February 2007 Archives

I was talking to Ralph Claxton last Thursday at my Inner Circle mastermind for February 2007 (that is Ralph and me in the picture above) and he was telling me about his first successful short sale deal that he just got approved and he said, “ I am walking in to a $65,000 equity after some cosmetic repairs” and I said, “ Ralph you still look a little shocked that the bank give you a $65,000 discount” and he said, “ Well I am” and we both burst out laughing.

A similar conversation happened with Rodney in January as he was talking about the $115,000 short sale discount they got a house that only required around $11,000 in cosmetic repairs. Rodney is a pro now when it comes to doing Short Sales in Michigan but darn it $115,000 is still $115,000; it was Dennis first deal so he look liked a lot like Ralph – simply amazed that a fax machine and few pieces of paper can create six figure equity out of thin year.

There is lots of money to be made, equity to be had, with a lots less competition if you know how to “talk” to banks and especially Loss Mitigation Officers at banks who are solely responsible for approving big discounts on Michigan foreclosures. They are the warlords of the Short Sale world in banks. You take the effort to learn how to convince them - you have almost magical powers to create "Equity At Will"

Now a large number of Michigan real state investors mistakenly believe that the Loss Mitigation Officers can became their buddies which frankly speaking is a strange thing to pretend because their job is to minimize the loss that the bank is about to take from your hands.

Your mission, on the other hand, should you choose to accept it, is to whack the bank as hard as possible and “create” as much as equity as possible for yourself.

So when I say the 5 Lies That Banks Tell Michigan Real Estate Investors – I am not joking about it. They are going to get as much money out of you as possible. You on the other hand, armed with the knowledge in this post I am about to give you is going to whack their offense into tiny little pieces and still get your way.

I do want to remind you also before we go into these 5 Lies that banks tell and how to counter them effectively, that my Quick Start 2007 Bootcamp is happening on March 30, 31 and April 1 and I intend to spend the entire Saturday (March 31) –almost 9 hours talking about nothing but Short Sales in Michigan – how to get them in your Michigan city, how to put together a complete short sale package, how to talk to homeowners in foreclosure, how to “convince” banks to give you big discounts, how to flip these houses in Michigan to homeowners and other investors – the whole enchilada is covered from top to bottom with real life case studies and examples taken from my own deals and my Inner Circle members in Michigan in the last 12 months.

I like to teach small groups so I can spend time with each student and that number is almost there right now. If you are serious about buying and selling Michigan bank foreclosures then, do go to the Quick Start 2007 website, and take care of your enrollment right away. There is a very generous, 100% No Risk Enrollment guarantee and a $100 St.Patricks Day Early bird discount for students. Details are here.

Here is my list of Top 5 Lies That Banks Tell Michigan Real Estate Investors To Avoid Giving Big Discounts And How You Can Easily Counter And Conquer These Lies And Actually Turn Them Around To Your Advantage:

Lie #1: “We rather take the home back then to sell it to you at a loss.”

Oh please! Are you kidding me? You mean to me tell me that not getting a mortgage payment for 90 days; paying an attorney firm like Trott and Trott fees to file public Notice of Default in the county court house; paying hefty court fees; and then waiting another 7 months for the homeowner to leave the house and then paying a real estate agent another 6% and paying an asset management firm their fees to manage the liquidation, and even then no guarantee that you will get 100% Fair Market Value for the Michigan foreclosure – the bank is actually excited to take back yet another “Michigan Box” back?

It is not likely that this particular house is the only house that this particular bank is taking back this month. It is also not likely that the next month there will be no more foreclosures in Michigan; there will be a truck full of them, unloading at the gates of this bank and yet the Loss Mitigation officer is telling you calmly that that they rather take this house back then to sell it to you at a loss.

Look they know they are going to lose money doing the Short Sale with you – apart from some really small credit unions or local banks – the big boys of lending world do thousands of these deals every month. You should understand that. I mean I cannot imagine the number of foreclosures hitting Countrywide, Interfirst, Homecomings, Argent, Flagstar, and Citifinancial etc.

