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How Smart Landlords Take Advantage Of Michigan's Foreclosure Market
How Smart Landlords Take Advantage Of Michigan's Foreclosure Market
By Richard
Ranali
Hands down, Michigan is the #1 place to buy Foreclosures for rental properties. When it comes to prices and the amount
of foreclosures, no state has it better than Michigan.
So what does that mean for Real Estate investors in Michigan and all over?
It simply means that now is the time to buy all of the Michigan foreclosure properties that you can through Short Sales,
rent them out and flip them later. Or re-finance in the near future and pull out the massive amount of equity that you have
in the property. It's the simplest way to get rich, buy low, cash flow and sell high.
Here is why it works...
All over Michigan, people are losing their current employment and taking lower paying jobs. Interest rates from ARMS are
also going up like never before. That causes a Tsunami of foreclosures as we all know. In addition to that, the refinance
boom that occurred a few years ago leaves everyone with no equity, so banks are forced to do Short Sales and take huge discounts
on properties.
People end up not paying the mortgage payments and saving their money for the day that they have to vacate from their foreclosed
home.
Since they're used to living in a house, they are more than likely going to look for another single-family home to rent
as opposed to an apartment. Therefore, there are floods of people looking for rental properties.
You, in turn, will have been finding deals with equity or looking for wholesalers to purchase a property with huge equity
from. Neither of which is hard to find in Michigan. Now you have a property for at ½ off and didn't cost you a whole lot
of money to purchase.
A $40 ad is run in the Detroit News for your rental property. The calls flood in to you, (remember because everyone is
losing homes and looking for rentals) or a property management company will weed out the good potential tenants and begin
the screening process. Once that is done you have a good tenant and you will enjoy a positive cash flow for as long as you
like.
If you decide you don't want to enjoy cash flow - or if you ever need a lump sum of cash you can refinance the property
easily because of the huge amount of equity that you have in the property.
You can also wait for the conditions of the market, on the selling side, to speed up and then you'll be able to sell your
property at top dollar, all the while enjoying a great positive cash flow.
In addition to that, you collect an upfront option fee and do a lease option or lease to purchase. There is a good chance
that the tenant looking for the lease option has a nice amount of money for a down payment, usually because they've been saving
money from the time when they 1st went into foreclosure, through Michigan's six month redemption period and all the way up
until they meet you which is typically around 10-11 months.
Here is an example
Sally has a home that's she's owned for 12 years, which is worth $100,000. She refinanced a few years ago and now she's
going into foreclosure. A short sale is done on her property and you end up buying it for $50,000 and you're mortgage payment
is about $300 monthly, assuming you've got it 100% financed. Sally's rent will be about $800 per month leaving you with a
positive cash flow of about $500 monthly and $50,000 in instant equity!
Years ago in the 1980's plenty of savvy people decided to invest in real estate and enjoy having their money work for them.
Then when the market turned around, they all sold their properties. Some actually got rich while others simply walked away
with a few hundred thousand dollars. But one thing they all did was recognize a golden opportunity, be smart and take advantage
of it and make money.
For more information on how to invest in affordable Michigan Real Estate email Richard at ReoRenegade@yahoo.com
For free information on buying, selling and investing in Michigan foreclosures in the current buyers market, visit or http://www.ReoRenegadeBlog.com or http://www.ReoRenegade.com
Article Source: http://EzineArticles.com/?expert=Richard_Ranali
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