Do not flip THIS Michigan Foreclosure...
Good thing about surrounding yourself with really smart people who are actively buying and selling bank foreclosures in Michigan is that you get great ideas and breakthroughs that most people will never think about.
So I had couple of my Inner Circle members talking about some of the recent deals two weeks ago and one of them Rodney, talked about some of his recently done Short Sale deals.
Two of them were duplexes. One of my members asked him how was he planning to sell these duplexes and to whom? Mom and pop or investors like us in Michigan?
His answer, “ I have no intention of selling these duplexes – I am going to keep them, rent them out and since I am getting them 50 cents on the dollar – the cash flow will be tremendous.”
That ladies and gentleman is what I call some serious out of the box thinking and here is why:
1. If you have ever wanted to own cash flow properties in Michigan – this is probably the best time to go and get duplexes which cash flow better (two checks instead of one) with some crazy discounts. I mean if a duplex gives you good cash flow when you buy it for $100,000 – imagine buying the same puppy at $50,000!
You still rent it out at the same rent but your mortgage payment which will typically eat out a good 70% of your cash flow just got cut in half – you will make more money just by buying smart with a short sale. B/y the way these duplexes need no rehab except paint, carpet and cleanup.
2. Banks loathe to own duplexes. Regular real estate buyers don’t buy duplexes – real estate investors do. So no matter what banks know that they are going to take a hit with some smart Michigan real estate investor down the road anyway so why not do a short sale now, take the loss and move on?
3. The other side of the foreclosure game in Michigan is that there is a strong rental market at least in the $650 to $750 per month range. Heck you can even get Section 8 tenants in most cities in Michigan if you wanted to go that route and let the State of Michigan send you a check.
Point is that there is more than one way to make money. Rodney does very well for himself buying and selling bank foreclosures but he also wants to add the cash flow part to his business by getting these duplexes not to mention some great tax deductions to offset his capital gains next year.
Sweet thing is that with a Short Sale now you have enough equity to even wholesale flip these babies to some other Michigan real estate investor if you don’t personally don’t want to play landlord now.
Just another strategy to add to your weapons belt.