MI area needing homes.  What they have now is a lot to choose from and that makes your job that much more difficult.  But, please do not be fooled many cities across the country are faced with the same DILEMNA it is that they were not thrown out there like Detroit because of the car industries.  If I was going to take a risk I would take one there and make it a CALCULATED RISK.  Stop looking at the other places and what they are doing if you are going to be an investor, then do your due diligence and become an investor.

What happened to all the MADOFF people who were SCAMMED?  Get this I could have taken one of them and bought them an apartment bldg in MI and they would not be in the PERDICAMENT that they are now.  This is why I tell people I control my own DESTINY and do not ALLOW other to do what I am capable of doing.  I can waste my own money.  See but in America that made to much since go and buy something that would give you a monthly and yearly return.  Well that is enough for now, but for all of you that are trying to figure the RIGHT SITUATION, the RIGHT TIME or the RIGHT PROPERTY.

Now is the time and who really knows if it will be the right situation, but at least you will have taken the proper steps to see if this is for you or not.

SUCCESS BREEDS SUCCESS

Jim Wineinger · Answer

I would have to disagree that MI prices are stagnant.

There are several areas of MI that do not rely upon the automotive industry for jobs. In these areas the jobs are stable and prices of homes have actually increased.

The Detroit, Ann Arbor, Lansing areas are only a small portion of MI.

There are opportunities out there for those who would look for them (even in the motor city area).

Ryan Mertz · Answer

I am preparing to become an investor so all my knowledge is based on what i read,my opinion and common sense!

I believe the michigan game is all about finding that perfect single family home and go long term.
In my honest opinion if your in michigan
If you dont have 2 years worth of house expenses saved with no income coming from the house then maybe wait and think about what your doing.
i say find houses and make deals that have  $4000 or less in expenses a year.
 You should be some what covered as far time goes.
And you have over a year to come up with a exit strategy Just the security deposit alone from the renters  should help  minimize your over all risk of loss for the 1st year.
the rest of the loss just claim on your taxes.
i believe thats how it works. 
consult some of the pro on here
Also if you want to network I have a investment plan you might like.

Herb V. · Answer

Dan, Michigan property values aren't much different than the rest of the country. The problem I have is finding a buyer with a good solid job. Herbster

Curt Davis · Answer

Dan,

You might have better luck investing in another city.