Lately I have been getting tons of emails from blog readers about the great deals they have been finding recently in Michigan condos.

My advice is to stay away from condos in Michigan. Even though you can find some killer deals in them, because:

1. It is a known fact in the real estate community that condos are the last one to go up in a boom; the first ones to down in a bust. They are not a good long term investment by any stretch and in case you do want to buy one and keep it as a rental or lease option – you should consider that possibility that their value will go down more in 2007.

2. Most Michigan condos that have killer price reductions on them – whether with a Short Sale or a REO – are two bedrooms. It is extremely hard in the best of time to sell two bedroom houses in Michigan let alone a condo.

Forget about the price you can buy the condo for and think for a second who are the potential buyers for your foreclosure flip?

Most likely they are first time homebuyers with a family or thinking about starting one.

They want space and rooms. Two bedrooms houses are hard sell let alone a condo with two bedrooms and no backyard. If you have access to MLS then do a search on condos that have been sitting on the market for a while.

Then do a Search on houses that have been sitting on the market in your area. You will see a larger number of 2 bedroom houses and condos in that list more then anything else.

That is not a coincidence.

3. There are areas in Michigan where people want to buy a condo and live there. Most likely they are NOT buying the condo but something else that comes with the area – closeness to downtowns in Birmingham, Ann Arbor or Royal Oak, lake front in Keego Harbor or Sagitawc, extraordinary public schooling system like Birmingham.

In either case it is NOT the condo that is being bought but something else that is making the condo flip. Does your potential condo deals has that kind of “hook” in it?

If not then you would be sitting on that property for a while.

4. Condos are expensive – they have Condo Association dues which by the way if you read #3 then all the good areas where condos do get sold because people want to live there traditionally come with a higher Condo Association dues.

For example I saw a condo in Royal Oak, which was selling like hot cakes where the association dues for a 1 bedroom condo were $225 per month; taxes another $250 per month. That is $500 per month that your buyer has to qualify and pay and we are not even talking mortgage payment here.

5. Appraisals for condos in Michigan get “cut” by lenders. If I know about their bad points so does the lending industry. Apples to apples – an appraisal for a house is most likely to pass through for a flip. An underwriter might hammer a condo’s appraisal.

Bottom line is this; in November 2006 there are enough good deals in every single county in Michigan that there is no need to stress yourself out and buy condos that you will have a harder time sell them when the time comes to flip them out.

Look for 3-4 spacious bedroom houses, brick, with basements and decent backyards.

You know the kind of house you would want to buy for yourself.