Detroit Real Estate

Here is an idea of buying Michigan foreclosures to build your retirement portfolio .  So many Americans are financailly in trouble when it comes to retirement.   Our stock and mutual fund portfolios have lost value.  We all worrying about our golden years.    Add in that many people's incomes have been reduced by the economy.  So many people are not putting away for retirement.

So what are we do?  Here is my plan.  There are many great homes in the metro Detroit area that are selling for under $35,000.  If you shop right you can pick up some very nice homes for under $35,000.  Michigan foreclosures that have newer windows, decent roofs, decent kitchens.  Homes that have the basics in good shape.

Many people have IRA's that can be converted into self directed IRA's.  Or some people have home equity loans not run up to the max.  Some people even have cash. 

So here are my thought is buy a decent $35,000 Michigan foreclosure. Let's take this example taxes are going to be $282 and homeowners insurance is $60 a month.  For a total outlay of $342 a month.  Let's say you get $800 a month.  That is $458 cash flow if you bought it cash.  Let's say you took it out of your home equity loan.  You could pay off the house in about 8 years (if you could keep it rented). 

Think about this in numbers.  If you bought 4 of them that would be $1832 a month in income.  Or you would have 4 Metro Detroit homes that would be paid for.  Even if they did not go up in value in 8 years.  They would have paid for themselves.  Plus you have tax deductions too.

Just my thoughts on Buying Michigan foreclosures to build your retirement portfolio.

21 low cost tips to improve your Metro Detroit's home curb appeal  

Livonia MI real estate and homes for sale

Whitmore Lake homes for sale MI and Whitmore Lake information 

Metro Detroit Sheriff sales and sheriff sale process

Search Southeastern Michigan foreclosures and get them emailed to you daily, weekly, or monthly

I have seen homes that are absolutely beautiful upstairs and have mold downstairs.  Homes that need no work but have a moldy basement.  Those are the homes you might want to consider if you have the money and the people to clean it up. Most Michigan home buyers run at the sight of mold.  And I agree in many cases you should run.  If you can't afford to fix the cause of the mold or afford to re-mediate the mold correctly you should run.  Many times it can become a major project because the mold has come down the walls and is behind the walls.  Those types of projects can become nightmares because you don't know how bad the mold is behind the walls.

But mold in the basement is one area, I think most cash Michigan home buyers should think about the home more.  If you and your family member don't have allergies or asthma this might be a problem that can be corrected.   If you have allergies or asthma you should stay away from Michigan homes with mold.

I think there is opportunity to buy a home at a great price is when the sump pump backs up and floods the basement.  When Michigan home owners walk away from their foreclosed house they shut off the electricity.  Sometimes the bank doesn't even know the homeowners have left.  So when it rains the sump fills up, the basement floods, then the mold starts to grow.  This is what you seeing in these pictures. 

A basement flooding happens quite often in Michigan foreclosed homes because of the electricity being off.  The flooding stops as soon as the electricity is on and sump pump starts working. But by then it is too late.  The drywall is wet and the conditions for mold grow are there.  So the mold grows on the drywall.

 This foreclosed home was in Southfield Michigan.

But when the basement floods the drywall will draw up the water like a sponge.  Then the mold will grow as high up the drywall as the water got absorbed.  The water could have been one or two inches deep and cause all this mold.

What is great is that the mold can be cleaned up.  Of course whoever does the work should be qualified to do the clean up.  Masks and protective clothing should be worn.  But basically gutting the basement down to the cement walls most likely can be the solution.  Then cleaning up the cement walls and repainting can get the home back in livable shape. 

On the other hand when a Michigan home floods because of broken pipes and there is on mold on the ceiling, walls, floor trusses in the basement and on the walls of the main floor.  Then I would run the other way.  That home is a major project.  You may not be able to get all the mold out in a home like that.

So don't cross off the house with the moldy basement if you are a cash buyer.  But if you are a buyer that needs a mortgage then forget about the home and move on.  The only time I ever saw a home get bought with mold was a USDA rural housing loan.  I don't know how it slipped through.    

Search Michigan foreclosures       

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. 

Search Metro Detroit investment properties

How better to teach somebody than share my journey of buying an Metro Detroit investment property.   Years ago when I meet my wife I had a house.  It was early in our relationship so I didn't want to sell my home, so I rented it out for 3 years.  I finally sold it.  But about 7 years ago I bought a Canton duplex that I rent out to two different families.  So I do have experience.  My first experience of being a landlord wasn't very good. 

POORLY FILLED OUT PAPERWORK ----  I didn't do a great job of having a good rental contract.  I didn't fill out the lease completely.

NOT HAVING THE PROPERTY IN DECENT SHAPE ---- I rented the property out in poor or unsafe condition.  I even operated a business out of the rental property too. 

THEFT ----   I only rented the house and kept the garage to store my possessions.  I even stored a boat in the back yard one year.  My tenants learned how to break into the garage and steal stuff out of it.  The boat was shrink wrapped but somebody cut the shrink wrap and stole the radio, the depth finder, and anything else that valuable out of it.

SECTION 8 ---- I rented the home to a lady that lived with a boyfriend which was a no-no for section 8.   So she was conveniently absent and unable to let state inspectors into the house.  The renter had changed the locks on the house so I no longer had a key.  I couldn't let the state's section 8 people in.  it took me six months to get a check from the state because of these issues

DIDN'T PULL CREDIT REPORTS ---- I didn't know how to read a credit report.  If I talked to a person and liked them I rented to them.  No paperwork.  No references.  I went on gut feelings.

BEING TOO NICE ---- I bought every story the renters gave me.  They were cut back on hours at work.  They had been sick.  The kids car insurance was due.

I WAS TOO LACKADAISICAL ---- I didn't do yearly checks of the properties.  If they were late with rent I didn't jump on it.  I let somebody get 4 dogs!  I was just happy to have a tenant.

RENTING TO FRIENDS AND RELATIVES.  ---- I didn't know if I was moving in with a girlfriend forever so I rented my house to a friend with my possessions in it.  Damage and theft were just some of the problems, coupled with late rent and no payments some time. 

I hope to teach you by sharing my journey of buying a Metro Detroit investment property.

Search Metro Detroit Investment properties and Michigan home listings

Livonia MI homes for sale and Livonia MI real estate information

                Metro Detroit Lakefront homes for sale   

                                                             My quote of the day:

Never let your persistence and passion turn into stubbornness and ignorance.                                                         Anthony J. D'Angel

If you are buying Detroit investment properties and hope to make money, it is buyer beware.  The home may have all of these items when you buy it, but you have a good chance of losing them if the house stays vacant.  There are so many Detroit homes that have been stripped of copper plumbing, electrical wiring, furnaces, water heaters, kitchen cabinets, and light fixtures.

How often do Detroit homes get stripped?  All the time.  I would say 90% of Detroit homes get something stolen out of them.  So if you are planning to buy a Detroit investment property plan on dealing with this.s

Here are photos of one home that had been stripped.

Missing windows

                                                       Gone is  the bathroom sink and cabinets

No furnace here

They cut all the electrical out for the copper all the way back to the fuse box!!!! 

Kitchen is gone too!

Hey if there is no kitchen or bathroom cabinets you don't need a water heater you might as well as steal the hot water heater.

Some items are very apparent when they are missing.  But when Buying Detroit investment properties you have to be very observant.... sometimes the plumbing or electrical lines have been cut and you don't see it.  So if you are buying Detroit investment properties - buyer beware!!!!

Search Metro Detroit real estate

    My quote of the day:                                                         

Don't be afraid your life will end; be afraid that it will never begin.
                                                                                                                            Grace Hansen