Serious Business Can Also Be Serious Fun!

I must admit that 2008 was a very exciting and fast-paced year! I finished this year off with a BANG!, literally! I just completed my concealed pistol license (CPL) class today so that I could apply for my permit to carry a handgun for personal protection when performing my activities as a real estate investor. Several other investors have told me that it’s not only a good idea, but it’s essential to have personal protection when entering vacant properties to inspect them as potential purchases. It hasn’t happened to me, yet, but several others have told me their personal stories of uncomfortable and potentially dangerous encounters with squatters and others found inside the property who should not be there.

So, not only did I want to protect myself if necessary, I also wanted to obey the laws and legally protect my right to keep and bear arms so that I could also protect and defend my family at all times. It’s increasingly necessary in these times of uncertainty. Many people who are out of work or in other ways have fallen on hard times can become desperate and do desperate things. I don’t want my family to be confronted with such a situation. I want to be prepared.

I consider a CPL simply a necessary tool needed by the real estate investor just like a digital camera and a notepad. It’s part of your “utility belt.”

Here is the picture of my range target at the end of the training session.


It might be difficult to tell by the picture, but I put 30 rounds of ammunition at dead center from about 15- to 20-feet. It sounds easy to anyone who hasn’t fired a handgun, but judging from what I saw others doing at the range (many who claim to be regular shooters!) it’s not as easy as it sounds. Accuracy isn’t by accident -- you have to follow the fundamentals if you want accurate results (a tight shot group).

I recommend everyone interested in learning more about the right to keep and bear arms and learn about what it takes to properly (legally) protect yourself and your family to contact Cedric (Rick) Ector, a certified NRA instructor, and take his class. Even if you don’t plan to move forward today and get your permit, at least take the class for the information and the experience of shooting at the range in a safe and professional setting. I can’t recommend it enough!

Here is my certificate:

Thanks Rick! I look forward to further training opportunities with you in the future!

Wow! Has it been a month since I have posted anything to my blog? Unbelievable how time flies!

What have I been doing? What has kept me so busy? Well, I’ll tell you … I have been working very hard with a new contractor to finish up where the other guy left off - abruptly. In other words, I had to let one contractor go because he just would not perform. I got another gentleman that I know and trust to come in and “clean up” after the other guy. That is never any fun for anyone, but it had to be done and Alan Boike did an excellent job for me - thanks Alan!

Also, I have been advancing my education by pursuing my master’s in business administration (MBA) through Davenport University. I’m at the half way point and expect to finish in early Spring, 2010. So, I expect another very challenging year in 2009, but I am up for it!

I have successfully placed a tenant in my Rosedale Park property in Detroit. They are very excited to move in and start enjoying the beautiful, historic home. Before they do move in next week, I am working with the city of Detroit to get the water properly turned on - finally. The main shutoff valve at the street appears to be broken and we have extremely low water pressure in the house. So, I need to get that corrected this week - no excuses! - so that they can move in with no problems.

I am still searching for a tenant for my property in Mt. Clemens on 125 Grand Ave. Apparently people do not want to pay $875 for a 3-bdrm, ranch home with a HUGE country-style kitchen that has a cathedral ceiling and a huge, clean basement complete with a 2nd bathroom - not to mention all brand new appliances. Well, I will just have to keep marketing till I attract the right applicant.

What are my next steps? Well, I have to wait till I have at least six month’s “seasoning of title” before I can seek a cash-out refinance on both properties I am currently working on. In layman’s terms, I need to show that I have owned the properties for at least six months before most (or any) banks will consider extending a mortgage. So, once February 2009 rolls around (less than 90 days from now, can you believe it?!) I will be able to seek a 30-yr. fixed-rate loan on both properties (125 Grand Ave. in Mt. Clemens and 14866 Faust Ave. in Detroit) and cash out in order to pay off my business lines of credit that were used to acquire and renovate the properties as well as pay for all the holding costs. Once I do this cash-out refinance, I will be positioned to purchase again in early Spring 2009.

However -- this is where it gets truly exciting. I can only have a maximum of four mortgages and my primary residence counts as one. So, I can only carry three investment properties on a 30-yr. fixed rate mortgage. And, since my business lines of credit are limited, I will have to start looking to private sources for funding future investments.

So --- if you are reading this and are interested in investing in real estate for better returns than you’re getting now in the stock market, or if you know someone who would be interested, please let me know. I’m really excited about the opportunity to share with others what I am doing and together we can benefit from this real estate market while others are running for the boarder!

What A Difference A Day Makes!

It is so good to have your rehab project in the hands of a skilled and knowledgeable contractor! I loathe having to replace a contractor for low quality or for failure to perform, but sometimes you just have no choice. No matter how good you do your homework (due diligence) you can still get burned and you need to be prepared to respond quickly when that happens to you and salvage your deal.

That's the case for my project on Grand Avenue in Mount Clemens. After taking sufficient time to walk through the property with Allan and specifying exactly what needed to be done to get the property to the level needed to satisfy the city inspectors, we discussed the entire scope of work, timing, price, and signed a contract and got to work. Things are already starting to take shape and I expect all the major items (Heating Ventilation and Cooling (HVAC), Electrical, Plumbing, and attic insulation) to be completed by the end of the week and then a laundry list of other items (let's call it final trim work) will be completed by the end of next week.

I expect this home will be quite nice when Allan gets through with it. He's done many properties for himself and he's a very conscientious person. I have no doubt that my next tenant will be very pleased with the results and very comfortable for some time to come.

Lessons Learned - Top Three Warning Signs Your Contractor Isn't Performing

I have experienced a delay in my rehab project for my property in Mt. Clemens. I have been stacking up tenant applicants and missing out on opportunities to generate cash flow because of the delay. But, this is what happens when you mess up like I did. Don't worry though, I have dismissed my contractor and have hired someone I trust to get things done properly and quickly. I'll be back on track in a couple weeks.

But what did I do wrong? I paid my contractor too much money before completing an appropriate amount of work. That’s right! I did everything else right, but paying too much money before enough work is completed is the “kiss of death” to any rehab project. Even though I used this contractor in the past and I knew what to expect, and even though we had a very detailed scope of work written out, and even though I had an iron-clad contract signed, I still guaranteed failure by paying too much, too early.

What are the top three warning signs your contractor is going to be a problem? Here is what I have observed over time:

The first sign of trouble that your contractor is going to be a problem is that he or she starts letting your phone calls go to voice mail. Now, don’t be paranoid here. Just be in tuned for a significant change in the pattern of communication. If you normally get right through to your contractor over the phone and discuss the plans for the day or for the following day and all of a sudden you start getting voice mail and it takes a couple of attempts before you receive a call back, that’s something to be concerned about. The first time it happens may be nothing - we all get busy. But if you start to get that “feeling” that you’re being avoided, something may be wrong.

