I don’t remember who it was who asked the questions at last weekend – I think it was Michael Sinclair who commented on the number of houses that are for sale in Michigan and off course the media reports that houses are taking longer to sell in Michigan and off course blaming it on the “bad economy” in Michigan.

May I suggest to you that the bad economy solution is the easy way out? The obvious solution, which off course is the one, printed in newspapers by reporters who have talked to realtors and loan officers.

Here is an interesting exercise you can do – call on 20 For Sale By Owners types; go to Owners.com or ForSaleByOwner.com or just look in your Sunday’s newspaper section– and ask them if they help you with closing costs?

Guess what the majority is going to say? “Are you crazy – if I could afford to do all that I would hired a Realtor to sell my houses.” A large number of For Sale By Owners is not because the homeowners are prudent enough to try to save on the 6% commission but rather because the homeowners have NO EQUITY to give to begin with.

Same thing with the majority of the houses listed with Realtors – where there is just enough money to pay the Realtor, pay the transfer taxes and pay the bank or in many cases banks for the various liens of the property.

You and I on the other had are playing a different hand. Done properly we have a currency that most homeowners don’t have, will never have – it is called EQUITY.

Buying a house for me? Want me to pay for your closing costs? No problem! Want me help you with your down payment? No problem? Want to me to throw in an extra month mortgage payment? No problem.

Now off course if you are civilian and don’t know how to find foreclosures, fix them and sell like we real estate investors do then…

Bad economy? I guess somebody forgot to tell this to these crazy builders who keep building these houses, sub divisions after another. Read the Sunday’s edition of the your metro area newspapers – not the outdated real estate section but the New Construction Section where the builders are offering more incentives than a Las Vegas Casino. You know why they are throwing all the goodies at you – they have EQUITY.

The truth of the matter a large part of homeowners has gotten used to using their houses as virtual ATM”s – good for loan officers who are getting paid every time somebody refinances; good for Realtors who keep selling the same crowd houses over and over again with the line of average American buys a new house every 7 year!

Do you every wonder WHY they have to buy a NEW house every 7 year??? I mean do kids really become that BIG in 7 years??? How about buying them a bigger bed? And off course good for real estate investors who are being spoiled now by the tsunami for foreclosures coming in the market.

Name 3 people that you know you bought a house in the last 36 months and who put 20% down on their new home purchase.

How about 15% down payment?

I can name 1 person that I know personally who builds a new home – put 20% down payment. ONE person in 3 years.

How many can you name???

Now name 3 people that you know who have been living in their home for 5 or 10 years and have not refinanced – most likely a debt consolidation or cash out refinance and pulled every single penny out of their home. So even though technically speaking they should have some equity just by appreciation in their property but in reality they don’t.

I cant name even ONE!

So here is the non-obvious to think about – we the real estate investors who are able to buy bank foreclousres with EQUITY have a currency that homeowners how are competing against us in selling their houses don’t have – because either they bought their houses with No Money Down Mortgages with the hopes that the houses will appreciate rapidly which has not happened in Michigan with the exceptions of few HOT cities or we are competing against homeowners who have no EQUITY left to barter with after multiple refinances, cash outs, debt consolidtations episodes.

Truth of the matter is that if you are not making money in Michigan real estate now; cannot find good deals in Michigan; cannot convince yourself that there is anybody who is making money in Michigan, then may I suggest to you that the fault lies not anything but – drum roll please – but in your ignorance of what is really happening in real world of Michigan real estate.