Michigan Foreclosure Report by Mark Ijlal

New to buying Michigan foreclosures? Where should you spend your precious time?

I sound like a grumpy old man once in while when I am teaching new real estate investors when I talk about watching your time. Most of us are trained at least mentally to watch our money. The smart ones figure out early that money could be got later but time lost is gone forever.

So when you are new to this buying and selling bank foreclosures in Michigan and you have a daytime job or worse your own business that has you as the hardest working employee (most small business owners are nothing but glorified employees.)

Robert Kiyosaki, Rich Dad Poor Dad guy has explained this thing far better than I ever could in his earlier and best works – Rich Dad, Poor Dad and Cashflow Quadrant

But anyway – you are busy; add family, God, friends, hobbies to the mix and you really don’t have too much to fool around with. So you must work smart and do the right things from Day 1.

The whole idea is this:

Step 1: Find and do one deal.
Step 2: Get a check; your first check.
Step 3: Smile
Step 4: Repeat Step 1

So how can you and I make sure that we don’t spend our precious time wasted in ho-ha stuff where the other guy in your Michigan city is going to the title insurance company to his closing, picking up the check and cashing it?

Some strategies you want to print and implement:

1. Dumb Deal Evaluation: I cannot understand when somebody is perfectly willing to spend months on rehabbing a bank owned foreclosure in Michigan but not spending three weeks on smart deal hunting and evaluation to finding a house which only requires paint, carpet and cleanup.

I am not big fan of rehabbing houses. Period! Anymore in Michigan. The number of Michigan foreclosures coming to the marketing is mind boggling. You can find a decent deal, negotiate a good deal if you know that part of business, and be in and out of house in a matter of weeks and then concentrate on selling that house.

But instead, a lot of our fellow Michigan real estate investing community becomes desperate when they start and they buy the first foreclosure they come across, seduced by the equity number and not thinking about our buddy called TIME.

Look it is not about the money that is needed to rehab foreclosures in Michigan – dozens of places will throw checks at you to do that with hardly just a check for appraisal out of your pocket.

It is the time that is needed to pull a $30,000 rehab, which is a killer especially if you are new to the game. I have Rita Dalian and Alan Boike in my Inner Circle who are rehab tigers – drop them inside a Junker, no matter how bad it is today; in a matter of weeks they will get it done.

But they are the exception and very good at fixing houses because they kind like the idea of turning garbage into gold. They also have half a dozen deals just in the last couple of months between them.

If you are new and your are spending months fixing the darn house then what you are telling me that is you are perfectly alright with not getting a check for couple of months.

Bad idea.

Your time is better spent on finding a foreclosure in the first place that does not require this kind of rehab. I say wait 7 more days, find the right deal, know how to negotiate with the bank to get a big ugly discount and then walk in and walk out of the house.

2. Waste time looking for deals on the Internet spending their money buying Michigan foreclosures lists that have nothing but crappy houses on it.

The above is a total waste of money. Period! These houses are either in really bad shape, or in war zones, or the rehab needed to fix these houses is so much that by the time you are done busting your butt fixing it – there is no money left.

Look in Michigan if you add together the months of the entire foreclosure process – it is almost 12 months right now; Wayne and Oakland are almost 13 months to actually eviction because the number of foreclosures has risen dramatically.

So you mean to tell me that a good deal literally slipped through the cracks and ended up on some Internet site? Come on!!! Every REO Realtors has couple of dozen houses on their list that have been there for a long long time – well there is a reason if you could buy a 3 bedroom house in East Side of Detroit for $3000. That is not a typo by the way and I am not missing a zero.

You can really buy a house for $3,000. But the point I am trying to make is should you buy a foreclosure for $3,000??? How is the area? How much is the rehab? How long is going to take to fix the house? Three months or six months? That is not a business but rather like buying an old car and trying to restore it to its former glory. Bad idea.

Understand these 2 key points and you will be able to buy the right Michigan foreclosure, at a right price to get a decent check on your first deal. Leave the dreams of becoming a rehab goddess till your Michigan Foreclosure Deal #5.

Friday: Using Buying Real Estate Agents for buying REO’s in Michigan and Open Houses Version 2.0 in 2007