The next thing you want to watch out for is a sudden change in scheduled hours. If your contractor is usually on site at 8-am and stays hard at work till around 4-pm on a daily basis, but suddenly seems not to be on site till around 10- or 11-am, you should ask questions. Also, you should be inspecting the work on a daily basis to check their progress. Until you develop a strong relationship with a contractor and really can trust them to do what they say they’re going to do, you must inspect their work regularly. This will help you detect warning signs early.

Finally, when you start noticing delays in your project due to “unexpected” problems, you need to be concerned with the capability of your contractor. Sure, you may encounter the occasional “surprise” during the rehab, but I have learned that there is nothing that cannot be corrected pretty quickly. Any more than a day or two delay for anything except for maybe the most serious things like structural problems not identified during the initial inspection should have you seriously concerned with your contractor’s ability to complete the job.

So there you have it. My “lessons learned” as I continue down the path of real estate investing in south-east Michigan. Hopefully you will not make these mistakes if you are starting out. Learn from those of us who have learned the hard way.

I’m enjoying the process. I’m looking forward to continued successes. I’m excited about the ongoing opportunities to invest here in Michigan. It’s a tremendous opportunity outside of the typical IRA, 401(k), KEOGH, or other investment vehicles. After all, I have lost over 46% of the value in my 401(k) I have at work. I will not rely on that alone for my future retirement years.

If you have pulled your money out of the stock market or mutual funds and are interested in putting it somewhere more secure over the next 2-5 years, send me a note. I would like to talk with you about how you can partner up with me and make a positive and almost guaranteed return on your investment!

The Sky Is NOT Falling!

With all the hoopla about the economy, environment, politics and global unrest in general, it might be easy to get depressed. In fact, recent talks about GM considering a merger with Chrysler resulting in a number of plant closings and over 30,000 jobs lost – one might conclude that Armageddon and the end of the world must be just around the corner.

In fact, many people are pulling their money out of stocks, money markets, and even banks and putting their cash under their mattresses. Not a good idea! In fact, if you’re in the stock market and the value of your account seems to be down about 40% you should probably be doing two things. First, leave your money where it is!! It will come back. The number of shares you purchased is still the same and when the market rebounds, your balance will increase. Second, now is the time to be buying more shares and adding to your portfolio. Look at Warren Buffett, for example.

My friend Dennis, however, has been completely out of the stock market for the past three years. He cannot stomach the roller-coaster ride of the market. Can’t say that I blame him! He’s doing something else. And that’s OK! We all have our own approach to things in life. Be a leader, not a follower. Make your own rules rather than follow everyone else’s.

What is Dennis doing? He’s doing what many of us have chosen to do – invest in real estate! That’s right. Many of us have decided to put our money into something we can see and touch. Something we can analyze in terms we can understand. Everyone needs to live somewhere. Many people like the benefits of home ownership without the long-term commitment to a mortgage. So, these people are perfect candidates to rent a house.

I have been buying houses, fixing them up, and putting renters in them while I hold on and let the housing market recover. My tenants get the benefits of home ownership while I get the benefits of increasing home value (in terms of equity as the mortgage is paid down), tax deductions from my income (interest on the mortgage is tax deductible as well as all the maintenance costs, etc.), monthly income from rents that exceed all my expenses, … you get the idea. Ten years or more down the road, I will be sitting on tons of equity in the properties.

The problem all of us investors run into is the issue of money. There just is not enough of our own personal money to go around and buy up all the properties that are out there. Additionally, there is a limit to how many mortgages (currently it’s 4) any one person can have in their own name. So, the next level investors turn to is private money sources. There are some people out there who choose to invest their money in real estate rather than stocks but they have neither the time or desire to find, buy, fix, and manage properties for themselves. So what do they do? ……

These investors with money and no time or no desire to do the nitty-gritty, use people like me to help them with their investment goals. They basically serve as the bank and fund the investments with their own money while holding a first lien position. This is about as secure an investment there is!

If this sounds like something you would like to be involved in, contact me! I would love to work with you. The opportunities right now are almost unlimited!

The point is this. The sky is not falling. For some, times may seem unbearable difficult. But that is only because this change in circumstances has caught them unprepared! Don’t let this happen to you. Keep learning new skills, keep improving on your communication skills, keep building your network of friends and professional contacts. You never know when you will find yourself making a change. Be prepared. That is the lesson to be learned from today’s newspaper headlines.

Do not be afraid, just be prepared.

A Very Sad Day ...

Saturday, September 20, 2008 was a very, very difficult day for me. I had to make the unfortunate, but correct, choice to surrender my dog, Adam, my cherished companion for the past seven years, to another family in order to ease my daughter’s chronic allergy symptoms. It turns out my daughter has a severe allergic reaction to peanuts, tree nuts, eggs, cats … and yes, her own dog, Adam!

I circulated posters for four days and then I had to pull them down because I received a tremendous outpouring of support from so many people. It was tough to decide who to award custody of my friend but I had to make a decision. Finally, I made my selection. I selected a husband and wife who lived way out in the countryside. They had a 9-year old beagle named Lucy who had just recently lost two companions herself - Snoopy (13) and Cuddles (15). Lucy was home alone all day and seemed very lonely. This, so I thought, ought to be the perfect fit!

A few short hours after a very emotional hand off, I received a call that Adam was really much bigger than they had realized and that it really wouldn’t be the best fit. I had to go back and get Adam and start the drama all over again!

Fortunately, I had a waiting list of caring dog lovers standing in line just waiting for the opportunity to take Adam. I contacted Jennifer and I brought Adam to her and her daughter, Claire.

Claire and Adam hit it off like you wouldn’t believe. The neighborhood is filled with a bunch of other labs and I just knew Adam had found the perfect retirement home. Not only would he be walked every day and get a huge, fenced yard to run in, but he also inherited a summer cottage on Lake Erie that he would be able to roam and swim … I’m a bit jealous!

So, tonight is my first night without my companion. I do hope he is adjusting well to his new home. I’m sure he is -- after all, he is the PERFECT DOG!

Many thanks go out to all of you who circulated flyers and spread the word that Adam needed a new home. This has certainly been a wonderful demonstration of a community filled with caring folks showing love and support to people and pets alike.

Adam will be sorely missed but never forgotten!

Back From California Vacation - Ready To Work!

I am back from a ten day trip to California for a family reunion - both my wife's side and my own. My wife has a lot more family than I, but it was a very, very good time to visit those I haven't seen in thirty years and those whom I have never met. It was a great time of food, family, and fun!

Although it's great to take some time away from the grind of work, work, work ... there is something exciting about returning from that time of refreshing and getting back to the work that brings fulfillment. For me, that is real estate investing!

