The other day I received an email from a UK Buyer who purchased several homes in Detroit a few years ago. Apparently they responded to an “ad” that claimed easy-money, cash flowing properties that are remodeled and tenanted and a GREAT DEAL at $45,000 a pop AND the company that was offering this fantastic opportunity was going to manage the properties as well! Wow, talk about picking bills off of the money tree!
I am sure that this must’ve sounded like a super great deal…unless you understand the Detroit market and the challenges that the city is facing. Keep in mind that this was 2011 when these properties were purchased. Detroit has come a long way, and can be a good investment, but if you are an international Buyer, you have to know what you’re dealing, and more importantly, WHO you are dealing with.
The initial contact with me was because I am a builder, in addition to being a Realtor. They wanted me to go to each property and see what the “state of the state” was. Before I was going to take a dime from them for that service as a builder, I started my homework with title.
The sad ending to this story is that by the time they got to me, and I did the leg work, almost every one of these properties had been/or are currently being given back to the Wayne County treasurer for non-payment of taxes. How does that happen? It happened for several reasons, which I won’t go into here, but let’s just say that the paperwork was an incredible mess and there was no way, with the way it was set up, that the bills would have ever made their way to the other side of the pond. And the tax debt was so much that there is no way that these investors could afford the tab.
Needless to say, I have not visited any of these properties nor did they ever call me back after I delivered the bad news.
So why am I writing this blog? The answer is simple. Buyers, do your homework! For those of us who live near Detroit and understand the market, in 2011, few properties, completely rehabbed and tenanted were worth 45k. These properties were supposedly tenanted for 3 months, some more and some less, and then company that sold them to the investors told the investors that they were no longer managing the properties after the “tenant moved out”. It’s a simple lesson. If it walks like a duck, and talks like a duck…
There some GREAT investment opportunities here in Michigan and in several states that were annihilated by the crash of the real estate market back in the day. But you must know who you are dealing with, what their track record is and what you can expect in the transaction. Investing in the US is completely different from state to state, let alone a different country.
Don’t lose your million dollars to people who claim to be something that they are not, or are selling something that sounds too good to be true. If you want to know who you are dealing with, the state of MI is very transparent. You can go online for free, and search for just about any property and for certain, any Agent, or one pretending to be an agent. Verify licensing at: https://www.lara.michigan.gov/colaLicVerify/lName.jsp
Just about every municipality is online. If the search is not free, it’s $2.00 US. Just about every county has online records as well. And a title search, which is part of your purchase, will vet who owns the property, what is owed on the property, any outstanding liens. Ask for the title work before wiring your funds overseas. If you don’t understand what you are reading, call the title company. They will assist you with anything that you need.
If you need honest representation, call us. If we cannot assist you, we will help you find someone who can. We don’t work every single market in Michigan, but we can and will assist you in finding a good Agent.
Click on the Blog as well and check out some helpful articles about buying smart. An educated Agent and an educated decision is ALWAYS the best decision. Do not fall prey to the hype and ever feel forced to ‘act now’ or the deal will go away. Good deals are still out there, you just need to know where to go to find them. Call us, we will help!