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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 Invest in Real Estate? Because $1.62 Million in 10 Years, That's Why!

    Posted Under: General Area in Detroit, Home Buying in Detroit, Investment Properties in Detroit  |  June 16, 2014 12:29 PM  |  3,711 views  |  No comments
        I was floored this weekend by a story I heard from infamous professional boxing fixer, Charles Farrell, who told the disastrous story of the time he didn’t fix a fight involving former heavyweight champ Leon Spinks.   

        Leon Spinks, despite having knocked out Muhammad Ali, won the Olympic gold medal in boxing, and made several million dollars as a boxer, was in a steep professional decline. 

        He was broke and had been reduced to fighting amateur boxers with bad CAT scans just to earn the right to fight in larger, more prestigious matches that didn't even pay 1/10th of his former salary.

        This particular fight was supposed to be fixed for him to win, but he lost to an unknown boxing amateur and ended up dead broke.

        The kicker?  He was so poor that he had to ask Charles Farrell for $5 just to get a bite to eat .


    Here's the ugly truth that professional entertainers, celebrities, and even common folk alike seem to miss:

    ASSETS put money IN your pocket

    LIABILITIES take money OUT of your pocket

        

    So what should a celebrity do with the money being thrown at them? For God’s sake, don’t buy a helicopter!  

    What should regular investors, as well, do with money? Skip the boat or the new car, and first think about investing in real estate.

     

    Take a look at this example:


    If you invested in a simple multi-family property producing $1500/month in passive rental income, you’d have roughly $18,000 after one year’s time. 

    NOT exciting, right? Right. In fact, it’s dead boring. 


    Here’s where it gets interesting:


    If you bought 2-3 of those a year, that would be about $54,000 in income over one year’s time.

    Ok, a little nicer, but still yawn-worthy.

    Hang on, we’re headed somewhere.

     

    Let’s imagine that you held these 3 properties and just added another 3 properties each year for the next 10 years.

    Ready? This would be a whopping $1,620,000 per year in income as long as you held the properties! 

    Who needs to get punched in the face (or punch a dreaded time clock anymore) with that!?

    The time factor is what allows the smart real estate investor to win.

    Compounding profits over time makes the difference between continuing to collect millions long after the end of a career, or barely getting by after a career peak.

     If investors choose the right properties and hold them over time, the returns become endless.   This strategy creates cash flow, an incredibly strong financial base and a wealthy financial legacy for your future generations.

    So, time, patience and steady investing wins the game....or the match. :-)


    Good Luck and Happy Investing!

     

    Need help finding incredible investments? Give us a call. We love helping investors find the best investments for their portfolio.




    Letitia Patterson is a licensed Realtor in Michigan. She has been licensed since 2006 as a realtor and worked previously in residential and commercial mortgages since 2001.  She has trained hundreds of mortgage bankers and enjoys sharing her knowledge with investors. 

    She currently holds certifications as a Certified Investor Agent Specialist and Certified Foreclosure/Short Sale Resource.

    She has sold hundreds of Investment Properties to Investors from all around the world and loves helping th
    em 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
    (la-tee-sha)

    MI Elite Realty

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

  • To Auction or Not To Auction- That is the Question! Detroit Auction Props Starting at $1000 Part I

    Posted Under: General Area in Detroit, Home Buying in Detroit, Investment Properties in Detroit  |  May 28, 2014 11:04 AM  |  6,264 views  |  No comments
    The City of Detroit is sponsoring auctions of vacant properties and some of the prices start as low as $1000!

    Seems too good to be true, right? Yep, it is.

    The reality in real estate is always: If It Sounds Too Good to Be True- It Definitely Is!

    So, when you see the City of Detroit advertising these beauties starting at $1000, you must know that something is amiss:



    What's the real story here?

    Well, Detroit has a huge surplus of vacant residential properties and they desperately need attention.  And by surplus, we mean approximately 78,000 parcels.

    So, in an effort to rid the city of some of these homes, as well as kick some neglectful landlords in the rear, homes are being auctioned off to the public.

    Any effort similar to this always brings a ton of attention and interest from all around the world.  That interest causes normally sane real estate investors to abandon all sound business thinking and adopt what we affectionately call: Auction Brain.

