Investing in Michigan in 2009: What You Need to Know

We’ve all heard the stories of fellow Michigan Real Estate Investors who have lost their shirts in recent months trying to flip homes. Caught of guard as the market collapsed beneath them, they just kept waiting for a buyer to show up and cash them out so they could take home a fat five-figure check.

While on the surface things may look rather bleak, the ability to boost your net worth FAST has never been greater than right now. Why? Because prices have fallen to all time lows and have set the stage for savvy investors to position themselves to generate unheard of profits in the coming years.

As Michigan goes through a time of change, success as a real estate investor is dependent on two factors. The first is selecting the proper investing strategy and the second is finding funding sources to fuel the growth of your real estate portfolio in spite of the fact that lenders are making it increasingly difficult to secure such loans.

While addressing both is essential, in the interest of time we’ll tackle the first one in this article and save the second for another day. But before setting your sites on any one investing method, it’s best to get a clear mental picture of the current state of affairs in southeast Michigan.

Unlike the majority of the regional markets across the nation which began to see home values decline at the end of 2006 or the beginning of 2007 when the subprime meltdown began to take effect, values in Michigan began their downward march as far back as the middle of 2004. At this same time renegade mortgage brokers in states like California, Nevada, Arizona, and Florida were still in the middle of their stated income and no-doc mortgage boom.

This extra “down time” has meant that the Michigan market has had to handle all the troubles, stresses, and strains that the national market has been experiencing along with an additional two years of declining home values which other areas have not had to deal with.

Now we all know that people are emotional creatures who often make irrational decisions based on fear and Michigan residents are no different. Watching values decline for almost half a decade has left many Michigan residents in a state of shock. When things were good many local residents felt that values would continue to rise and the good times would endure forever. Now with values falling they, mistakenly harbor the misguided belief that housing values will continue the present pattern of double-digit declines for years to come. Same mistake, different day.

This is of course an absurd position to take, but as we said before, people placed in extreme situations often cling to flawed concepts and ideas due to their emotional state. Stay with me and you’ll see that it’s this core belief that opens up the opportunity for those who can peer past the doom-and-gloom news headlines and see it for what it really is.

A large number of Metro Detroit residents are actually rejecting a cornerstone part of “The American Dream” which is the idea that a family’s home is their greatest investment and every family should strive to own one.

After focusing on the short-term reality of where home prices are at today, we see a new sentiment taking root among local homeowners that regards renting as actually being better than owning.

The new belief that “Renting Is The New Buying” has thankfully not really caught on in other markets, but it is alive and well in Metro Detroit…and the number of people who’ve adopted this paradigm shift is growing each day. Renting has lost much of its negative stigma and is instead, for the first time, being heralded as a smart move in the eyes of friends and family.

This unique situation has created an unprecedented opportunity for those who want to supercharge the growth of their investing dollars through the vehicle of Michigan Real Estate Investing. For you see while values have declined significantly, rental rates have not!

A three bedroom brick ranch home in a nice area that would have rented for $950 per month two years ago still commands that same $950 per month today. As little as two years ago this home would have sold somewhere between $95,000 and $110,000. Today you can find the same home, needing little to no work, for as little as $55,000.

So here it is…the secret strategy of creating massive profits in Michigan Real Estate Investing in 2009. Very simply all you need to do is buy homes at steep discounts and then rent them out for monthly cash flow or equity buildup.

The old formula of buying a home, fixing it up, and selling it at a retail price is almost nonexistent in a market whose participants are beating down the doors in an effort to be able to rent something.

If you as a real estate investor are willing to give the market what it wants then you’ll be able to reap huge rewards in the coming years when the market returns from the artificially low prices that we are seeing today. In the meantime you receive the benefit of being able to cash flow $300-$500 per month on each and every property that you buy, even if you finance the entire amount!

So while you may hear plenty of negative news about Michigan and its economy the benefits of Michigan Real Estate Investing far out weigh any associated negatives.

The only question that remains is whether you’ll take advantage of this once in a lifetime opportunity or not.