Detroit Real Estate

I got an email about buying a Redford home, bankruptcy, and bad credit.  Here is what the email said. 

I don't know what to do, I'm at my wit's end.  I have to have one of the lowest credit scores possible that it is under 500.  I can afford most of the Redford homes that I have looked at.  Most will cost me $300.00 less than the rent that I am currently paying ($800.00 a month) including property taxes.  But my credit is so bad is that I can't get out of the hole, what can I do other than file bankruptcy?  And how will filing bankruptcy affect my chances of getting into one of the homes I like.

 My answer is to this poor guy is:

If you are looking to buy  a Redford home this year you are out of luck, there is no quick fix so you can buy a house.  Sure a credit repair company "MAY" be able get you into a Redford home in six months, but you will be doomed to fail.  Simply because you haven't gotten into the habit of making your payments on time.  I would bet a hundred dollars that you would lose the house in the future.

My suggestion is to take it slow and do it right.  Get into a routine of making your payments on time.  The key in your situation is to file bankruptcy and start over.  But be sure to consult with a bankruptcy lawyer, don't rely on my advice.  You should seek legal advice and make your decision based on their advice.  You have to make a clean start otherwise you will always be in this predicament.  After you file bankruptcy you need to start establishing new credit slowly.  Get one secured credit card and use it to buy gas or groceries.  Pay it off in full each month.

I hate to say it but having a good credit score boils down to making your payments on time.  A good credit score is good credit history.

Now this will take time, but it is the only way.  There is no quick fix to bad credit.  You have to earn it.  You can get a FHA loan 2 years after a bankruptcy.  But you need at least 3 credit lines open for a year with most lenders in this current market.

So don't get upset and feel bad that you can't get credit now.  That you can't buy a home now isn't a bad thing because if you did I would bet you would be in foreclosure within two years.  So start putting your financial building blocks back together.  Bankruptcy first, open a secured credit line, pay your payments in full on time, open a second line after 6 months, don't let anything go over 30 days late.

It's not hard once you put your mind to making your payments on time.  No excuses if you want a home.  So I ask you how bad do you want that Redford home?

My quote of the day is:

For time and the world do not stand still. Change is the law of life. And those who look only to the past or the present are certain to miss the future.

                                                                                            John F Kennedy 

Here is quick story about recent Novi home inspection with a Metro Detroit first time home buyer.  They called me up to meet.  Not cry, no overly upset but with a few worries.

The Novi home was built in 2002.  But as the Metro Detroit home inspector was going through the home he made these comments:

1. The furnaces were in good shape but they were just mediocre quality or average quality
2. The hot water tank was just fifty gallons and that they wouldn't be able to shower and wash clothes at the same time
3. The outside of the house needed painting and caulking
4. There is only 9 inches of insulation in the attic.  Since 2002 the Department of energy recommends more insulation than that.

We sat down to talk about all of these things. When you buy a Novi home, the quality of furnaces, appliances, water heater, and other items may be of lesser or greater quality that you would buy.  The seller is not going to up-grade a furnace to a better quality furnace if it is not broken. The best thing to do is use the furnace and then replace it when it breaks.  Or if it is really bothering you, buy a new one.  That is unless you want to reduce your energy costs and replace it with a high energy efficient furnace.

The average water hot water tank is 40 - 80 gallons.  Yes the builder didn't splurge on the hot water heater and the home owners didn't know better to ask for a bigger one.  An new one should cost about $500 - $700 depending on the contractor.  But in my house we never run the washer and take a shower unless we are in a rush or are going to take a short shower.  Again the seller most likely won't put in a new one because the old one isn't broken.

Outside painting - The paint isn't peeling and yes it does need to be painted.  Because this is a Novi foreclosure the bank is not going to get involved in maintenance issues.  They are going to tell you no.  They are going to say "take it or leave it".

All of the homes in the Churchill Crossing subdivision are about the same age.  So they all have the 9 inches of insulation in them which was required at the time.   Yes the Department of Energy now recommends much more but you have to look at the cost to install, the savings you will get, and how long it will take to get your return on your money.   Again the seller is not going to do this.

So when you do your Novi home inspection or any inspection in the Metro Detroit real estate market don't expect the seller to upgrade working items.  Don't expect them to do maintenance items.