    Auction Brain is a result of a culture formed by eBay, craigslist, and other Internet phenomenons that make practically worthless items more attractive by making people bid on them. 

    Normally, that hideous lampshade/faux designer shirt/old worn pair of shoes won't get a second look.  However, because someone else wants it, and as a bidder, you are competing against other bidders, that practically worthless item becomes a must have!

    The same rule, surprisingly, applies to real estate auctions. Investors get completely carried away with the threat of losing a property they were only mildly interested in.


    Auction Brain then takes over, and we overbid just because we can't have it.


    Auction Brain is especially dangerous with investment property because the purpose of the property is to cash flow and produce a significant return on investment


    When the price goes extraordinarily high, this limits the potential return.  Additionally, if repairs are required, this destroys all hope of a profit whatsoever.

    Recently, in a few of the City of Detroit auctions, we'd see properties with the following scenarios:

    Starting Bid: $1000
    Repairs: $15,000-18,000
    Area rents: $650-750/mo

    After the bidding was completed, the final purchase price was $32,000!


    Let's look at the numbers on a deal like that:

    Purchase Price: $32,000
    Repairs: $18,000
    Total Invested: $50,000

    Monthly rent: $750/mo
    Yearly Gross rent: $9000/yr

    Yearly taxes: $2400/yr
    Insurance:  $650/yr
    Maintenance: $900/yr (10% of gross rent)

    $8400/$50,000= 18% Gross Return on Investment

    Net return after taxes, insurance, and management would be about 10%

    In a perfect world (meaning no vacancy, no interruptions in rental payments), the yearly return would be ok, but
    if there's one slip up, the return goes down drastically.


    What's the alternative to Auction Brain?  Stay tuned for Part II




    Letitia Patterson is a licensed Realtor in Michigan. She currently holds certifications as a Certified Investor Agent and Certified Foreclosure/Short Sale Resource.

    She has sold hundreds of Investment Properties to Investors from all around the world and loves helping th
    em 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
    (la-tee-sha)

    MI Elite Realty

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


  • Investor Super-Deal of the Week: Inside Scoop on a Great Win-Win Investment

    Posted Under: General Area in Detroit, Home Buying in Detroit, Investment Properties in Detroit  |  May 27, 2014 9:42 AM  |  6,423 views  |  No comments

    Last week, we got an urgent call to save a deal in progress that lost a buyer. So, we ran the numbers and ended up finding what looked to be a pretty good deal on the surface. 

    This property is a 3 bedroom brick home in an idyllic neighborhood on Detroit's East side. Yes, idyllic neighborhoods still exist in Detroit IF you know where to look.

    The price was only $30,000 and the buyer was putting $3000 down immediately because they wanted to purchase the property.  Additionally, the rent was $900/mo and the lease optioner was taking responsibility for taxes, insurance, and maintenance!

    This was too good to pass up, so we moved in immediately.

    Here's the breakdown on the return:

    Purchase Price: $30,000
    Monthly rent: $900/mo
    Lease option down-payment: $3,000
    Gross Annual Rental Income: $10,800/yr

    *Lease option tenant pays taxes, insurance and maintenance, so no extra expenses there

    Gross Return on Investment: 40%

    Cash on Cash Return: 40%

    Lease with option to buy term: 4 1/2 years


    BENEFITS (the roses) 

    The biggest benefit to this type of deal is that the owner doesn't have many of the typical burdens that come along usually with investment property, specifically taxes, insurance, management, and maintenance.

    BIGGEST BENEFIT: Because of the way this deal was structured, the total amount to pay on the lease with option to buy was $48,000. That means after roughly 4 1/2 years, the lease optioner will own the property outright.


    DRAWBACKS (the thorns) 

    Don't be fooled- EVERY real estate investment deal has a few drawbacks. With this one, the term of the lease with option is only 4.5 years. After that time, providing that all of the payments have been made and terms are kept, the tenant will own the property, so the investor will need to find a new investment property. 

    Keep in mind that the investor has nearly doubled their investment, so it's an absolute win-win.


    What happens if the lease optioner doesn't pay?

    Well, the same as in any situation when a tenant doesn't pay, the action to evict and take possession of the property begins.

