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Letitia Patterson-Investor Agent

Your Best Source for Metro Detroit Investment Property - 248-506-9426

By Letitia Patterson | Agent in Detroit, MI

Why Cash Flow Beats Appraised Value Like a Playground Bully

Which is more important? Cash Flow or Appraised Value


Every day, we get the same question from Investors: "That's a nice property, what is the appraised value?"

Secretly, we give the serious side-eye, cynical look of scorn and skepticism when this comes up.

Trying to assess the appraised value of a property in a depressed financial market is like trying to figure out why we have a Electoral College. Or why Donald Trump's hair still looks that way. Or.....I could go on.

During the financial crisis, there was very little mortgage lending actively taking place in Metro Detroit. The criteria for an approved loan ruled out a great majority of the applicants, even ones with great credit.

So, condition 1: Tight lending criteria

Then, foreclosures flooded the market. 
Now, properties that sold for $100k or more at one time, were offered at rock bottom prices. This made cash purchases much easier and more prodigious in the area.

Condition 2: Very cheap foreclosures sold

Finally, as the dust settled from the sub-prime mortgage bust, underwriters began tightening the guidelines even more.

So, no loans given, foreclosed properties bringing the market down = A Very Bad Value  Situation.

What's better? Cash Flow

Cash flow is a much better determinant to consider as a purchasing condition because whether values go up or down, the property is still pumping out cotton-candy flavored money. Mmmm mmm mmmm.

This will insulate real estate investors from deep market fluctuations - whether it's up or down, the property still produces!

Need properties that ooze income? Give us a call!

Good Luck and Happy Investing!

Letitia Patterson is a licensed Realtor in Michigan and certified Investor Agent Specialist. She has sold hundreds of Investment Properties to Investors from all around the world and  loves helping them invest wisely for immediate cash-flow, as well as long-term gain. Letitia's mission is to help make Real Estate millionaires!

Letitia N. Patterson

Office: 248-905-1531
Cell: 248 506-9426
Email: myrealestateteam1@gmail.com



By Pat and Steve Pribisko,  Thu Nov 29 2012, 16:54
I can't say it any better. Spot on!
By Kerry Lucasse,  Thu Nov 29 2012, 17:32
Excellent post -- and cute logo!
By Jennifer Ratcliff,  Fri Nov 30 2012, 07:12
Great blog! I totally agree.
By Letitia Patterson,  Fri Nov 30 2012, 07:38
Wow! Thanks guys!
By Spirit Messingham,  Thu Dec 27 2012, 11:06
Good blog, thanks for the information.

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