[W-Tinc]

Looking for other viewpoints, maybe how other people weigh the negatives on something thats been nagging at me all year.

Cheap houses, reos/desperate sellers/etc. I have family that lives in a small to medium sized town in Michigan. Houses that were selling for $60-$100k a couple years ago are now selling for $6-$30k.

I love the idea of being a snowbird, everytime I look at the mls(pretty much every week) I want to clean out my bank account and drive up there and buy a few houses.

Bought one there this spring that my brother lives in, pretty strong rental market rents go from $450-$700. The city has some run down spots, but is not big enough to have what I think of as entrenched ghetto areas, where its miles to get to a good neighborhood.

What are the downsides here? The houses need some work...I work on crappy houses all the time to make a living.

Dealing with renters sucks...dealing with customers sucks at times as well.

House may go down in value...not a whole lot of room between purchase price and zero.

Too many vacancies while having to pay insurance and taxes...not sure on this, seems like you could always lower the rent a little to get a tenant, maybe that would let you be pickier about the tenant.

No work there and depleting what little cash I have seem to be the biggest negatives.

This sounds really terrible and I feel for the people selling houses(I have 2 I wouldn't mind selling in Al) but.. I am eagerly awaiting winter to see what new depths the real estate market may sink to.

Any Thoughts?

 

[freemason21]

6-30k?? wow. at 70k my house was the cheapest sold in the area in quite some time. im talking years. the last mortgage on it was 210k.

 

[Heritage]

Holy houseprices batman:w00t:

6-30:w00t:

Here in Toronto you can't find a habitable house for less than 300k. Median being about 400k.

I'd buy up all the homes I could get my hands on for that!

I like the idea of renting them out at sub-standard rent rates and get pickier on the tenants.

Dang, I've built dog houses worth more than that!:w00t:

 

[W-Tinc]

They do have higher priced neighborhoods there. These are 700 to 1400 square feet, built from 1900 to 1960 in solid middle class or less areas.

No place I would feel uncomfortable spending the night, but not new or trendy.

 

[freemason21]

They do have higher priced neighborhoods there. These are 700 to 1400 square feet, built from 1900 to 1960 in solid middle class or less areas.

No place I would feel uncomfortable spending the night, but not new or trendy.

my house is in the worst area in a 50/60 mile radius. its small, but theres still LOTS of drugs, stabbings, shootings every so often, people getting shot every so often, just your typical low income neighborhood.

EVEN SO, it was 70k which seems to be well above your market place. pretty insane if you ask me.

 

[HusqyPro]

Mike Finley is the man to ask about property management. He's chimed in on several threads on the matter. Knows his stuff.

 

[jkfox624]

Haha that sounds like around here, i bought my house 1200 sq feet with an acre of land, house built in '79 for 59k. Avg house price around here is 75k maybe, 1 out of every 30 listings might be over 300k. 1/3 are in the 100-150k range. Bottom is 20k in town.

 

[W-Tinc]

my house is in the worst area in a 50/60 mile radius. its small, but theres still LOTS of drugs, stabbings, shootings every so often, people getting shot every so often, just your typical low income neighborhood.

EVEN SO, it was 70k which seems to be well above your market place. pretty insane if you ask me.

It does seem insane. I think there are just so many more homes for sale than buyers the banks keep dropping the price, they need to get them off the books. This just drags the rest of the market down.

The bad employment situation in the area doesn't help any either. But a city will not just dry up and blow away, things will get better.

Kinda funny..there are lots of houses mixed in with the cheap ones listed at 60k-80k, they look a little better than the cheaper ones but not 50k better.

I have a pretty good idea what Mike would say, I have read his posts on real estate. Would not disagree with him but have to make due with what I have to work with.

 

[Paulie]

I have family that lives in a small to medium sized town in Michigan.

Where abouts in the mitten are ya talking about?

www.phbconstruction.com

 

[boman47k]

Just bought an fixer-upper here in nw alabama. And I do mean fixer-upper. Alreqady been pretty much gutted of the drywall. Still needs quite a bit of work. Not that much for those of us who can do a little work on our own. Not sure what I will do with it yet. Like has been said not far from the price I paid to zero. The best thing is it is paid for. No having to make payments if it sets forever.

Actually I am glad it has been gutted as much as it has, saves me the trouble if I decide to fix the thing up.