This is how I counter this lie;

"Oh come on, Michigan has a six month redemption period – meaning you are not getting your money back for another 8-10 months because of the six month redemption period in Michigan plus your house may get damaged either by the people living there or the harsh weather – why would you want to take this house back where you are about to get couple of dozen just like that in the next week or so? I am a serious buyer – ready to close within 15 days as soon as short sale is approved. I wish I could give you more money but in this market I simply cannot take a higher mortgage in my name”.

Rodney tells me that he actually made an entire collection of “bad news stories” out of Detroit News and Free Press and he actually includes them in every Short Sale package he sends out. Funny or what? For the first time we figured out how to use the negative news about Michigan to our business advantage.

I will teach you another huge lesson here – probably itself worth couple of hundred thousand dollars to if you use it wisely – Loss Mitigation is a regional game – meaning that the loss mitigation case officers can and do get transferred around in the department. We encounter Loss Mitigation officers all the time who were handling Florida or Georgia two weeks ago and now they are managing Michigan files.

Believe it or not they don’t know about the 6-month redemption period in Michigan – they think that all States have 30-day redemption, which is true for some States but not Michigan. So if you notice part of my counter is letting them know in a nice way of reminding them of this little fact. More than one time, the Loss Mitigation officer has come back with a “Huh! What do you mean I am not getting the house back for another six months.”

Knowledge, ladies and gentleman, is power.

Lie #2: “We have other higher offers on this property than what you offer. We need you to come back higher on the price.”

This is a typical voice mail, left on dozens of voice mails on Michigan real estate investors cell phones every day by loss mitigation officers hoping that the suckers or newbies will call back and raise their offers.

Hello! Think about it if I was selling something and there were two people making an offer on it – and the one offer was lower than the other – why would I waste time talking to the lesser of the two? I would call the one who made the highest offer and try to push him to give me more!

My short and to the point response to this lie;

" I understand that you might have a higher offer on this property – I have looked into my own numbers – you know the closing costs, the holding costs, the cost to renovate the property and I cannot offer you more than _________ on this property. Let me know if that works for you.”

Obviously if you know how to calculate your offer correctly to begin with (most of the new investors start between a place of delusion and hope and not reality) then your numbers t than you did started a little lower than what you wanted to buy the property in the first place.
Right?

Please say YES!

This is where you calmly understand that this is your opportunity to raise your price a little to that number, the one you wanted to make the deal happen anyway, make the loss mitigation officer happy that he is getting something more out of you, let him or her gain some face in front of his or her supervisor and yet you are about to pay what you intended to pay from day one.

Half of real estate is dealing with people; half of it is knowing your numbers – you should know both if you want to get some big discounts doing Short Sales in Michigan. I use a simple spreadsheet to calculate my offer numbers that gives me a breathing room from day one to come and counter this lie and win.

Lie #3: “We can discuss your short sale offer once the homeowner has gone current…”

Oh Mamma! Bring the smelling salts out right now if you are even thinking about doing it or you have done this blunder in the past because I am going to pass out. :o)

Going current means that the bank is asking you the pay the late payments on behalf of the homeowner BEFORE they even talk to you. The funny thing is that if you are crazy enough to do this than the bank and the loss mitigation officer has absolutely no incentive to talk to you.

Why would they bother giving you a big fat discount when they just what was owed to them and now they have couple of more months to delay the inevitable? Obviously the homeowner has no money to pay them otherwise the house would not be in foreclosure to begin with so the money is coming out of your account and if you do pay it then you might as well say goodbye to that wire transfer.

There are some real estate investors who like doing this, taking the deed of the house from the homeowner who wants nothing to do with it and then lease optioning it out. They like playing the landlord / rental game and may be if you are doing that then going current might be a good thing depending on that particular deal.

But what I do and my Inner Circle members do is we want to buy houses straight out. We want discounts on the houses; big ones preferably and the "going current" is not the way to go if you are looking to get $115,000 or $65,000 in equity that you just created out of thin year.