    In essence, the investor will have made a hefty lease option fee, an above-average rent, and enjoyed very little headaches in the process.


    It's important to note that these type of deals happen once every blue moon for an investor. 


    However, when you are engaged and looking with a focused team of investment pros, you've got a much better chance to take advantage of excellent opportunities like this one.


    Need help from an excellent investment team? Well, we just happen to know a few good people :-).





    Letitia Patterson is a licensed Realtor in Michigan. She currently holds certifications as a Certified Investor Agent and Certified Foreclosure/Short Sale Resource.

    She has sold hundreds of Investment Properties to Investors from all around the world and loves helping th
    em 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
    (la-tee-sha)

    MI Elite Realty

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



  • Detroit Investor Question of the Day: Bulk Property Purchases

    Posted Under: Home Buying in Detroit, Property Q&A in Detroit, Investment Properties in Detroit  |  March 3, 2014 10:23 AM  |  34,278 views  |  No comments
    Here's a question submitted online recently from an investor:


    I want to buy a block of homes that are vacant in need of repair for sale cheep in Detroit. Where do I start?




    Our Response:

    Hi, right now there is a plethora of very inexpensive properties that need repair selling for around $1-5k per door.

    However, keep in mind, there are always serious questions to consider when purchasing fixers uppers:


    1. What is the exit strategy for these homes?

    Real estate has 1000 moving parts, and once the machine starts up, you'll need to handle each one. Clearly knowing the end goal is essential for having the best and most profitable outcome.

    So, one important question becomes: What will be the income-producing activity for these properties? Will I fix and sell? Buy and flip? Buy and rent?

    Knowing how you will put the properties to use and what the purpose for each investment property will be, can instantly clarify a great deal or not. 



    2. Is your business model based on actual market data?

    The beauty of real estate is that there is very little guess-work needed.

    Nearly all properties sold or rented are tracked via public records, MLS data or some other info source. So, ask yourself, do I know FACTUALLY what the average sale price or monthly rental amount for the area? How can I verify this independently?

    Usually, when you apply data, the picture is not a rosy as the theoretical model, but it's much more realistic and safe.



    3. What is the amount of crew and personnel needed to handle these properties?

    How many contractors, handymen and construction people will be needed to rehab each property you're considering? How long will it take?

    How much will it be? (IMPORTANT NOTE: Each property is UNIQUE- no matter how much you try to make them cookie-cutter, unless it's new construction, all real estate is different. So each will have different rehab needs and be in different states of disrepair.)

    **Important rule of thumb: The lower the price, the higher the repair****

    How many property managers will be needed per block of properties? Are they reputable? Can they show you their current roster of properties?

    **Get more than one estimate!***



    4. What City Inspection, Building Permits, and or licensing is needed per property?

    If you skip understanding that even junky properties have building and safety standards by each city or municipality, you're operating without a full understanding and will surely encounter complications when you try to rent or sell the properties.

    Usually, the city isn't interested in a home's permit status until you want to purchase it :-). Know what's required by law BEFORE buying.


    5. What are the outstanding taxes, liens, water charges, etc.?

    Taxes, water and other assessed fees show up as clouds on the title, which make ownership or transferring ownership difficult. Even if you choose not to address any outstanding issues, at least be aware of what the issues are, as they may drastically affect you.

    For instance, it's ok in some cases to purchase properties with outstanding taxes- depending on what you'll use the property for and how deep of a discount you get for doing so. However, after 2 years, the county may foreclose on the property for unpaid taxes and you can potentially lose it!



    Remember, this is your hard-earned money that you'll be investing. There are ALWAYS extra, hidden costs with real estate. If you can get the right advice and strategy going in, you can save yourself a TON of time and headache.


    If you need help with investment strategies, give us a call!



    Thanks, good luck and Happy Investing!



    Letitia N. Patterson
    (la-tee-sha)



    MI Elite Realty

    Certified Investor Agent Specialist
    Certified Short Sale and Foreclosure Resource
    Licensed Realtor

    Letitia Patterson is a licensed Realtor in Michigan. She currently holds certifications as a Certified Investor Agent and Certified Foreclosure/Short Sale Resource.