 

[freemason21]

Haha that sounds like around here, i bought my house 1200 sq feet with an acre of land, house built in '79 for 59k. Avg house price around here is 75k maybe, 1 out of every 30 listings might be over 300k. 1/3 are in the 100-150k range. Bottom is 20k in town.

PA has a similar market compared to massachusetts but thats still crazy. my house was built 45' and is 1200sq. i needed to gut it and i put about 35k into it.

 

[freemason21]

It does seem insane. I think there are just so many more homes for sale than buyers the banks keep dropping the price, they need to get them off the books. This just drags the rest of the market down.

The bad employment situation in the area doesn't help any either. But a city will not just dry up and blow away, things will get better.

Kinda funny..there are lots of houses mixed in with the cheap ones listed at 60k-80k, they look a little better than the cheaper ones but not 50k better.

I have a pretty good idea what Mike would say, I have read his posts on real estate. Would not disagree with him but have to make due with what I have to work with.

if i was you and had money to buy a house cash i would. i'd fix it, rent it for cheap but get a really good tenant in there. the biggest thing i'd be looking for is someone to take care of the house so i can sell it later on. if you got a decent amount in the bank, and can comfortable take a 6-30k hit plus the cost to fix up the house. or if you would finance it, if you can comfortable afford to cover the mortgage/taxes/insurance with out a tenant. i'd definitely buy. wait 6 months to a year, see how the market is, and buy another one if it showing signs of improving. thats what i would do.

 

[Mike Finley]

Looking for other viewpoints, maybe how other people weigh the negatives on something thats been nagging at me all year.

Cheap houses, reos/desperate sellers/etc. I have family that lives in a small to medium sized town in Michigan. Houses that were selling for $60-$100k a couple years ago are now selling for $6-$30k.

I love the idea of being a snowbird, everytime I look at the mls(pretty much every week) I want to clean out my bank account and drive up there and buy a few houses.

Bought one there this spring that my brother lives in, pretty strong rental market rents go from $450-$700. The city has some run down spots, but is not big enough to have what I think of as entrenched ghetto areas, where its miles to get to a good neighborhood.

What are the downsides here? The houses need some work...I work on crappy houses all the time to make a living.

Dealing with renters sucks...dealing with customers sucks at times as well.

House may go down in value...not a whole lot of room between purchase price and zero.

Too many vacancies while having to pay insurance and taxes...not sure on this, seems like you could always lower the rent a little to get a tenant, maybe that would let you be pickier about the tenant.

No work there and depleting what little cash I have seem to be the biggest negatives.

This sounds really terrible and I feel for the people selling houses(I have 2 I wouldn't mind selling in Al) but.. I am eagerly awaiting winter to see what new depths the real estate market may sink to.

Any Thoughts?

3 things you need to know.

#1 where is the neighborhood going? Up, down, sideways? You can't buy realestate without considering where the end game is and how it's going to effect your investment.

#2 School system. Big, big player for rentals to some degree depending upon what your rental plan is. School system plays a huge part in that.

#3 AND THIS IS PROBABLY THE MOST IMPORTANT THING IN REGARD TO WHAT YOU ARE LOOKING AT. - Who are your renters going to be? Put some serious ass thought into that.

Yeah you can buy a house for 20K, but who is going to be renting it from you? Is it going to be only crack heads that are going to rent in that neighborhood? Drug dealers? Gang bangers?

Thats what I think a lot of people don't think about. Yep, you can get a deal on the house but who's going to be renting it from you.

I don't know about you but I'd rather rent to some nice old folks, a nice couple with a kid or two just starting out.. some 'citizens'.

Most of the time 'citizens' don't want to rent and don't have to rent where 6-30K house are selling.

A few things to think about.

 

[Framer53]

3 things you need to know.

#1 where is the neighborhood going? Up, down, sideways? You can't buy realestate without considering where the end game is and how it's going to effect your investment.

#2 School system. Big, big player for rentals to some degree depending upon what your rental plan is. School system plays a huge part in that.

#3 AND THIS IS PROBABLY THE MOST IMPORTANT THING IN REGARD TO WHAT YOU ARE LOOKING AT. - Who are your renters going to be? Put some serious ass thought into that.

Yeah you can buy a house for 20K, but who is going to be renting it from you? Is it going to be only crack heads that are going to rent in that neighborhood? Drug dealers? Gang bangers?

Thats what I think a lot of people don't think about. Yep, you can get a deal on the house but who's going to be renting it from you.