The way I handle this lie is

" Unfortunately I cannot go current because I am not interested in reinstating this mortgage loan with you. I am already approved with (put your bank name here unless you are paying cash) and I am interested in buying this home from Mr. Jones as quickly as possible if you approve the short sale, so going current is not a possibility at this point in time for me. However I can close within 15 days once the short sale is approved from you."

Lie #4: “We are looking into fixing this house ourselves.”

Once in a blue moon, a loss mitigation officer will utter these words. I can tell you that this is more of a possibility in high-end expensive real estate markets like California, Arizona, and New England etc than in Michigan. In Michigan I have seen this in high end houses in Bloomfield or Birmingham especially when there was mortgage fraud involved (pretty common in large foreclosures) and the bank is about to get killed taking this loss.

So sometime in high end houses they will try to fix the house and try to sell it retail. Although I stay miles away from high end houses, they are fun to live in but not fun to buy and flip unless you want to sit in them for the next decade in Michigan. :o)

You will not see this lie on the kind of houses I coach my Inner Circle members to do. I mean can you see a loss mitigation officer actually hiring a contractor to go and fix an $115,000 house in Dearborn or Detroit or Pontiac or Fraser or Kalamazoo or Grand Rapids? By the time they are done paying some ridiculously high amount to their contractors they will be in the hole even more.

One exception where this does happens is new construction foreclosures where the builder or the homeowner actually went into foreclosure for some personal reason (divorce, business went down under) during construction and the bank has no option but to grit their teeth and fix the darn thing. I once saw a $2,000,000 foreclosure in Novi – they were half done with putting bricks on the house when they went into foreclosure. The drywall was not done in half of the house. For all purposes it looked like a spec house. In that situation sometimes banks will go the distance just because the losses are so so high and get the house fixed.

Now if a loss mitigation officer did came back & said that to me, on a Short Sale package I sent to them for lets say a $110,000 ranch in Oak Park, Michigan, I will probably laugh and say,

" You are kidding right? You want to fix an $110,000 house and deal with contractors in this weather??? Well that is your decision but if you do change your mind in the meanwhile you do have my cell phone number, give me a call, I am approved and can close in 15 days from the point you say YES to me. I like Oak Park a lot but the house needs some major updates just to let you know to make it marketable in the Michigan market."

Nice, simple, courteous and to the point ands still leaving the door open for future negotiations.

Lie #5: “The BPO on the property is a lot higher than what you are offering.”

That is a pretty common occurrence and I don’t know why so many new real estate investors in Michigan freak out and start thinking about raising their offer prices just because of that.

I mean if you realistically think about it you are asking for a big discount on a Michigan house that typically has nothing wrong with it except paint, carpet, some kitchen updates (new counters / sinks) and minor cosmetic work so it is very possible that the house will come back with a bigger BPO than your offer. On a side note you should not; repeat should not; be doing short sales on Junkers.

So what?

This is how I handle it; actually there are two ways you can answer this, here is one that we use frequently:

" I understand that, but my wife and I do want to update the house since it is very old fashioned from outside, the kitchen and all the bathrooms needs some major updates, not to mention new carpet and paint before we move in and we are only approved for (insert what ever you are offering here) dollars and paying a full market value for a house where I have to spend money to update the house inside and outside is not going to be possible for me right now, however if you can approve the short sale - we are ready to close in 15 days."

When you are negotiating with banks, well anybody for that matter and you are saying NO - it is always a good business practice to offer a carrot with the stick. So if you look at the above script - I am telling them that I do understand that they are about to get a good whupping for giving me the big discount but then I also add sugar on my pill by telling them that I am ready to go and close in 15 days which means that the bank will gets its money, now, faster, then to wait months and then still get a smaller check.

Good negotiating is not about winning; it is about giving and receiving – they get what they want (a speedy closing) you get what you want (a huge fat discount on the mortgage); they have their numbers; you have your numbers – make your peace somewhere you are happy (remember it is your business – theirs is only a job) or move on to the next deal. Ralph has 3 more deals pending – if one of them does not goes his way I can assure you that he will not be sitting in a corner with his head in his hands wondering what he did wrong. He would what I would – count the money and equity I got already and move on to the next Short Sale deal.

