Michigan Real Estate, BOOM or BUST!?

Question

I live in Michigan, and the housing market is so damn competitive real estate blogs calling it “absolutely crazy”. Listing rising by double digits for every offer, and I heard something about our market rising 40%. I see my city growing every single day with new built neighborhoods, and new built condominiums. The thing is in my 21 years of living here I’ve never seen Michigan valued this high and never seen the scene so competitive (I feel like I’m living in Texas right now). Should I wholesale deals even when the comps are questionable? Or should I expect a bubble being formed and wait for it to bust? This is like Real Estate innovation for us, we are setting the bar higher but we don’t know how high?

Yoann Dorat · Answer

@Andres Garcia great question.

We’re wholesaling 95% of our deals in Michigan in the current market conditions, and when the market come down (probably somewhere mid-2022) we’ll buy and hold as rentals.

However if you buy it right, have a good long term financing in place and can weather a few years of downturn there’s opportunities in every market.

Dylan Tanaka · Answer

If you buy at deep discounts and move quickly you'll make money in every type of market.

Account Closed · Answer

@Andres Garcia, we are seeing the same craziness in Vegas. Our prices are up about 20% in the last 4 months alone. I personally put an offer on a guard gated house in Henderson, NV listed for $719k. After learning there were over 15 offers I increased my offer to $755k. The house is selling for over $800k. Crazy.

Landon Bleau · Answer

Andres, great question that every investor in the US is trying to figure out right now. Is there a crash coming? If so, then when? How much of an adjustment will we see? Real estate is something that has a proven track record of weathering storms, just make sure you have a property with a great tenants that cash flows and adequate reserves.

Dylan Tanaka · Answer

@Andres Garcia we are buying/offering on everything based on SOLD comps, not the froth above them.

Drew Sygit · Answer

There are still a lot of wholesalers operating in this environment, so they must be doing something right.

Andres Garcia · Answer

@Dylan Tanaka How do we know if it’s a deep discount, when the property is being sold at 80k and the comps around it are also lower if not 10k higher. Is it a strategy to bank on “growing” neighborhoods? And how would we justify if that neighborhood would grow. I think the only option i have to wholesale anything in this competitive market is D4D because houses on the market are getting snatched up and offer flowing in above market value

Michigan Real Estate, BOOM or BUST!?

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