Most sellers will not replace or add to items that are working or sufficient.  It will be up to you to upgrade a working part of the house.  And most sellers will not do common maintenance items unless you push the issue.  If it is a foreclosure the bank many times it will come down to.... do you want the house as is or not?

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Marianne has so many good traits.  I honestly didn't know which ones to start on.  I thought maybe I would be writing about love, or kindness because those are two of Marianne's strongest traits.  But last night I couldn't help but laugh.  Here is a lady in a fight with cancer,.... laid out on a hospital bed and what do you think she is doing?

She is feeding her visitors.  She is playing hostess.  I wish I had a picture but I don't have my camera with me.  But on her counter in her room she has a dessert bar.  Off her lunch and dinner trays she has two cookies that she hasn't eaten.  Then she has a cup of chocolate covered almonds that somebody brought her.  A brownie. And 4 cupcakes that somebody brought her.

Yes even though she is sick as a dog, she is trying to feed her guests.  She is amazing.  She asks everybody when they are there if they would like something to eat.

Marianne and her nieces daughter this year.

She taught me to be a better host.  It doesn't matter whether they are working on the cable, or fixing the washing machine you always offer somebody that comes to your house something to drink.  Friends, family or visitors that stop to chat you pull the bowl of nuts, chips, cheeses, or desserts out.  You never let friends leave your house hungry or thirsty.  That is my wife's motto. 

If you throw a party she always has enough to feed two or three times more people.  We usually give away food to the guests going home and I still eat for 3 or 4 days later off the leftovers.  Nobody could ever say they came to our house and didn't get great food and a overwhelming amount.  This is what my wife has taught me.    

My Marianne, my love....

Here is the first in the series of Metro Detroit first time home buyer information including Novi Real estate

The absolute first thing you should do is figure out yourself what you can afford to pay a month for housing expenses.  What I mean by that is what can you afford to pay each month.  You want to feel comfortable and not be stretched when it comes to your finances.

I DON'T WANT YOU TO LOSE YOUR HOME IN TWO OR THREE YEARS BECAUSE YOU COULDN'T REALLY AFFORD THE HOME.  I want to find a home that fits your budget that you like.  Sure I would like to live in a bigger home with a huge kitchen, large finished walkout basement, built in swimming pool, and large lot.  But I really can't afford that.  I don't want all those maintenance costs, utility costs, and higher insurance costs.  Sure I could pay the payments but then I couldn't take vacations, or go out with friends as much, or buy some of the things I want in life.

Remember when you buy a home you have to remember that you will have homeowners insurances, and taxes to pay.  Our goal is to get you a nice home without making you house poor.  So sit down and figure out how you what kind of house payment will make you feel comfortable.   Anybody can buy a home, but the key is to afford it while living a good lifestyle and be able to save for the future too!

I hope this Metro Detroit first time home buyer information helped you.

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Here is part two of my experiences of a Metro Detroit landlord & managing investment properties.  It is not easy being a landlord.  There are many pitfalls.  It is a very challenging business.  This is one of my past experiences. 

Currently I have a Canton MI investment property.  But my first experience as a Michigan investment property owner was horrible. I made all the mistakes you could make.

So I am writing this so you don't make the same mistakes I did.

I rented the house and kept the garage to store personal and business equipment.  I also kept a boat on the property during the winter.  MISTAKE.  You have to remember there are problems with this.  The people you rent to see what you are bringing in and out of the garage or the building on the property.  The renters are there all the time.  They have time to get into the garage without anybody knowing.  Remember the people that rent from you aren't rich.  So what you have may seem like a lot.

So your property is enticing to them. 

My experience was two fold.  They broke into the garage.  They actually took the wood off the back side of the garage and crawled into it.  Another time I stored a shrink wrapped boat.  They cut a slit in the shrink wrap and stole the radio, the depth finder, and anything else that wasn't nailed down.

It's no doubt my renters did it.  But I couldn't prove it.  My advice to you is never plan on storing business or personal property on a rental property that have renters living in another part of the property.  You will have theft problems.  Don't do it.

This is my experiences of a Metro Detroit landlord & managing investment properties.  I hope it provides you with experience, so you don't make the same mistakes.  If you benefit I will have done a good thing. 

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