Here is a bigger lesson from all this -there are lots of ways to buy foreclosures in Michigan – Short Sales in 2007 is perhaps one of the most profitable ones. Most real estate investors in Michigan are not involved in doing Short Sales right now because they don’t how to do them correctly.

Having this knowledge about how to find short sale deals, how to put together a complete short sale package, how to negotiate with banks successfully - in my opinion, gives you an extreme competitive advantage on all the other investors in your Michigan city who are chasing deals with equity. If you know how to do Short Sales then you can have what I call “Equity At Will” powers at your disposal. Quick Start 2007 is happening March 30, 31 and April 1 – attend and get the skills that Rodney, Dennis and Ralph got from me so you can also get $115,000 discounts that Rodney and Dennis got or a $65,000 that Ralph just got. Details about Quick Start 2007 are here.

Doug Benson, Ijlal Inner Circle member, sent me this video. It touched my heart.

From football to dancing to real estate tycoon – Emmitt Smith does it all - and does it very well.

My daughter Hailey, 4 years old, is obsessed with Dancing With The Stars, the hit ballroom dancing show on FOX where Emmitt Smith won the last season. Emmitt if you don’t know is the former Dallas Cowboys / Arizona Cardinals NFL superstar where for years he ran the ball in a stellar career.

Well Emmitt, according the latest issue of the Fortune magazine, got the real estate investing bug even when he was playing in NFL and now he has gone from doing real estate investing in residential homes to some truly big things in commercial real estate and development.

The article is extremely good and there are 3 BIG Emmitt size, life changing lessons for everybody and anybody who wants to buy and sell bank foreclosures in Michigan.

Here they are:

1. Emmitt Smith made a plan even when he was playing with Dallas Cowboys to get involved in real estate. He knew no matter how exciting the journey – one day it had to end and he did not wanted to wonder “What I am going to do now?” once his career in professional football was over. So he started learning about real estate investing way even when his football buddies were planning to blow their paychecks buying yet another expensive mansion.

What is the lesson here? If you live in Michigan and work in the automotive or information technology related job than I don’t have to tell you that tomorrow is uncertain for these industries.

What you do and how well you do in your job is no longer a guarantee that your job is going to be around in 2008. And if you doubt that well just go to Google and type in “Pfizer layoffs in Ann Arbor and Kalamazoo” and read the writing on the wall.

The Fortune 500 companies of the world – who were once known for job security are laying off people like this is a game of who gets to chop most heads and they have to win the tournament.

After laying off thousands of people, Wall Street is still not happy with Ford or Chrysler – they want more cuts and typically what Wall Street wants; Wall Street gets from corporate executives in any Fortune 500 company.

If you know that your job could be on the chopping block– then the time to learn new skills, get the knowledge to buy and sell bank foreclosures, build the Million Dollar Rolodex in Michigan real estate, start that business that you always wanted to do is NOW not once they have fired you.

If Emmitt Smith can juggle a high pressure NFL career, family obligations, travel that comes with being a NFL superstar and still learn about real estate – well so can anybody in Michigan. Excuses on how it could be done are easily made. Decisions to ignore these excuses and get things done are always in short supply.

2. Emmitt Smith asked Jerry Jones, the billionaire owner of Dallas Cowboys who made his fortune in real estate to let him “sit in his office and soak in what he was doing.”

Fortune says:

“Smith was pondering the endgame of his career while other young players were still discussing their next extravagant purchase. Cowboys owner Jerry Jones, who made his own fortune (estimated to be about $1 billion, give or take) in real estate, recalls

Smith approaching him early during the player's career with a unique request: Could he observe Jones "doing business" in order to see how a successful entrepreneur conducted himself?

"During breaks in practice he'd sit on a couch in my office and just watch me talk on the phone," Jones recalls. "He was soaking it all up and figuring out ways he could put what he heard to work." “

Can you even imagine how uncomfortable it would been for Emmitt initially to leave his comfort zone of being the star in the football field to sit in the corner of Jerry Jones office and just watch him do talk on the phone – half of the time having no idea what was going on?

