Why Smart Investors Worldwide are All Buying Michigan Foreclosures in 2009

There are a lot of people looking at the price of Michigan foreclosures these days who are realizing that they could buy a house, rent it out, and make $400 per month in positive cashflow after paying their underlying mortgage. Ten of those types of properties will earn an investor $4,000 each month which is a pretty good strategy to try and dodge the recession.

So why aren’t more people snatching up houses at rock bottom prices like a kid on a Toys R Us shopping spree?

Well when they take the next steps to transforming this dream into reality they find out that most mortgage lenders currently will not allow you to have more than 4 mortgages to your name if you are applying for another.  This means that if you have a mortgage on your own home you can only have three more investment property mortgages.

You would think that people would go out and get their four properties, maybe even have their spouse get another four too.  Instead we see people deciding that if they can’t buy ten next month in their own name, they won’t get involved at all.

I know a lot of people that are buying Michigan Foreclosures and are using creative strategies to work around the 4-property and high-down payment obstacles.  Here’s one that works well.

Roll your properties into commercial loans.  If the properties were bought right with significant positive cashflow, then it shouldn’t be too difficult to package three rented homes together into one commercial loan.  This frees up the funds that were used to acquire the property (either from a line of credit, straight cash, or other sources) so they can be re-invested in purchasing an additional three properties.

Commercial loans are different from standard mortgages.  They often come with 10 year amortizations and have to be refinanced every five years and because of that it’s usually best to select the right type of investment homes that have such a high cashflow rate that they can account for it.

This translates into buying very inexpensive properties.  Houses that can be bought and fixed up for $30,000 or less and will rent for $750-$950 per month match up well to being rolled into commercial loans.

This is why smart real estate investors from across the nation are turning to Michigan foreclosures and properties in other areas that can be had for a bargain price.  The financing is still there to keep buying more properties while prices are at record lows.  Higher priced areas across the nation still have average values well over $175,000 even after year-over-year price drops and are not able to cashflow on a commercial amortization basis.

So if you want to buy a lot of properties at great prices that cashflow well in a short amount of time, then real estate investing in Michigan foreclosures is the way to go.

Michigan foreclosures offer a unequalled amount of equity and when price is compared against area rents it’s easy to see why smart investors from across the nation as well as Europe and Australia are buying houses here while prices are low.

Further more, with new methods to collect rent automatically each month and great property managements companies to take care of the occasional leaky faucet; it’s easier than ever to invest from afar.

Do some research and I’m sure you’ll agree that Michigan foreclosures may be just the type of alternative investment you are looking for.  It might even be able to help you turn around the losses the stock market had dealt to your other investments and get on track where your finances and retirement goals are concerned.

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Brian Kurtz is a licensed Realtor who invests in Michigan real estate and shows people nationwide how they too can take advantage of the unique Michigan foreclosure market without ever leaving their own home town.  Sign up for Brian’s Hot List of wholesale investment properties at http://www.PremierRealEstateInvesting.com

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