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Real Estate Investors – The Time To Invest in Detroit and Southeast Michigan Is Now

admin — Tue, 22 Feb 2011 23:59:50 +0000

With the burst of the housing bubble, home prices have fallen dramatically and Michigan has been one of the hardest hit markets in the United States. This might just make Michigan one of the best markets to invest in right now.

It’s no secret that the struggling automotive industry has caused widespread job losses throughout Michigan, and as a result, foreclosures have driven Michigan housing prices down more than 60% since 2006. According to Realty Trac, foreclosures account for 33% of Michigan’s home sales through the 2nd quarter of 2010, and this trend is expected to continue through 2011. For real estate investors these foreclosures represent an excellent opportunity to purchase property at a steep discount.

The Michigan economy is not out of the water just yet, but there are some very encouraging signs indicating that things may be turning the corner.

1. Detroit‘s Automakers Are All Producing Profits

It is no secret that Michigan’s economy is heavily tied to the automotive industry. In recent years, the automakers have struggled tremendously, but the restructuring is starting to take hold. In the 2nd quarter of 2010 all three of Detroit’s automakers were in the black posting the following profits:
Ford – $2.6 Billion General Motors $1.3 Billion Chrysler – $183 Million

This is welcomed news for the Michigan job market as these profits have already resulted in renewed investments into Michigan’s economy. The Michigan Economic Development Corporation reports that 17 of the world’s leading electric battery companies are investing $5.8 Billion into Michigan. This includes a $43 million investment by General Motors for a new plant that will manufacture the batteries for the Chevy Volt – the automotive industry’s first fully electric vehicle. These investments are expected to create approximately 63,000 jobs.

2. The State of Michigan Has Provided a 42% Tax Credit to Film Makers

In April 2008, the state of Michigan announced a 42% tax credit for film makers that produce films using Michigan workers. This has spurred a flurry of film making activity. Before the incentive, Michigan averaged five film productions annually. In 2008 thirty-one films were produced, and in 2009 thirty-five films were produced. This trend is expected to continue with the announcement of 3 major studios to be built in Pontiac, Detroit, and Grand Rapids. These studios alone are expected to bring 6500 permanent jobs to Michigan.

3. Investment in Renewable Wind Energy

Because of Michigan’s vast coastlines along the great lakes, the wind potential is phenomenal. Michigan has enacted the Renewable Portfolio Standard which requires 10% of the state’s energy demand to come from renewable resources by 2015. This standard is sure to drive investment into renewable energy resources in Michigan.

The Time to Invest in Michigan Is Now

All of this economic activity is sure to result in the appreciation of Michigan’s deflated housing prices. In fact, Yahoo Real Estate is projecting that the Southeast Michigan real estate market will appreciate by 33.1% by 2014!

For investors, the time to invest in Michigan real estate is now. Fortunately, investors do not need to live in Michigan to participate in this market. Companies like Michigan Turnkey Investments are setting up cashflowing turnkey investment properties for out-of-state investors. These properties are solid investments that boast returns from cashflow in the range between 13% – 20% annually. With these kind of returns and the prospect of heavy property appreciation, it’s a no-brainer – the time to invest in Michigan real estate is now.

The Real Estate Market: It Is Ever Going to Turn Around?

admin — Sun, 20 Feb 2011 15:17:04 +0000

What’s been happening with the real estate market in the United States over the last few years? With unemployment and foreclosure numbers (and bailouts) at all time highs, how long is this recession going to last? Are the experts really able to predict what the economy and real estate market is going to do in the future?

How we got here. If you haven’t heard, the primary reason there are so many foreclosures is because some of our alleged “leaders” decided that almost everyone in the country should own a home, even if they couldn’t afford it (I say “alleged leaders” because true leaders would admit their mistakes and take corrective action, not blame everyone else and give bailouts to banks, but that’s beside the point). Many Americans over-leveraged their incomes and homes by buying more than they could afford. That, coupled with high levels of credit card debt and unemployment, created this economic “consumer unfriendly” climate.

With all the doom and gloom we hear every day, it’s good to see some encouragement once in a while, isn’t it? A few days ago I saw a billboard that said “Recessions 101: the funny thing about recessions is that they end.” How true. In most cases, an economy cannot go down forever. There’s a cycle, and it will turn around. The question is when?

Most economic experts are not in agreement about whether we’ve hit the bottom of this cycle. Still, I’ve had conversations with business owners who have weathered many real estate cycles who say we are not yet at the bottom. With government debt and spending also at an all time high, the value of the U.S. dollar is dropping rapidly, which in turn may cause inflation. What does that mean for the average American? In simple terms it means the $100 you have in your pocket may only be worth $93 next year. It also means that the debt you acquire this year will cost you more to pay off next year. It truly is a time to pay off your debts and have cash reserves in place; something which the average American is not an expert. Dave Ramsey dot com is a good resource for help accomplishing this is.

Job growth may be the number one factor that affects the real estate market, so what has the job market been saying lately? Besides the influx of temporary Census jobs, job growth has been nominal nationwide. Each state has different statistics, but across the country, the unemployment rate remains at 9.6%. As soon as we see these numbers going up consistently (actual numbers, not projections), we can most likely expect the housing market to start rising again.