What are the lessons here? One is that nobody is going bring you the knowledge you need to be successful to your home. You got to go out, find people who can teach what you want to do, ask for help, pay for it one way or another and then if you are lucky enough to get a mentor then try to get as much knowledge you can get, as fast as you can, from them.

A good mentor will shave off years of making mistakes from your life, can save you hundreds of thousands in dollars by stopping you from making expensive mistakes; can show you the shortcuts that took them years to find out and perfect.

Next lesson is this – the fastest easiest way to learn a foreign language is to go and actually live in that country. Your mind, once immersed in the local environment, will literally reformat the hard drive in your head and start taping the new language in your head. What will take you 10 years in a college could be done in literally months this way. You got to “immerse” yourself in what you want to do in your real estate business.

I am a big believer in the power of mastermind – you got to surround yourself with people who want to do deals, build a business, be somewhere in life in Michigan. We all have dozens of people in our lives who will tell us in an extremely convincing tone of life why nothing in life is going to work out. To find and surround people who will tell you how to get what you want is much harder and extremely needed. Success just does not happen by itself.

After all it is always easier to criticize someone then to help someone. Being a movie critic is easy – making a good movie much much harder.

Learn the business and find people in Michigan who are like you, who want what you want out of business and life, who want to make more money on their own terms, who want to go from employees to being an employer.

3. And finally here is the BIGGEST LESSON from Emmitt Smith:

Smith recalls another encounter with Jerry Jones in which he wrote down a list of all the goals he wanted the owner to help him achieve. He handed the list to Jones and asked him to check the ones he thought were doable. "He looked at the list and checked every one," Smith recalls. "He said, 'We'll get to some of these now, and some of these later, but we'll get to all of them.' I'll always appreciate that."

To get $2,000,000 in cash financing – you have to get that first $50,000; to get a network of REO realtors flooding your email Inbox with REO listings – you have to get one to do business with you; to learn how to sell houses no matter what the selling marketing in Michigan is – you got to sell one house. To learn how to package and sent out 10 short sale packages - you have to do one short sale first. To build a list of 500 other real estate investors in Michigan to whom you can wholesale flip houses to - you have to get 1to begin your list.

But you have to start somewhere. So many people just give up so early in the game that it almost seems like that they are relived that success did not come their way.

There are lots of things that can and will happen overnight in your Michigan real estate investing business if you take some action. There are lots of things that you will plant a seed today and then see the benefits some months down the road.

Planting always precedes harvest.

Got to do it. Got to do it now. Two years are going to go by anyway. 2007 will end. 2008 and then 2009 is going to come one day anyway whether you like it not. The world and the ones who make money and get what they want out of their business will go on with their business and doing deals - whether you join them or not.

Nothing in life – nothing in business – is unachievable if you want it bad enough.

I saw this really cool ad for Gatorade in this week Sports Illustrated Magazine – they have Peyton Manning of the Colts, raising his fist up in the air after the end of the Super Bowl – this is what the headline on top of Peyton said:

For some its “IF”; For others its “WHEN”. Play like there’s no tomorrow.

(me in front of a Birmingham, Michigan foreclosure)

Oakland Business Review recently did a story on foreclosures in Michigan and they thought I might have something to say about that. :o)

You can read the whole story right at Oakland Business Review site.

I wrote a sweet and short piece on Mark Ijlal’s Top 10 Rules To Eliminate All Fixer Upper and Contractor Headaches in Michigan Foreclosures; sometime ago which no surprise here that is one of the most read posts on Michigan Foreclosure Report.

Apparently 10 Rules are way too much reading for some folks because I get emails, on almost on a daily basis which begin like this: “ Mark I know you said not to do (blank) when fixing foreclosures in Michigan but ………..”

Frankly speaking 95% of new real estate investors invite all the headaches on their own heads when dealing with contractors. I don’t why it is when it comes to contractors even the smartest ones start to act like dopeheads?

