At the federal level, you can apply for a Federal Rehabilitation Tax Credit of up to 20 per cent of a restoration. If your property has not been certified, you can apply to have it certified or take advantage of the 10 percent credit for non-historic, non-residential buildings put in service before 1936. These credits have been used to revitalize buildings that were seriously dilapidated. They can be applied to all kinds of work on the building including, “architectural and engineering fees, site survey fees, legal expenses, development fees, and other construction-related costs”.

At the state level, tax credits are offered through the Michigan State Historic Tax Credit. The State-only tax incentives are targeted at those resources that by virtue of their designation, end use, or the limited nature of the rehabilitation investment do not qualify for the federal credits. To be eligible for State-only credits a project must meet one of the following criteria:

• The resource is located in a locally designated historic district.
• The resource is listed individually, or is part of a historic district listed in the State Register of Historic Sites or the National Register of Historic Places and is in a unit of government with a population of less than 5,000 people.
• The resource is listed individually, or is part of a historic district listed in the State Register of Historic Sites or the National Register of Historic Places and is located in a chartered summer resort and assembly association.
• The resource is listed individually, or is part of a historic district listed in the State Register of Historic Sites or the National Register of Historic Places and is subject to a historic preservation easement.

State-only credits are non-competitive and non-caped and are equal to 25% of the projects qualified expenditures.

Some historic districts in the city of Detroit that are viable or are undergoing a renaissance include: Boston-Edison, Virginia Park, Brush St. (Wayne State University district), Indian Village, and Palmer Park.

For starters, you don’t have to move right away. And if you work out a payment arrangement with your lender, there’s still a chance you can stay in your home.

Helpful information for those in trouble. Good information for the real estate investor. Know the process and what you’re getting into. In general, in the Detroit area,

• the owner can miss up to 3 mortgage payments before action is taken
• there is still time to redeem the house up to the sheriff’s sale
• even after the sheriff’s sale, the 6 month redemption period allows one to buy back their home

Read more in the article “Foreclosure doesn’t automatically mean eviction“.

Assembling a Team of Experts and Advisors
You may like doing things yourself. You get them done, you get them done right. And, when buying property, others you get involved may become rivals and pick up on your hard-earned secrets and tips.

However, going it alone in this business is a good way to go broke soon, or at least limit your potential profit. I always look to cultivate relationships with  specialists knowledgeable in various areas.

This works well for me for a couple of reasons.

First, they provide expert guidance whether I am negotiating over consessions, looking for a property manager, acquiring particular financing, or even researching a particular community.

Secondly, they help me avoiding common pitfalls. Why should I reinvent the wheel? Trust others who have gone before me.

Third, I get SO much more done when the workload is shared. If I have delegated jobs to others–other who are better equipped to handle it–I have just freed up my time for finding the most profitable opportunities.

Get people in on your act. Investing in foreclosures is a specialty, full of nuances that don’t exist in other real estate markets. Collect your team of specialists to help you build your business.

In Detroit and Southern California, foreclosure opportunists are going after cheap homes in downtrodden neighborhoods, which are selling in the five-figure range.

But there are plenty of million dollar-plus homes out there, in good neighborhoods, which have fallen into foreclosure as the result of shoddy lending practices, speculative buyers and homeowners walking away from a negative equity situation.

Interesting article.  I like the general theme about the opportunities. I can’t say I agree with some of the opinions like the motivation of banks and of agents. What do you think?