There are many challenges that I face as a new investor. Some are expected and you work to overcome them. They are the obvious things like negotiating with the bank for the greatest price discounts so that your numbers "work", getting bids from a variety of new contractor sources until establishing your "inner circle" of trusted vendors and contractors, networking with like-minded investors to build relationships and potential business deals, etc. But these are the known and expected challenges that we face as investors with every business transaction. I'm talking about unexpected challenges like the two I have faced recently. For example, as you know from my previous posts, I am working for the most economical solution for the repair and maintenance of the steel windows in my project in historic Rosedale Park - a beautiful neighborhood located in the north-west portion of the city of Detroit. I made the mistake of purchasing this home without knowing that the area had been designated historic just three years before. Shame on me! But I will overcome the challenge and move on.

Another challenge has popped up today. My project in Mt. Clemens is coming along just grand! (pun - it's located at 125 Grand Ave. in Mt. Clemens) The exterior work is almost complete (a few minor details remain) and now the interior work is well underway. The rough plumbing is being done but the water department didn't want to turn on the water until the supply line was pressure tested. Sure enough - it failed the test indicating that there is a likely break in the supply line under ground between the street and the meter in the basement.

CAN'T I CATCH A BREAK?!

Fortunately, this is likely the only "surprise" I am to encounter as this is mostly a straight forward rehab. I am waiting to hear from the plumber what the proposed cost will be to dig up the line and replace it. I have some room in my budget for contingencies, but not a huge amount. I'll wait for the quote before making any decisions on what adjustments to make elsewhere.

With regard to the above question - can't I catch a break? - the answer came just today a few hours later. My current (and only) tenant called me today to ask if I had anything available for a friend who needs a place to rent. It's quite possible I may have a renter for this property well before I have it renovated and ready for occupancy. That would be awesome if it can work out. I look forward to talking with this person to see what their need is. I'll do my best to help.

So may vacation is over and, in two short days I am back into the thick of things right up to my neck - just the way I like it! (Feel the rush?)

Things Are Warming Up!

I am under a time crunch! I have to finish up ten homework problems for one of my MBA classes that are due Saturday night, I have requests at work piling up that MUST be satisfied tomorrow afternoon no later than 3-pm, I have to show Faust Ave. to a very interested and serious buyer, I need to arrange to have someone open Faust on Saturday to receive the dryer (that's another story!) and, oh, did I mention I'm leaving Sunday morning for a 10-day vacation to Los Angeles? I'm feeling the crunch now!

Things have been moving along nicely. Faust is now finished according to the original agreement. There are a couple of final items that I have requested as part of a change order that will be completed next week while I'm away on vacation. When I return, the lock-box and security codes will be changed and I will be officially complete with all rehab (almost). I'm still debating on what to do about the windows. With this current potential buyer who is courting me, I just may give a concession for the windows and sell as-is.

I'll post my progress (and pictures or video) after I return from vacation.

Have a great Labor Day weekend everyone!

If You Could Only See Me Now!

Awesome! That's all I can say about this project. Other than a few minor details to be finished in the next couple of days, Faust Ave. is now ready to go! The finished product is beautiful. I need to take some pictures and do a walk-thru video soon and get them online.

The appliances will be delivered tomorrow and installed and then I can start proudly showing this property to prospective buyers and get this property "SOLD" before Fall settles in on us.

Where Does The Time Go?

It's been too long since my last blog update - what happens to the time? What have I been doing? Well, here's the short list:

- Almost finished with rehab at my investment property on Faust Ave in Detroit.
- Started using social networking tool, Twitter - Do you twit?
- I have secured a closing date for investment property in Mt. Clemens.

So what's happening on Faust? At my last post I had just discovered that I had purchased a property in a historic district and that I couldn't put in vinyl replacement windows. So I am investigating my options and, so far, I don't like any of them! I have a quote to refinish/repair the existing windows -- $25,000!! A quote to install Pella wood frame windows -- $20,000! Each option destroys any profit margin I would have expected to have in this property.

I'm meeting with someone on Monday to give me another bid on replacement of "like-kind" windows at a more reasonable price. I would expect to pay up to $10K, but any more than that will really start to hurt. We'll see how this works out.

As far as marketing the house on Faust, I have a sign out front. This sign has been generating at least one and as many as three calls per day. Unfortunately, every call so far has been from someone who needs to rent, not buy. Worse than having no credit, they all have had bad credit - foreclosure, bankruptcy, behind on bills, etc. This is a reflection of two problems in Michigan at this time: unemployment or under-employment. Many people have either lost their jobs due to downsizing by the automotive companies (OEMs and suppliers, both) or, they simply have not improved their income earning through job promotions. Many people get into an entry level job and never move up from there. That makes it very difficult for them to purchase a home.

I just recently started using a social networking tool called Twitter. This is a way of keeping in touch with your circle of friends and business contacts with short little updates about what you're doing, how you're feeling, etc. It's a great way to keep that network fresh and engaged. It's also a great way to meet new people who would be potential friends or business partners. If you are not twitting, you need to check it out!

I'm finally scheduled to close on my investment property in Mt. Clemens. This one should be a breeze and a simple flip or rental. I am so tempted to keep it as a rental, but I really need to just flip right now. I need to pay off my business lines of credit and start building some cash reserves. So, I need to stay focused. I know I should have more cash flow properties in my inventory, but it's too early for that. I need a handful of flips behind me to get that real momentum I have been desiring. Also, I'm not sure I want a bunch of separate single-family homes as rentals. There is more maintenance and more risk due to vacancy loss. When you have a single renter in a single-family home (say, a 3-bedroom, ranch with one family) then you only have one rent check coming in. If your tenant experiences a problem and stops paying rent, you still have to pay the mortgage. It's equivalent to a 100% vacancy situation. At least if you have a duplex fully rented, you have two rent checks coming in. Perhaps one tenant's rent covers the expenses and the second tenant is bringing in the positive cash flow. A four-unit building is even better. Did you know that you can have up to four families in four separate units of one building and it is still called a single-family residence? That's just the rules of the trade. It's the definition of a single-family house.

Where the real wealth resides is in commercial residential real estate. That would be five units or more under a single roof. I would like to get a 12-16 unit building for my first commercial property and I hope to do it in the year 2010. My first goal is to flip a few between now and then to have enough cash built up for the down payment. I could use my business lines of credit now, but then I'd have to make interest payments while also paying the mortgage. I'm sure I could cash flow enough to make all payments, but then I wouldn't have the business lines free to do other deals until I could refinance the apartment building to pull out enough to pay back the down payment.

So the plan is set. Let's move forward with a few more flips, build capital, and then look for the commercial building for positive monthly cash flow. Flip for capital, commercial real estate for residual, passive income. THAT, ladies and gentleman, is the formula for success in Michigan residential real estate.

