Take this for example

Wallace, 27, said he did not want to leave his fiancee and two children with a mortgage before shipping out to Iraq later this year.

“I still have student loans and I’m trying to be responsible. I don’t want to leave debt,” he said.

Wallace waited for the auction to roll around to Detroit’s Boston-Edison district, a once stately area that was home to boxing legend Joe Louis and Motown founder Berry Gordy.

But he was quickly outbid. An unidentified investor at the front of the room who had scooped up several dozen properties took the home Wallace wanted for about $15,000.

“Why am I competing against a bank?” he said later. “It would be common sense to have a separate process for people who want to move back to the city or it’s going to stay empty.”

As an investor, note

1. there are people who want to live in the city
2. you can’t just buy and hold and SIT in the real estate market in Detroit, You have to buy with a plan. Otherwise, you don’t have an investment, you have a liability.

Read the rest of the article here.

Heritage properties suffered from a bum rap in the past. People have been reluctant to purchase a piece of the past due primarily to expense of dragging it into the present. Lately, however, these older properties have been recognized for their historical value and  beauty and have even become a hot commodity. Yes, there is often work to be done on historical properties, but you actually have some financial incentives for restoring these properties to their former glory.

First, restorations create jobs. Second, the finished product is culturally significant, making it a draw for tourism and improving the quality of a neighborhood over all.

Third, there are tax credits involved on a local and federal level.

Historic districts in the city of Detroit that are viable for real estate investing–because they or going through a resurgence : Boston-Edison, Virginia Park, Brush St. (Wayne State University district), Indian Village, and Palmer Park.

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“.

• Real estate agent
• Real estate attorney
• Mortgage broker
• Accountant
• Title company
• Home inspector
• Contractor

Now, with a solid team in place, you take on the role of manager and major decision maker and can create an efficient system that minimizes risk while maximizing profit.

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.