The same guy who was walking around with a laptop full of spreadsheets ready to analyze any potential foreclosure deal in Michigan to its death cannot bring himself to ask a contractor to sign a 2 page agreement outlining what they are supposed to do once the rehab starts!

Why? Why? Why?

I cannot come up with even one good excuse for that.

I have members in my Inner Circle who have no absolutely no problems rehabbing more than one house at a time dealing with not one but 2-5 crews without breaking a sweat. Alan Boike, Rita Dalian, Rodney Townsend ... and I am probably forgetting at least a dozen more.

So what they are doing what other investors who buy and sell Michigan foreclosures are not doing?

During our monthly mastermind sessions some big things come up again and again regarding this topic.

Out of which three stands out all the time. Now I would still recommend you print out my previous post on that which is found here as a starting point but here are 3 dirty secrets that will give you high blood pressure if not followed all the time.

If you would like to avoid hair loss, high blood pressure and days filled with rage in your lives as related to contractors trolling around in your Michigan foreclosures doing God knows what then read on:

Dirty Secret #1: They are not your friends anymore as soon as they start fixing your foreclosure:

It does not matter how long you have known the guy “personally” – you have to ask for professional references. There is a difference in between hanging out with somebody, slugging some Buds and watching the game on his big screen plasma. When money is involved, check are being written, deadlines have to be meet – what football teams you both love are not in the picture anymore.

Almost 100% of conversations that are about to tell a sad tale of contractor woes start with – “ I have known the guy for….”

So???

So what if you have known the guy or gal for 10 years? What that has to do with how soon can he get the sidings up on your foreclosure in Oak Park?

You got to ask for references and you got to spend 20 minutes calling these people up and asking these questions:

”Mrs. Jones my name is Mark Ijlal and Brand Jones, owner of Brand New Paint out of Farmington Hills, gave you phone number as a reference. I am thinking about using Brandon to paint my house and wonder if you were happy with him the last time you used him? Did he finish your project on time? Did he go over budget or was everything done in the amount he told initially? Will you hire him again or recommend him to your friends or family?”

That is it – that one strategy will reduce 80% of all drama in your life. You will be surprised on what great excuses people will give you for NOT to give you any references. Run don’t walk away from them if they cannot give you any references.

Dirty Secret #2: Prenup Agreements Are Signed Before You Get Married:

Always use a written agreement that outlines what needs to be fixed, how long will take to fix it, the amount of money that will be needed to fix it etc – Paul Mueller and David Schmidt both Ijlal Inner Circle members made a great agreement that pretty much all of use now when dealing with contractors. Important thing is to give a bonus when they finish on time and whack them with a fine if they don’t. Don’t ever give out all the money (I cant even believe that I have to warn people about this) but rather break it down in 3 or 4 parts. That will reduce another 10% of your contractor drama.

Dirty Secret #3: Greed Is Good as Gordon Gekko Says But No When It Comes To Picking Contractors and Fixing Foreclosures:

Don’t always greed dictate your judgment. Just because somebody cannot give you 3 references and is shifty about signing an agreement with you but since he is also giving you a quote which his less than $5000 than the next guy – you decide to make an exception.

Don’t do it.

This is not a cafeteria where you get to pick and choose what you want to order or not. Either you follow everything or you don’t – but you cannot get results if you decide to do things that you like and skip the rest.

Breaking the rules; being a renegade; doing your own thing sounds sexy to everybody’s ears but I rather have more money in my bank account by following the rules.

Look if you like thrills – take up jumping from planes or tie a bungee around your ankle and jump or go to Cedar Point and ride the coasters up and down. At least you will have some fun doing it. Not following these 3 big rules and my 8-point checklist and then complaining about why the house is taking longer than anticipated to fix is not funny at all.

I will tell ya what I tell all my members all the time – if you are lonely and want a friend – get a dog. Don’t try to turn friends into contractors or contractors into friends – both strategies are a waste of time and money.

A lot of big time builders have reduced their commitment to build high-end subdivisions ($500,000 and up) in the tri-county area recently, which have flooded the market with lots and lots of good quality contractors. Look up Angies List in your area; ask other fellow investors in your Michigan City for referrals but STILL follow these rules.