Are you following me? This is an awesome adventure! If you'd like to learn more about what I'm doing and how I got to this point, please leave a comment and contact me. I'd love to talk with you about it.

You may be thinking, "Gee ... he's light-years ahead of me! I'll never get to where he is now." Don't think that way at all! I know people who are multiples of light years ahead of me -- I know them personally. I use their success as motivation to keep me going. I would like to be that person for you, too. Let's talk! Let's do business together!

Interesting developments in the past two days.

Happy 4th Of July, by the way! This is the celebration of our independence -- for me, I might as well be celebrating independence from my money! Read on and discover why ...

Yes, it's official -- Faust Avenue is now part of a HISTORICAL DISTRICT and now I have to be careful with the exterior renovations. Specifically, I have to be careful with the kind of windows I put in -- I can't get away with an economical vinyl replacement. Will (my General) is going to investigate further for me and negotiate with the appropriate agency to minimize the expense needed to maintain the demands of the historical society. This could get very interesting. That's right, Rosedale Park has officially been designated a historical district just about the time I closed on the property.

OK - I like to make mistakes - no, really -- I do! I learn so much from them!! [sarcasm] Believe me, I'm not buying homes for the sole purpose of providing a humanitarian service to the local community, restoring and beautifying the neighborhood while profits are being made by everyone involved in the transaction -- except me! I do gain satisfaction knowing that I’m helping to revitalize a community; that’s a great result of my investing. But, as a firm believer in capitalism, I believe the sole purpose of owning a business is to MAXIMIZE PROFITS for the shareholders. All the other positive things that come as a result are just added bonuses. By the way, my wife and I are the only current shareholders of my business and I’m not the only shareholder unhappy about this latest development.

Sigh .....

OK, it's not over till it's over! The pity-party-express has left the station and I'm NOT on that train! So, on a positive note, since this is now officially an historic district, perhaps I can market this property as a beautifully restored historic home and perhaps it will hold more value than if it were not in an historic district. The property value certainly could not have declined further once the subdivision was designated an historic district. Also, I'm sure there are creative ways to meet the society's requirements in an economical manner. Time to put on the thinking cap and get creative. Alright class, Problem Solving 101 is now in session and I don't think I have enjoyed the first lecture! Oh well ...

The fun and adventure continues ......

Faust Avenue Is Now Underway!

Today was the closing on Faust Ave. When I walked into the title company, I was greeted with a smile and a handshake and then I got that “feeling” … you know, déjà vu! I recognized the face and then I asked, “You look familiar, have we met before?” Then suddenly I realized that Leo had done the closing for the purchase of my last project, Curie Court! It’s a small world. I bet Tri-County Title Agency handles a lot of these REO closings.

It was just Leo and me in the conference room. I left the lockbox from Faust with Leo who promised he would drop it off with my Realtor, Jay, when he drops off some other paperwork later in the week. It was so fast and so convenient I could hardly believe it. Leo even records the deed at the county for me as a courtesy! My first closing on my first project two years ago took about an hour - painstakingly going through every line of every document, yawn ...

My second closing was about 30 minutes, with half of the time spent chatting and joking with Ray Reck (the broker) and Leo, himself. There really aren't that many forms when buying an REO property.

Of course, this was my third purchase so it’s becoming old hat now! Leo and I breezed through the signatures, made copies, and I was on my way in about 20 minutes!

I didn’t waste a minute moving forward on this project. Will started the work the same day of closing and the landscaper has already done his part, too -- except for the retaining wall in the front yard. I’m holding that part off till the roof is complete, which, hopefully, will be done by the end of this week and then Jeremy can finish the retaining wall next Monday, July 7. That's the same day, by the way, that I'm going to set my For Sale sign on the front lawn and start my marketing campaign to attract buyers.

This project is expected to take 6 weeks (more or less) with a contractual agreement to a “drop dead” completion of Saturday, August 16 as a grace period to handle any contingencies that may pop up.

It is my hope to have a buyer locked in a purchase agreement by the end of August or mid-September at the latest. (Just like I did with Curie Court!)

Let’s watch and see if I can have a repeat performance with a slightly better return on investment. This property qualifies almost as a “junker” according to Mark Ijlal because of the amount of water damage to the property and the amount of mechanical repairs and upgrades being put in. There are too many properties on the market, Mark contends, that need only carpet and paint - why waste time and effort with any rehab project more than $20,000? Well, if the profit margin is acceptable to me and since I'm not actually picking up a paint brush or a hammer, then I’m comfortable with doing things differently. If I find a good property during my searches that needs only carpet and paint, then maybe I'll do that one. But I'm not going to spend all my time hunting for the perfect Easter Egg before I make a purchase decision and start moving forward. Different approaches for different investors.

Stay tuned ...

My Investment Criteria

Have you ever thought about what makes a good investment? Do you have any idea what kind of property you should buy if you wanted to invest in real estate? If someone offered you a 3-bdrm., brick ranch with 1,100 sq. ft. of living space for $139,000 how would you know if it was a good investment? Is that a good price? Too high? Too low?

The best time to think about these things is before the opportunity presents itself to you. So, if you're thinking of getting into real estate investing, you really have to study the neighborhoods in which you plan to invest and you need to know what the houses are selling for right now -- not what they sold for 8 months ago.

Many investors have their own personal criteria for investment purposes. There are different criteria for rentals and different criteria for flips. I have outlined my criteria for flips (see below), but these aren't etched in stone. I can be flexible on some issues while rigid on others. But it's very important to have a starting point so that if you're going to use a Realtor to find houses for you, they know what you're looking for.


Here is my list ...

After Repair Value (ARV) = $100K - $180K (based on recent (90-120 days) comps.)
Located INSIDE subdivision (no major roads)
Basement (no slabs or crawls)
Garage
Brick Exterior
Ranch, Colonial, or Cape Cod
3-4 Bedrooms
1-1/2 Baths

Areas of interest:

As far west as I-275
As far east as Jefferson
As far as 4 miles north of I-696
As far as 4 miles south of 8 Mile Rd

Also interested in the following specific areas:

Clinton Township
Mt. Clemens
St. Clair Shores
Fraser
Roseville
Warren
Center Line
Sterling Heights
Oak Park
Rosedale Park (Detroit)

NOTE: I live in northern Clinton Twp. (M-59 and Romeo Plank) but I work in Novi (8 Mile and I-275) Therefore, I have a wide range of possibilities for investment because I drive past such a wide range of cities.

If you happen to find something that fits these criteria and you don't have an interest in investing in it for yourself, please let me know about it. If it seems like a good deal and I purchase it, I'll gladly give you a "finder's fee!"

