Expert: Peter Liebert, SIOR - 7/18/2009

Question
Dear Expert

    I never owned property before. I just have been using master card for over 15 years. I know I have good credit because I was never negligent on paying my bills or my monthly rent checks, and I never had any debt problems because I am a money saver. I do not know my credit score, for I never applied to purchase any house or property before. I think my score is fine. The U.S. Department of Defense had to check my credit in order to grant me my security clearance, which I was qualified to receive. If I buy something, I will be first time property buyer. At this time I am working overseas.  I do not know when I am going back to the states because it is up to the company that I work for, but I can have up to 2 weeks vacation time every year, so I can make a trip for one week or two to visit every year.

    I am 33 years old single financial security seeker, who likes to plan to build a solid financial future before starting a family. I want to transform some old limiting patterns and choose new and more creative options. When I return to America, I will be going back to my mother's house located in Michigan. Before or after my arrival to the states, I will need to embark on something different to start moving forward and get settled. I will need to do something that can provide me with stable income, but I do not feel comfortable to buy property.  My mother bought a ranch house 15 years ago for $144,000. She spent another $12,000 for basement remodeling and she was trying to sell this house for the past 8 years, but she still cannot get any buyers even after reducing her original price to $120 thousand; however, if my project can generate nice profit, I might consider doing one of the following ideas:   

    Renting or buying a ranch house and finding some roommates who can help me with expenses, or getting a duplex home and living in first floor while putting other tenants upstairs, so I can receive monthly rent from them, or buying a property and putting it under section 8, or condo, or motel, or apartment building, or any other idea that can guarantee a successful and stable monthly income flow. I also like to invest in real estate and stock market, but I do not have any experience in all of these projects.

    Is there will be a big difference whether I start the project next year versus if I start it 2 or 3 or 5 years from now? Is the difference advantage or disadvantage?  I do not have a specific area in mind, but I will need an area where it can help me generate profit as soon as this project is ready for work. Please send me any ideas you may have, so we can think together to produce good results.

Thanks for being a volunteer to help.

Answer
karam, a few ideas:

1. Michigan has approx. a 20% unemployment rate, which with our current Congress out of control on piling up USA debt the rate will probably grow past 20%. States are looking at less tax revenues and potentially more burdensome healthcare costs.

2. My view of housing in Michigan would start with subsidized housing for the elderly, student housing near a university or rental housing near a military base (probably the safest bet). The duplex idea would work for any of the three. Whichever has properties available with a decent rate of return based upon one year leases should be looked at.

3. Try Loopnet.com for a search. You might also contact a Realtor in the town that you expect to move to and ask them to be on the lookout for any foreclosures or good deals. They can email the info. on any properties and over a period of time, you should get an idea of what the market is, what has sold, what has not sold, etc..

4. Make certain that you get title insurance on any property that you buy. The title company will do a search to make sure that there are no unpaid liens on the property that you could get stuck with if the seller only has a quit claim deed.

5. Think about getting a State real estate sales license. Courses can usually be taken online wherever you are. The course content will give you an idea of what is involved with residential, commercial or other property as well as what an appraisal should contain.

Best of luck!