No exceptions. Ever.

You will be a happy real estate investor in Michigan at the end of the day, with a long and prosperous life full of smiles.

You make your money when you buy. Ijlal Inner Circle member Glenn Carr just bought a foreclosure in Oxford, Michigan – which is a great little suburb in my very own Oakland county. Here are the pictures:

Here is the email that he wrote with the pictures:

Mark, Sorry I missed the meeting last night, but I have some good news to share. I've purchased a house in Oxford for 120K, and the house will need about 5-7K of work. The history on the house shows that the home was sold in 2004 for 202K and was refinanced in 2006 for 210K, lastly zillow estimate indicated that the house is worth 186K. So, we are please to know that we have between 65K to 80K in equity!!! As it's been stated many times before you make your money when you BUY, and this old adage still holds true. Take Care Glenn Carr

1. If you can get equity like this – it gives you lots of “wiggle room” to sell the house. I have said it over and over again that the difference between everybody selling houses in Michigan and the Michigan real estate investor who know what they are doing is one word – EQUITY. We have what almost 100% of all other homeowners in Michigan don’t have anymore – EQUITY.

Why EQUITY still makes the world go round? Because you can run some crazy promotions to sell your house fast; you can make “mistakes” doing your first deal and there is still money left; there are lot of money sources who are excited about giving you money despite what your credit report looks like; if you don’t want to do the whole deal then you can take a partner or wholesale flip the house – the list of options goes on and on.

But it all starts with what you buy and what price you buy the foreclosure at.

2. Despite whatever you have heard or think to be true – there is no shortage of foreclosures in Michigan – what has always been in short supply is actually people who do something with the ones that are available.

Case in point this house was available, in plain sight to anybody who was looking to buy one – but no body stepped forward, armed with the knowledge to make the deal without using any of their own money but Glenn.

3. This house is being bought and rehabbed without investing any of Glenn’s money. Despite what you have heard about hard money lenders in Michigan the game has changed and there are lots of new things happening in the OPM in Michigan. There are programs coming to the market even from mainstream players that are making seasoned investors jaw dropped. I mean gee where were these guys 5, 6 years ago when we are hustling to put houses on our credit cards.?

4. There is a term in commercial real estate that I like a lot – it is called Build To Suit – you might have seen that sign displayed on roadside lots etc where the owner of the land is perfectly willing to actually build you a building to your likings as long as you are able and willing to commit to a long term lease with them. The owner gets the security of getting a quality long term tenant. The buyer gets something that is just made for them.

The business of buying and selling bank foreclosures circa 2007 is really a Build To Suit business. Meaning that it is up to you what you want to do in the world of Michigan foreclosures. If you want to fix house like my Inner Circle members Alan Boike, Blaise Dietz and Rita Dalian like to do – well that could be arranged pretty easily. Tons of houses with rehab ranging from $15,000 to $40,000 even $1000,000 available in every city in Michigan.

But if you are new to the game and don’t want to do rehab – well you can go and find houses like the above one where your expense to make the house look spiffy is less than $7,000. Which by the way as a good rule of thumb for your first 3 deals unless you have previous experience you want to keep your rehab budget under $20,000 preferably under $10,000. But that is only true if the deal is a true killer. Otherwise look and look again – you can find houses like Glenn did that require paint, cleanup and cosmetic changes and you are good to go.

Build to Suit is a wonderful word and in February 2007 it is in full swing and available to those who want in Michigan real estate. Want to fix houses; don’t want to fix houses; it is ALL UP TO YOU to decide what you want to do, what you like doing and build a business in Michigan real estate around it. Glenn took some initiative - got a good deal. Could have been you...

My Schedule Update:
If you want to learn “where” to go in Michigan and “how to buy” these kind of deals without using your own money then check out the upcoming Quick Start 2007 Bootcamp on March 30, 31 and April 1 in Troy, Michigan. As usual small group (10-15 students) ; just me teaching; no outside speakers. You will have a blast. It is 100% risk free enrollment - details and a $100 Early Bird St.Patricks Day discount are here.