Curie Court Deal Review

The following three video clips show me discussing my overview of Curie Court while attending a monthly meeting with fellow real estate investors. I am a member of Mark Ijlal's Inner Circle group and we discuss all aspects of real estate investing on a monthly basis. This was my first opportunity to share with the group my experience with my first successful real estate flip.

Enjoy!


Inner Circle June 2008 David Deal 1 from Mark Ijlal on Vimeo.

Inner Circle June 2008 David Deal 2 from Mark Ijlal on Vimeo.

Inner Circle June 2008 David Deal 3 from Mark Ijlal on Vimeo.



The following graphic is referenced during the presentation and may help in following the analysis: (click on it to enlarge.)


.

Find Out What The Top Two Reasons Are That Make Property Inspections Absolutely Necessary!

It’s been a week now since the bank has accepted my offer to purchase Faust. Since that time, I have been able to talk with my contractor and continue negotiating the scope of work to ensure that I only perform what is absolutely needed to make the property clean, comfortable, and in move-in condition. I have been accused of having the tendency to overdo my renovations while others would stop short of what I like to do by about 25%. However, after reading several books by or about Donald Trump, I believe the key is to over deliver and under charge. This gives your client the WOW factor that makes it impossible for them to pass up on your product or service. And it will bring you endless dividends through the positive word-of-mouth advertising you will receive when treating people fairly.

HINT: (Side note) All of you contractors and other service providers out there beware! This practice of over delivering and under charging not only works for me selling real estate, it works for your business as well. How many of you feel like you are getting the best service for your dollar when you go to the store? Everything is self-serve. You can even do your own check-out at many stores now. You’ve seen them: “You Scan” check out lanes for those of us who just don’t want to smile at the cashier and say nice things that you don’t really mean. I was SHOCKED the other day when I went to fuel up and get a car wash. As I jumped down from my awesome, full size, 2005, 4x4 Dodge Durango SUV (I love that truck!) I was greeted by a smile and a handshake by the pump attendant. That’s right, you read that correctly -- PUMP ATTENDANT! He informed me that this was a FULL SERVICE station and that he’d be happy to pump it for me. “Regular or Premium?” he asked me. I could hardly believe it! I gladly handed him my debit card and said, “Fill ‘er up, regular! … And thank you, sir!”

I felt like a VIP! And that’s how your clients and customers will feel, too, when you over deliver and under charge. You will not only continue to make money, you will build lasting business relationships. Then there’s the word-of-mouth advertising that you will get as a result of your superior service. High quality, specialized service at an affordable price will guarantee that your customers will brag about you to the whole world. Think of it this way. If you go somewhere and get lousy service, don’t you want to warn everyone to stay away from “that guy” or “that place”? Why do you do it? Because you hate the person who treated you badly? Yes, but more importantly, you care about your family and friends and you don’t want them to make the same mistake you made.

On the other hand, if you go somewhere and get the royal treatment don’t you want to tell your family and friends about that experience too? Why? Because you are now in love with the pump attendant that filled up your SUV for you? Not really, but because you care about your family and friends and you want them to get a great deal, too. But there is a better explanation that is more self-serving that I think goes to our very core as people. We all want to be liked and admired. We also want to feel like we have specialized knowledge and can add value to our friends and family. That is why we tell them about that “special place” that we have found, or that “special inspector” who goes above and beyond and is so detailed in their inspection reports (like John McAuliffe) resulting in better discounts from the bank. That is why we tell others about this awesome contractor (Will Curry) who acts as a trusted advisor and who provides honest and reasonable prices to investor clients realizing the value of win-win contracts. Or that real estate agent (Jay Alasphemy) who negotiates for you with the bank to get the best investor’s price possible and handles all aspects of the purchase process so that things run smoothly and on schedule.

I can go on and on, but you get the idea. Treat others in business as you want them to treat you and you will make good, lasting business relationships. And when you do find those special people, share them with others and everyone will benefit greatly.

Now … back to my story….

Even if you are a seasoned investor and you know everything there is to know about property -- even if you are a builder -- you should NOT pass up the opportunity to have a qualified inspector inspect your investment property. There are two reasons for this that may not be obvious at first.

The first reason is that you may be too close to the deal to be objective. You are emotionally tied up and invested in the deal and you will try to make it work any way possible. That is why you want John to inspect your property. It’s his job to convince you NOT to buy this property. If you decide to buy it anyway, at least you are aware of every potential problem you may encounter when trying to restore the property.

The second reason is the least obvious of all, but the most important. You need John’s report as LEVERAGE when negotiating the final purchase price of the house you are considering. The more you can identify that is wrong with this property the better off you are when negotiating your purchase price. You can either ask for more money off the price or you can ask the bank to do a number of the repairs before you buy the property. Either scenario will work for you and will save you thousands of dollars in the end. Don’t overlook the benefit of a good, quality home inspection. (Call John!)

That’s what I did! I contacted John to come out and inspect Faust so that I don’t overlook anything serious and move ahead with this purchase not fully knowing what I am getting myself into. John met with me Friday evening at the property at 5-pm. John is very flexible in his scheduling to accommodate his investor clients. I crawled all through this property with John all the way up into the attic. (I did NOT go up on the roof as that is one of the two things I will not do. The other thing I will not do is go into a crawl space. In fact, I will not even consider a property on a crawl space - nor a slab, for that matter.) This is about a 3-hour process but John is very thorough and he will explain to you along the way what it is he is looking for and what he is observing. He talks into a small MP3 recording device making audio notes to be transcribed later into his full, detailed report. He also snaps a huge number of pictures to refresh his memory when writing up your report.

I should be receiving John's written inspection report by Monday. He discovered two things I feared the most and that I overlooked in my initial walk-thru -- the roof and drains need extensive work. The roof has four (4) layers of asphalt shingles on top of the original wood shingles, there is inadequate venting, there are several water entry points resulting in extensive water damage and .... [gasp!] there is evidence of MOLD!! (some of it even looks "black").

Due to the lack of running water on site, John couldn't fully inspect the drain system as he would like. But he did notice a lot of evidence of water issues due to a great deal of dampness all around the floor near the exterior walls. Also, he could observe that there was high, standing water in one of the drains. John was so concerned about this situation that he referred me to Mark Collins of Down Under Plumbing (313-291-7255) and suggested that I get that looked into more thoroughly before I wind up with a HUGE repair bill.

So, I called Mark Collins first thing this morning (Saturday) and he arranged to send one of his guys out to the property at 3-pm this afternoon. Now that is responsive service! Ed showed up just shortly after 3-pm after finishing up at a previous client site and Ed inspected inside and out taking the time to explain what he was looking for and observing. Ed was extremely knowledgeable and he taught me a great deal about the sewage system and it’s anatomy under the ground. While explaining his every action, Ed ran a small camera down the drain system and discovered extensive root infiltration causing slow draining (or non-draining) of sewage and rain water.