In light of this info, what trends are we seeing? For the most part, people are spending less on consumer goods and saving more money. Some are even selling their homes and renting instead (or moving in with family). People are becoming adaptive and are finding ways to survive, just like our American ancestors who founded the country. Others are finding new businesses to start and are thriving.

In times like these, it’s important to take the time to keep good track of our income and expenses, and to spend less money than we make. If we do those two things, we will be sitting strong and will be ready to prosper when the economy decides to turn around. For those who don’t want to wait for the economy to turn around, find someone who is doing well in this down economy and copy their habits. You know what “they” say: if you do what someone does, you’ll get what they’ve got, every time.

Will the Real Estate Market Rebound in 2011?

admin — Sat, 19 Feb 2011 00:31:30 +0000

The short answer is yes but it comes with a qualifier because it depends on which market you are talking about and how much improvement that you are expecting. As you may already know, the real estate marketing has been taking a battering in recent years and Georgia Foreclosures are at an all time high. In fact, many banks and other lenders are having trouble identifying clear ownership of Georgia Foreclosures because they have changed hands so often and so many lenders have went out of business.. With things being this bad it will take a lot of improvement to get it back to normal. You have to keep that in mind because although there will be overall improvement in 2011, it doesn’t mean that it will be banner year.

In the residential real estate, conditions have already improved for people wanting to buy Mountain Home Properties and many other residential properties. Some Mountain Home Properties that were considered luxury homes are now available at prices that middle-income buyers can afford. Mortgages are much harder to qualify for but if you can get a mortgage or have the money to spare then you can get some fantastic deals on Mountain Home Properties. By 2011 Georgia Foreclosures will probably be even higher because the market is still evening itself out. Most reports forecast that the real estate market will keep correcting itself through 2010 and 2011 will show the first real sign of improvement.

The commercial outlook has an even sunnier future. There are still a lot of commercial Georgia Foreclosures but studies are showing that more renters are making commitments as the months go by and 2011 will mark the first real progress for commercial real estate in years. The downside for commercial property owners is that the rents for these properties are lower than they have ever been.

Overall 2011 will see a healthier real estate market but one that is much more selective. In the past there were more realtors selling Mountain Home Properties than you could count. Many of them were part-time realtors and others were less than talented. The last few years of difficulties have culled the realtor herd and it has left the truly exceptional ones standing. That means that they are more selective about the clients that they work with and the properties that they represent. The upside for buyers is that they are much more likely to find you the right Georgia Foreclosures and Mountain home Properties to invest your money in.

Is Commercial Real Estate Turning the Corner?

admin — Tue, 15 Feb 2011 00:19:06 +0000

Several key factors currently surfacing in Commercial Real Estate are moving quickly and if we look at these, we can see why multi-family/apartment purchases is a good investment class choice. In several areas of the country, demand is starting to reach the levels of supply. Occupancy rates are increasing. This upward occupancy rate trend will more than likely increase due to five main factors:

1. The economy is improving (very slowly). More jobs are coming online, making it possible for room mates and children who moved back in with their parents to go back into the rental market.

2. Echo-Boomers are over 70 million strong in this country and coming of age. The majority of these Echo-Boomers will be renters since the face of our national housing industry is being totally reconstructed with stricter purchasing requirements.

3. People are still losing their homes to foreclosure. They have and will continue to become renters for the foreseeable future.

4. There has been a virtual stop to any new apartment building construction with few exceptions. It will take time to turn that boat around and start these projects back up again; although any movement will now will be with greater caution than ever seen before to avoid over-building supply that helped to land us in our economic disaster since 2008. Obtaining permits, securing financing and construction, guarantee a slow start up for new construction.

A fifth, and the most interesting reason that points to why now is a good time to buy apartment buildings is that the CMBS (Commercial Mortgage Backed Securities) market is starting to pick up. This is a very important indicator of the turn around. If banks can once again package and sell their mortgages, then they will have more confidence in supply the financing to borrowers for new apartment construction. All indications show that this bond market is strong and deep.

The strong, larger banks will lead the way in the lending market, due to the weakness of many of our regional banks. This weakness is due mainly to the position these types of banks took by lending on commercial buildings and commercial construction loans which are in, or approaching default. The larger banks will start loaning again once they feel comfortable that money can be made and they can sell the mortgages off again. The regional banks are still foreclosing and agreeing to short sales on commercial buildings. As more loans hit their maturity 2011, 2012 and 2013, more of these apartment buildings will hit the market.

Another Perfect Storm…
We heard a lot about the “perfect storm” that brought down the Real Estate market and sent this country into recession. It looks like another perfect storm is coming; this time a good storm that will get us and commercial real estate back on track. What are this storm’s dynamics? We have two banking groups: the first group is healthy, has money to lend, but is waiting on the bond market turn. These are the larger banks. The other group is comprised of the local and regional banks that made loans now defaulting. Under each groups’ current lending environment we have comparatively cheap apartment buildings for sale today; much cheaper than replacement costs.

An overwhelming conclusion is that if you have cash, buy now! Buy now before occupancies rise and the large banks start lending again, because when that happens the assets will no longer be as cheap as they are now. Be smart and research each market and building thoroughly, but do start purchasing today! The recovery storm is under way and prices will rise again.

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