I don't know about you but I'd rather rent to some nice old folks, a nice couple with a kid or two just starting out.. some 'citizens'.

Most of the time 'citizens' don't want to rent and don't have to rent where 6-30K house are selling.

A few things to think about.

Mike you missed one.
What are your renters going to do for A job?
Almost 20% unemployment in MI right now!

 

[W-Tinc]

I have family that lives in a small to medium sized town in Michigan.

Where abouts in the mitten are ya talking about?

I have family in GR, Lansing, and Kalamazoo, haven't decided on a locale 100% yet but within that triangle. GR is a little big and Kalamazoo is a little too run down.

 

[ampman]

the problem is liberal gov,t with liberal thoughts

 

[W-Tinc]

3 things you need to know.

#1 where is the neighborhood going? Up, down, sideways? You can't buy realestate without considering where the end game is and how it's going to effect your investment.

#2 School system. Big, big player for rentals to some degree depending upon what your rental plan is. School system plays a huge part in that.

#3 AND THIS IS PROBABLY THE MOST IMPORTANT THING IN REGARD TO WHAT YOU ARE LOOKING AT. - Who are your renters going to be? Put some serious ass thought into that.

Yeah you can buy a house for 20K, but who is going to be renting it from you? Is it going to be only crack heads that are going to rent in that neighborhood? Drug dealers? Gang bangers?

Thats what I think a lot of people don't think about. Yep, you can get a deal on the house but who's going to be renting it from you.

I don't know about you but I'd rather rent to some nice old folks, a nice couple with a kid or two just starting out.. some 'citizens'.

Most of the time 'citizens' don't want to rent and don't have to rent where 6-30K house are selling.

A few things to think about.

Thanks Mike. I agree, spent almost four days driving the neighborhoods in different places and asked a ton of questions trying to get a feel for them.

Was pretty suprised at the direction some areas were going, was not what I expected. A big question for me is as Framer53 said, who will rent with no jobs.

Its easy to see vacancies and rent amounts now, but will people snap all this cheap housing up and over saturate the market by next year?

Guess if that happens we go to plan B and rent to own or sell on LC, I know people won't all have good credit by next year.

 

[Paulie]

I have family in GR, Lansing, and Kalamazoo, haven't decided on a locale 100% yet but within that triangle. GR is a little big and Kalamazoo is a little too run down.

OK so your talking my side (the west) of the mitt. There are some great buys here now I agree.

I have a friend that's still in the rental game and he would always look to buy in the area's where they're building a new school or just built one. He figured the state already did all the work for him in forecasting growth and per ca pita income. Kinda what Mike F said.

www.phbconstruction.com

Good luck.

 

[W-Tinc]

if i was you and had money to buy a house cash i would. i'd fix it, rent it for cheap but get a really good tenant in there. the biggest thing i'd be looking for is someone to take care of the house so i can sell it later on. if you got a decent amount in the bank, and can comfortable take a 6-30k hit plus the cost to fix up the house. or if you would finance it, if you can comfortable afford to cover the mortgage/taxes/insurance with out a tenant. i'd definitely buy. wait 6 months to a year, see how the market is, and buy another one if it showing signs of improving. thats what i would do.

Thats a good plan but I'm thinking I may be ready for a more permanent change. More along the lines of a tiny purchasing blitz, fluff and rent by spring. If that goes well try to drop some assets and repeat next summer.

Next we just hang out and putter in Mi over the summer and zip down to the gulf coast to work the winters. Could happen, unless I win the lotto first:clap:.

Seriously though..I've read people say they are glad they have a secure job/alot of savings/big 401k/etc to help them get thru this time period.

I take the view that for some of us a little light in those departments this time is a great equalizer. There are great deals to be had out there.

 

[W-Tinc]

OK so your talking my side (the west) of the mitt. There are some great buys here now I agree.

I have a friend that's still in the rental game and he would always look to buy in the area's where they're building a new school or just built one. He figured the state already did all the work for him in forecasting growth and per ca pita income. Kinda what Mike F said.

Good luck.

Thats a good idea, but do they still build schools in Michigan:w00t:. I will start checking.

Its odd for me to see the changes there versus here in Al from when I moved south in the early 90's.

Was picking on one brother about fast food places with pay phones in them still, told him don't worry, the north will rise again.

I have another brother who is close to Grand Rapids, things seem to be better there. Is there still alot of work going on?