Ed explained that the best-case scenario would be to snake out the roots all the way to the city line at the back of the property and if the crock was not damaged, then we're only looking at a $500 service call for the snaking. The worst-case scenario would be a broken crock requiring the back yard to be excavated and the crock replaced. The worst-case cost in that situation would be about $5,000 or $6,000!!!!

Ed promised that a full report will be written up and faxed to me on Monday. Between John's report and Down Under Plumbing’s report based on Ed’s observations, I am prepared to ask the bank to give me a $15K concession so that I can fix the roof, the drain system, and remediate the mold. The other option would be for the bank to fix both the plumbing and roof themselves and perform the mold remediation.

I will explain to the bank that I have already invested significantly in this property (the bank’s property) by paying these inspection fees to uncover these deficiencies that they failed to disclose and that if they are not willing to grant the requested concession amount, I will have to walk away.

That’s BAD NEWS to the bank! They don’t want to hear the words “walk away.” They want and NEED to sell this property. Every day they have this property on their books is another day of property management expense and taxes. But unfortunately for them, I have now discovered these deficiencies and I have made them known to the bank property management. They would now have to disclose these items to the next potential buyer or risk being sued. Fortunately for me, the bank knows that when they disclose these conditions to the next potential buyer, they will run for their lives, shaking and sweating from their foreheads with anxiety and fear over the extent of the damage!

The bank knows that only the strong and the brave will stick this through and take on such a challenge. They know that only the seasoned real estate investor can help them out of their predicament by buying this property and fixing it up while also doing their small part to revitalize the city of Detroit in the process. This is a win-win-win proposal the bank just cannot pass up. They win by getting rid of this liability, I win by getting an opportunity to make a reasonable return for my efforts, and the community wins by getting a renovated home that is once again beautiful and charming bringing warmth and class to the neighborhood.

The bank HAS to accept my offer or the house will sit and continue to deteriorate. The bank could refuse my offer only to have to face another aggressive investor offering even LESS than I did. But if they grant the requested concession, they will get out of their liability and be done with it.

I'm in a strong negotiating position. Even if the banker reads this blog, he would have to agree with me and grant the discount. It’s a “no-brainer!”

Based on the findings, Will is re-working his quote to take into consideration the added expense to fix the roof and the sewage line. He is going to have new numbers for me on Monday so that I can submit his scope of work (without the numbers, of course!) along with the plumbers reported findings and John’s property inspection report.

I have decided that I will just gut the basement, paint the walls white and the floors battleship grey, and make sure the basement is clean and bright with a lot of lighting. I think that will save a significant amount on the renovation rather than finishing off the basement. I have to make sure there is no more mold present behind any of the dry walled surfaces anyway.

Come back soon … I'll let you know what happens as I move forward with this exciting project!

Introducing Faust Avenue - Rosedale Park, Detroit

This will be my second flip since establishing ComfyQuarters. Curie Court was a moderate success since my margins were tight, but I learned a great deal and there is a very happy couple as a result.

I'm satisfied with my first flip but I'm excited to do even better on this project!

This is the view of the house from the street:





I first saw this home while attending a Foreclosure Bus Tour hosted by Mark Ijlal on a Saturday afternoon two weeks ago (May 31). William (Will) Curry of Fourth Dynasty Enterprise, LLC was one of Mark Ijlal's expert guests and Will was walking through the home with the group and explaining what improvements he thought would be best to bring this property back to life and put it back on the market for a quick sale.

On Monday morning following this tour, I called Nora Ijlal for the contact information of the listing agent for this property, Jay Alhashemy, so that I could place an offer on this home. I didn't know it at the time, but a young woman also on the bus tour also put in a bid on this property and we ended up in a bidding war over this home.

It turned out that I wasn't willing to go past a certain price point and she actually out bid me by only $1,100 -- so she got the house. A couple days after I was given the bad news that I lost the house to one of my fellow club members, I got a call from Jay. He informed me that although her offer was accepted she was unable to raise the cash needed to actually close the deal so I got the house, instead.

The moral of this story is that you need patience! I did have several offers out on other properties, though. You can't put offers on one property at a time and wait to see if you get it. You have to put offers on several at a time till one is accepted. I withdrew my offers on two other properties when Faust was accepted, but I still have an offer out on a home in Mt. Clemens that I think will make a great rental investment. In fact, I already have a tenant lined up so I really need to get that property. I'll share more on that one if I am able to win the bidding war on it.

Now, back to Faust. Walk through this house with me (virtually) and see if you can see the great potential as we talk about it ...

FIRST FLOOR


SECOND FLOOR

Mission Accomplished!

This was a very hectic morning and there were some minor problems with the buyer's mortgage paperwork, but it didn't take long at all to get them corrected, reprinted and signed. The closing for Curie Court went off without a hitch this morning -- money was exchanged, keys were handed over, and everyone is very happy.

From start to finish (Feb 22 through Jun 12) it was only about 3-1/2 months. That's bought, fixed, sold! Not bad! After all debt is repaid for this project I have made a cool $10,000.

Now, I know what you're thinking. This is no way to get rich flipping real estate! And you're right. It's not. In fact, I still have debt to repay from the first project I did a couple years back that is now a rental property. Also, I have put some of my own savings into the business to get started. So, I still have some money to pay back to myself. I'm just getting started.

I have another property in Rosedale Park, Detroit. I'll be posting video clips soon for the next project. But, to answer the question regarding getting rich in Michigan that's easy -- it's not a "get rich quick" scheme! It's a buy, fix, sell process and it takes time. It's like the instructions on the back of a shampoo bottle -- Wash, Rinse ... REPEAT! It's the last part that people often forget about.

Also, I will get better as I go and I will learn to reduce my costs and increase my profit margins. Some deals have a higher margin than others. Another ingredient is the buy and hold strategy. I have one rental unit now, I'd like a handful more. But the big prize will be to get a commercial apartment complex. I will do that in 2010.

Come back soon for more ....

The Sky Is Falling!

I had a pretty scary day today -- although, it really isn't all that bad.

As you know, I have been working hard the last couple of years to figure out how to prosper in Michigan real estate as an investor. Let me tell you, not only has that really helped me find a way to have another stream of income, it has been beneficial in another way, as well! Let me tell you how ....

Today was really hot and humid. I don't like this kind of heat, it wears me down and saps out all my energy. My son, Steve, usually comes over for dinner every Sunday evening to visit and just chat about the good things in life throughout the week. Well, this Sunday was to be no different but I was so tired and so was my wife, Analiza, and my daughter, Kyla. So, we decided at 4-pm to settle in for a nap before getting ready to make dinner.

