People are getting “taken for a ride” left and right these days with all the cheap foreclosures you can find nowadays, so make sure you’re careful.
Related: Average House Price in Detroit Going Up… What Does that Mean for Investors?
Before you go buying foreclosed homes in Detroit for sale, you might want to take the following precautions first.
You need to plan for everything; from the schedule your rehabbers are going to be working on the property, to planning for “a rainy day (literally).”
Having your rehabbers on a specific schedule helps you in multiple ways:
For one, it’ll improve your chances of the rehab going smoothly.
With a structured schedule, your contractor is less likely just show up and take hours or days off when they feel like it.
Secondly, having someone at the property on a regular basis will help deter potential thieves and vandals from messing with it.
Finally, this can also help the neighbors know exactly when to look for suspicious activity, to help protect your property.
Related: What Everybody Should Know Before Buying Property in Detroit For Sale
But back to the rainy day part.
In case there’s bad weather, and it rains, what are you going to do, assuming that the roof needs work?
Yes, you could plan to have the roof work done first, but what if it
rains before the contractors start working on it, or while they’re in the midst of fixing it?
Make sure you have this planned-out in advance.
Don’t rely solely on the contractors to make the proper adjustments.
Make sure you and/or the contractor has the proper materials already on-site in the event that you run into some unexpected bad weather.
A bad weather day that’s not planned-for for can add thousands of dollars to your costs, and will eat your profits quickly, so be careful here.
Remember, it’s your property, and no one is going to care about it like you are.
Get the Foreclosure Inspected!
And don’t just rely on the inspection that the city of Detroit does before you get the go-ahead to close on the house.
Back in the day, I had a “handyman” do a walk through of a foreclosure for me before I bought it.
After his “inspection,” I was under the impression that all it needed was some good ole “paint and carpet.”
I could hear the cash register ringing, baby! Jackpot!
That doggone house ended up having electrical, plumbing, AND roof problems that I didn’t know about until I closed on the property and started working on it.
Related: Buying a House in Detroit? Don’t Make These Mistakes…
Not to mention there was freakin’ “asbestos” in the basement!
I had to spend another (unexpected) $1000 on getting the asbestos removed alone!
When it was all said and done, I had nearly $8000 in unexpected repairs.
I felt like an absolute idiot, and rightfully so.
Be Aware of Market Demand
Attention investors! Before you go buying that 2 bedroom, 1 bath framed house, you might want to become familiar with what the standards are in Detroit, from a demand standpoint.
People in Detroit (both renters, retail buyers, and investors) tend to look for homes with at least three bedrooms that are brick.
Knowing stuff like this will improve your chances that you find a renter and/or end-buyer for your property, to prevent unnecessary holding costs.
Leverage Realtors for Market Info
If you’re in doubt about what’s going on in the market, ask the realtor you’re dealing with.
Before you even make an offer on the first property, make sure you know the market needs.
OK, all this reminiscing on my past mistakes is making me depressed. I’ll pick up where I left off in part two.
I’m gonna go get a drink. LOL.
Click here for part two.
Seriously, though, if you have any tips to share on buying foreclosed homes in Detroit, feel free to leave a comment below!
Looking to buy or sell your home? Give us a call, or shoot us and email using the “Contact Us” link at the top of the page.
To your success,