All Forum Posts by: Annette Hibbler

Most investors are turned away by conventional lending institutions.  I would suggest you consider thinking outside the box where leveraging your condo would be easier.  What you have now is well worth holding on to in my opinion.  There are many hard money lenders out there with rates as low as 6% and as high as 14% plus.  Do your research, call them up and find out what their terms are.

Thanks everyone!  I really appreciate the great responses.  Before taking the "plunge" if you will as a real estate salesperson, I thought long and hard about the pros and cons.  As I moved through the course I realized the wealth of information I was being exposed to was more than I would have otherwise taken the time to learn.  Just learning state laws will definitely help us avoid pitfalls.  Learning the details about purchase offers, contracts, embankments, water rights, foreclosures processes, different types of mortgages, state auctioned property procedures, federal and state laws, etc.  They say knowledge is power.  That is certainly true of real estate.  When you know the rules, it's harder for someone to take advantage of you. Learning federal and state laws has made me realize that some of these things could get an unwitting investor in hot water pretty quickly.  For instance, in Michigan, an unlicensed person cannot sell more than five properties a year on his own.  This includes investment properties.  Last year, my husband and I set out flip goal to 10 for 2015.

As an investor, I am now able to go "behind the curtain" of the MLS and view more info on properties than the public. I am also signing up as a HUD agent and getting hold of those keys. This will allow me to visit and bid on my own investment properties directly through HUD.

I'll definitely keep you all up to date as my career as a realtor progresses.

Thanks.

JUST DO IT!  You are certainly on the right track.  Expect to stumble along the way but never stop moving forward.  You can TOTALLY do this!

Congrats, again.

Hi everyone, 

Just wanted to share my success in passing the Michigan real estate exam on the first try!  

My husband and I have been investing in Michigan for several years now.  Cities like Detroit are gold mines for investors IF you do your homework and have a reliable and trustworthy advocate right here (a must for long distance investors). We often hear from investors both nationally and internationally.  Many, in fact, right here on BP.  :-)

For Detroit, M investors, these are the most common issues we've come across:

• You take on a new property manager who is eager to take on your rental.  You pay a large set-up fee and after 3-6 months, rent stops, no communication, difficult to get a hold of.
• Your told the tenant's left and all goes quiet and later find out tenant has been paying PM in cash and the PM is pocketing the money.
• You pay for repairs and then hear little to nothing and receive no pictures to confirm repairs
• Your told PM is a licensed realtor (as per state and federal law) but in fact is acting outside of the law.  
• You agree with the management to pay monthly towards your property taxes only to find out your years in arrears and no payments have been made.
  
• When you do manage to switch to a new PM company, the old PM cannot produce leases current, PM has misplaced keys, tenants deposit has miraculously disappeared, house was left "unsecured" and thieves have removed all copper plumbing from the house and/or there's a squatter who's taken up residence.
  

Only a licensed real estate person can legally manage other people's property. If they are not an Associate Broker or a Broker, you must obtain written confirmation from their Broker that they will supervise the real-estate salesperson. Always ask for a copy of their real estate license and check the expiration date.  Also, only those who are registered members of the National Association of Realtors can be called a "Realtor" or a "Realtist".  This association holds each licensee to a higher standard.

We have helped many investor's, a large percentage of whom are international, try to sort out their investment property challenges. Most of them have experienced all of the previously mentioned and much worse still.  In fact, several have lost their properties to the city because they trusted their PM to pay the taxes.  

Personally, I've been through four property managers who were disappointing.  The good news there are some legitimate management companies who are not out to rip you off.  We finally found one we are actually happy with! Here's why:

- Does NOT charge me an upfront set up fee

- Associate Broker for Keller Williams

- Charges for routine maintenance and minor repairs can be taken from rent so I don't have to pay money upfront

- The guy in charge of their maintenance and repair crew is a former building has over 23 years of experience in construction, home inspection and building maintenance.

- They are easy to get a hold of.

- They are very professional, contact me every week to keep me informed on progress of my most challenging rentals. 

- They are very knowledgeable and help steer me clear of "questionable" areas for future investments.

- They've also helped out a few BP'rs with their properties and I've gotten good feedback which of course, is a big deal to me.

I'd like to point out that although Detroit has the same challenges that any large city would have, the biggest issue is locating a legitimate PM who's not out to take advantage of a long distance investor.  A knowledgeable investor is better protected and knows what to look for in a PM, what documents to ask for (i.e. licenses), how to check on licenses and their status, etc. 

Have a super awesome birthday today! 

Oftentimes lenders will insert an "Alllienation Clause" that stating they can call the loan due and owning in full under certain conditions.  The most common being if you sell the property and transfer title.  However, read the fine print of each of your notes.  You may be able renegotiate payment terms when and if you refinance.

Terrible story but the buyer sites Zillow pics that were date stamped, shouldn't that have raised some red flags when permits didn't show up?  Also, why didn't the inspector see the illegal vent pipes under the kitchen sink? Didn't he check all the outlets? Aren't there supposed to be a certain number of vents per wall space? Why didn't he pick that up? Can he hold the inspector liable?  I would demand my money back for that one.  

How about the broker/agent? It could be argued that broker/agent deliberately committed fraud by hiding latent defects and encouraging buyer to sign a disclosure waiver, thereby, placing buyer in a very vulnerable position. Agents are held to a moral code by their associations (NAR) and brokers assume the risk of an agent's actions. Agents has the duty to provide third party (i.e. buyer) with disclosure of all material facts. If buyer can prove that agent worked with seller to cover up violations and thereby place buyer's life in jeopardy (due to many code violations) he may have another alternative.

My husband and I are in the midst of getting our REA license in Michigan.  We paid $250 each through Keller Williams.  They have a very good reputation for excellent training and work well with investors.  Call on brokers in your area and ask who they recommend and how much they charge.  $600 seems a bit extortionate.  Also check your state's REA association as they will often recommend a training program.  Shop around first before you pay a dime.  

We decided to obtain our license because of we needed greater specialized knowledge and access to MLS information not readily available to the public. REA agents are often privy to new listings before they hit the MLS, owner information, new listings and most of all easy ACCESS to investment properties. REA agents are the only ones able to bid on HUD homes where you can get a very good bargain.

In my humble opinion, the benefits outweigh the cons.  However, it doesn't stop at just getting a license.  In most states, you must be associated with a broker in order to work as a licensed agent.  Broker's will often charge you a monthly office fee for use of their facilities and equipment sometimes this is optional but other times not so much. Commissions vary from one broker to another, so keep that in mind as well.  On behalf of brokers, they take on a huge responsibility and risks for each of their agents.  They can be held legally responsible for each agents words and actions.  So, it's in their best interest to teach you well after you've passed the exam.  Yes, that means even more training is involved.

I love real estate so this was the logical choice for me.  I've already learned a great deal about different types of contracts, legal terms and laws that affect investors that I was previously ignorant of.  Ignorance doesn't hold up in court, by the way.

Hope this helps!

@John 

@John Knappmann Seems you're the only one here on BP willing to post. Wonder why so many are reluctant to rate their Detroit Property Manager.  Good or bad, lets here it, folks...