At about 5-pm, Analiza and I were awakened by a rushing wind. It was very loud so I jumped up and went to the window to check it out. The sky was clear to the east, but I could see a black line just above my house - a huge black cloud moving quickly to the east. As I thought to myself, "This doesn't look good at all!", I heard some loud crash and it sounded like something may have hit the roof. I turned to Analiza and said, "Get down to the basement NOW! ... I'll grab Kyla!" So, all three of us rushed to the basement (being led by our super brave yellow lab, Adam, of course!) and as we got down there and huddled in the lights went out. We were only in the dark briefly and the lights came back on. I went up to see what was going on and that's when I looked out of the back door wall and saw what you see on the video.

I'm so thankful no one was hurt and the damage isn't nearly as bad as it could have been. We have a few broken windows, the gutters and new shingles are damaged and the roof line has been severely damaged. In fact, I have to empty my bedroom closet because the drywall has been pushed in at the ceiling!

Here's where I think being a real estate investor has been so helpful. I jumped on the phone and contacted my tree guy, Jim, and he will be out tomorrow to clear out the two fallen trees and trim up the tree next to my house that was damaged. I called a reliable roofer I know and he called me right back to say he'd be here in the morning to tarp off the roof and estimate the damages. I was able to contact my general contractor who builds spec homes and he said he would be out in the afternoon to look at the damage and give me an estimate.

If I didn't have this network of professionals on my cell phone speed dial, I would have been at the mercy of my insurance company to make recommendations and, of course, word of mouth referrals from others. That may have added more to my stress because I wouldn't know any of these providers and their quality of work. I already know these guys and have used them in the past. I feel much better knowing that this will all be taken care of quickly and that I will get a quality job.

So, I'm so glad I have chosen to become a real estate investor for more than the obvious reasons!

Sold! Now That Was FAST!

Actually ... a serious offer is pending, but I'm very optimistic.

My real estate coach and general business mentor, Mark Ijlal, always says, “Money Loves Speed!” and I do believe he is right. Talk about speed …. I just posted yesterday morning that my renovations are complete and that I am entering into full marketing mode. Of course, I have been marketing for weeks on Craig’s List, Zillow, and Owners.com (to name a few) but I didn’t have good pictures and walk-around video until recently when all the renovations were complete.

Well, just as I hit “publish” on my blog post yesterday morning, my phone rang. It was a young woman calling about the house and she just HAD TO SEE IT NOW! She was very considerate about the fact that it is Memorial Day weekend and she didn’t want to ruin or interrupt any of my plans, but she just had to see inside this house and she did NOT want someone else to scoop it out from under her. Now that is SPEED!

We have come to a verbal agreement as of last night and I have drafted up all the necessary paperwork. We will meet to sign on Tuesday at 6:00 pm and get things moving forward with a title company to handle all the paperwork and the closing. We are shooting for June 12 as a closing - just in time for Father’s Day! Dennis and Jennifer are really excited and, if I can get their permission, I will get a video testimonial and post it here for everyone to see.

Full Marketing Mode!

The time has come.
26453 Curie Court in Warren, Michigan is NOW COMPLETE!
Well, I did have to finish up with some paint touch-ups and overall cleaning (I have discovered that contractors don't do windows!) :-D

I have included an updated walk-thru video (no commentary this time) and I am going to use this as my virtual tour on the MLS (that's multiple listing service database used by Realtors). That's right, I'm using a Realtor to list my house while I advertise as a For Sale By Owner (FSBO) at the same time. If I find a buyer through my own marketing activity (Craig's list, Owners.com, Zillow, word-of-mouth, etc.) then I pay no Realtor commission. I paid an up-front flat fee of $495 to get full exposure on two MLS (MiRealSource and Realcomp) which gives me broad coverage across south-east Michigan counties.

I am looking forward to a lot of interest being shown in this house and a quick sale (no more than 6 weeks). And then ... we will be on to our next project. Between projects, I hope to share my lessons leaned as I review the costs involved. Right now, the most obvious area in which I need to improve is the costs of renovation. I have shared my numbers with fellow investors and I was told I paid almost DOUBLE what I should have paid. Personally, I don't believe they understood the full scope of what was needed, but I do believe I should be able to cut my rehab costs by at least 30% -- I just need to do more homework (research) and get better referrals from those who know how to do this. Heck ... this is ONLY my second project!

Enjoy the walk-thru:

At Last! The Day Has Finally Come! (Almost)

We are down to the final touches at Curie Court! There are a few touch-ups to be completed and the basement is being finished off (painting, install of washer and dryer, etc.)

I have taken a few photos and a couple of panoramic videos (Living Room and Kitchen) to show you how beautiful this home is.

Panoramic View of Living Room:


Panoramic View of Kitchen:


Still Shots:

Mission Accomplished?

OK -- It's now May 5 and the rehab is supposed to be completed. (Including a 5-day grace period.) Well, it ain't so! Plenty of fine details left to be completed. Take a look at my first floor walk-thru ...



And if that doesn't seem like enough work left, check out the basement ...



So, this is the critical part. Managing your contractor(s) is the part that makes the squeamish run from real estate investing -- just as property management and handling tenants makes people run away from owning rental properties. But let's face it, working with others involves conflict and there is no way to avoid it. You have to face it head on and just keep your cool. It's no different than dealing with people you work with every day. Except, when you're the real estate investor, you're the boss!

So, I'm going to enter into discussions with my contractor beginning tomorrow to discuss how we can move this project forward to satisfactory completion. He's a reasonable guy ... I'm sure we can get this wrapped up in a week or less.

Appliances Have Arrived! .... Well, almost ...

OK -- I like Home Depot and Lowe's, both. This time I got my appliances from Lowe's because my credit is tied up at Home Depot on a water heater purchase and installation. That's why it's a good idea to have accounts at both Home Depot and Lowe's -- they're basically the same, anyway, except one is orange and the other is blue, right?

Well, I was told last night (Friday) that the appliances would be delivered between 3-pm and 6-pm. So, I show up at 3-pm and I wait. And I wait ... and wait some more!

Finally, at 5:45 pm I get a call from the delivery crew and I am told they are "running a little behind" and I'd see them in about 45 minutes. So ... I wait some more!

They do show up and unload the appliances and, oh, by the way .... my dishwasher was damaged at the warehouse, so they did not bring it. A replacement is on order and I should see it in a week or two! What?! My contractor is expecting to install the dishwasher this week! OK - don't panic! I'll contact Lowe's on Monday and see what I can do to expedite delivery.

This should pose no delay since my contractor has about two more weeks of work left to complete the job and get the little details ironed out. So I'm not concerned - yet.

Interest Is Building!

It seems my advertising on Craig's List is building some interest! The house is getting better, but I'm not ready to post more pictures or video just yet. My contractor is on a much-needed family vacation to Italy for 10 days. I'm anxious for him to return and finish up. There is about 1-1/2 to 2 weeks worth of final details to get the job done, but it will be finished very soon!

I received three inquiries about the property today. I think the selling season is now in full swing. I need the final touches done quickly so I can get on to the next project!

I'll post some video and pictures by the middle of next week. Come back again!

Go view my flyer on For Sale By Owner: http://www.owners.com/WTG7380

Starting To Look Like A Home ...

Much more progress has been made. The counter tops have been installed, the plumber has been in and we now have toilets and sinks! The tile has been laid and some painting has been done. The carpet will be laid Friday or Monday.

I'm still waiting for the exterior doors to be replaced and storms installed - but we are getting further along now and it's getting exciting.

I've already had some calls from interested parties. They want to know if my renovations are on schedule. I assure them that things will be done by the end of the month, as anticipated, and to stay tuned! I will purchase the applicances this week and have them delivered next weekend. Hopefully I will be able to get much better pictures and video by then for you to see how this place has been transformed.

I hope the landscape company gets on site soon, too, to clean up the yard and do some maintenance to make the place much more appealing from the curb.

Once I can get some nice interior photos, I will update my online marketing material and really start generating interest in this property.

Thanks for stopping by and checking on my progress ...

Kitchen Cabinets Have Arrived!

Finally! After some waiting, we now see some improvements being made. Till now it's been nothing but destruction and "oh my goodness! what's happening to this house?!"

Here is a short video clip I took yesterday afternoon. Today, more work will be done and it should start looking a lot nicer. Also, the city inspector comes today to do his initial inspection. Fortunately, my contractor will be present when the inspector arrives. This is a good thing because the inspector can show my contractor first-hand exactly what he expects to see on the next inspection. It will reduce any misunderstanding from the beginning.

Enjoy the video clip and come back often for more updates!

Electrical Work Underway

The roof was done last week and now the inside work begins. My contractor works fast! The dumpster has arrived, the kitchen has been partially demoed and the electrician has completed a great deal of work already.

I have uploaded a couple of brief video updates (walk-through) for you to enjoy.


Above video clip: 1st Floor walk thru discussing electrical work currently (no pun intended) under way.


Above video clip: Basement walk thru and discussion of new electrical service panel.

I anticipate a lot of work is going to get done in the coming week. I will be meeting with a landscaper this week for a quote on the yard cleanup. This winter has been brutal and the snow-covered ground has delayed getting any quotes. But the weather has finally broke and is now cooperating.

This is the critical time in the process (in fact, I'm probably a couple weeks behind schedule on this activity) when I need to make up some flyers and distribute them to the local neighbors. It's an opportunity for them to choose their next neighbor! They can check with friends, family and coworkers to see if anyone they know would like to move into their same neighborhood.

Also, I need to put up my For Sale By Owner (FSBO) sign this week. There is no excuse for not having it up already -- I'm behind schedule on the marketing of this home. And that is totally my fault -- I need to get crackin'!

Progress Is Being Made ...

This is now March 8, 2008. It has now been two weeks since the day of closing, Feb 22, 2008, and so far I have only been able to get the roof replaced. I am having a third contractor come in next week (Monday) to give me an estimate for the interior renovations. So far I have been quoted $42K and $30K by two different contractors. Neither quote is close enough to my initial estimate for rehab, but I could have under estimated the costs due to my inexperience. But I'll keep trying.

My hope is to get the cost of rehab below $30K and below $25K, if possible. The short video (above) shows the completed roof, but it’s a very brief clip. I will do a walk around when the weather is a little nicer -- I didn’t want to trod through the snow today.

This is a picture of the water meter that was reconnected this week by the water department. It's a good thing the valves were all shut because we have some missing copper pipes that need to be replaced -- there would have been water everywhere!!

I hope to get the demo started (that’s builder language for demolition of the interior) no later than next weekend and hope to have the house completed by April 15 - it’s an aggressive schedule, but I am on a very tight budget and each day I own this house, the holding costs are adding up. So … the clock is ticking!

I will be offering this house as a FSBO (For Sale By Owner) but I am trying something that I hope works well for me. I picked up the deck of business cards that were left on the kitchen counter. These are the business cards of Realtors who have walked through the house before I bought it. It is a custom that Realtors will leave their business card behind to let other Realtors know who has been through. The more cards you see may be an indication of many things. Perhaps the house could be sold soon? Perhaps the house isn’t selling because it is priced too high? Or, maybe there is something wrong with the house that only an inspection will uncover? Who knows …

But, what I did was call these Realtors and offer to pay them a 4% commission if they bring me a qualified buyer. I save 2% off the “traditional” commission. I figure these Realtors may have interested buyers lined up - especially once they know I will be fixing the house up from top (roof) to bottom (finished basement)! I also informed them that I will supply a complete, brand new appliance package (kitchen and laundry) to the qualified buyer.

Let’s hope this advertising scheme works! I will also be putting my own sign on the lawn and will print up flyers and distribute them to the local community.

Stay tuned for more updates …..

The Curie Court Project - Stage One

OK - Yesterday, I promised to provide some video. Here is a walk-thru of the project I am now working on. The closing date hasn't been set yet, but I'm already moving forward with the inspection (done) and I am waiting for some estimates from my contractors to make sure the numbers actually work out the way I have estimated. I will reveal more about the numbers in future posts when all is said and done and we can analyze what went well and what could have been done better.

For now, take a moment to walk through Curie Court with me and see what kind of work lies ahead of me. My goal is to make this property appealing for a quick sell. Renting it out is "Plan B", but I really don't want to do that on this deal, so let's just remain positive and get this house flipped!

My Very First Blog Entry!

Hello everyone!

Welcome to my real estate blog! I decided to start this blog as a way to share my experiences as an amateur Real Estate Investor with my friends, family and anyone else who is interested in Michigan real estate from an investor's point of view.

I have titled this blog "Flip And Grow Rich In Michigan" because that's exactly what can happen if you spend some time learning the business and then get out there and start DOING something. Get educated in this business and then set your dreams into actions -- do one thing every day related to your real estate investing business and after one year you will have done 365 significant things toward achieving your dream!

I have just started my second investment project and I will soon post some video clips of this project once I have bottom lined the PA. (That's Realtor-speak for a purchase agreement that has been signed by both the buyer and the seller. Sometimes also referred to as a "fully executed purchase agreement.")

I'm really excited about what is happening in Michigan real estate today. No, I'm not happy about the sad stories behind those who are losing their homes to foreclosure (more on that in future posts) but someone is going to profit from the woes of others and I don't feel guilty if that someone is ME!

I look forward to sharing more of my experiences in future posts ....