    She has sold hundreds of Investment Properties to Investors from all around the world and  loves helping th
    em invest wisely for immediate cash-flow, as well as long-term gain. Letitia's mission is to help make Real Estate millionaires!



    Office: 248-905-1531
    Cell: 248 506-9426
    Fax: 248 504-5656
    Email: myrealestateteam1@gmail.com


  • Beat the Other Investors to the Punch: Instant Property Alert Sign-up

    Posted Under: Home Buying in Detroit, Investment Properties in Detroit  |  June 4, 2013 8:12 AM  |  116,471 views  |  1 comment
    Missed it again?!
    Good deals only last one day on the market, but the best deals never hit the market!

    Many investors and home-buyers are beat out of acquiring the right properties simply because many homes are sold privately before they are even listed on Trulia, ecstatic or the multi-list service (MLS).

    In order to be first in line for the best properties, you have to be in direct communication with your property sources. 

    Most times agents would rather sell quickly, so when a new property comes in for listing, if it can be sold in one or two days the agent and the seller are ecstatic. 

    Get the Best Deals First by signing up for our Instant Property Alerts. Email us at:

    Myrealestateteam1@gmail.com
    Subject: Property Alerts

    Be sure to include:

    1. Property type: single/multi/commercial
    2. Property use: investment/primary residence
    3. Price range
    4. Any special criteria
    5. Areas/location


    This will help us to know what types of properties are of interest and allow us to deliver them directly to your email inbox as quickly as we receive new properties that match.


    Good Luck and Happy Investing!




    Letitia Patterson is a licensed Realtor in Michigan. She currently holds certifications as a Certified Investor Agent and Certified Foreclosure/Short Sale Resource.

    She has sold hundreds of Investment Properties to Investors from all around the world and  loves helping th
    em invest wisely for immediate cash-flow, as well as long-term gain. Letitia's mission is to help make Real Estate millionaires!



    Join our mailing list or request Investment Properties

    Letitia N. Patterson
    (la-tee-sha)

    Office: 248-905-1531

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


  • Anatomy of A Great Deal: Recently Closed Metro Detroit Deals That Make Sense!

    Posted Under: Market Conditions in Detroit, Home Buying in Detroit, Investment Properties in Detroit  |  April 17, 2013 8:58 AM  |  128,803 views  |  No comments
    Here are a few great Metro Detroit Investment deals recently closed that we love:

               
    16000 Block of Gilchrist in Detroit
    Sold for: $25,000
    3 Bed Brick bungalow, 1000 sq. ft
    Tenant occupied: $800/mo rent
    Annual Taxes: $2680
    *Seller was motivated to sell quickly, less than $1000 in miscellaneous repairs

                   
                   

    20000 Block of Glastonbury in Detroit
    Sold for: $19,500
    3 Bed Brick Ranch, 1000 sq. ft
    Tenant occupied: $675/mo rent
    Annual Taxes: $2500
    *Seller moved out of state, needed to sell fast, loyal tenant, garage and minor interior repairs


    A couple of tips for getting the best Metro Detroit investment properties:

    1. KNOW YOUR NEIGHBORHOOD VALUES

    All Investors come into a market wanting to get the best homes and pay as little as possible.  This is unrealistic in almost any business- and it is in real estate investment as well.  Understand what paying less for a property will equate to in repairs and/or marketing time to get a tenant. 

    Always get recently sold comparable sales data within a 1/2 mile of the property you're considering and less than 6 months old.  This will help you understand the current market picture with no fluff.

    2. MAKE AGGRESSIVE OFFERS

    This isn't the market anymore where you can offer half of the listing price.   That hasn't been a reality for several years now.   Additionally, Investors face competition  from homeowners who will pay well over asking price because they only want to buy one home.

    Offer a little above asking price to make your offer stand out. Sometimes just a few hundred dollars will do the trick.

    Make your closing dates more aggressive as well. If a seller knows that you're serious and you can close quickly, they're much more likely to approve your offer.

    3. DON'T BE PENNY-WISE AND POUND FOOLISH

    All Investors want properties that are inexpensive, but make sure you're fully aware of how much it will cost in repairs, time spent making repairs and time spent to get a tenant . 

    There's a shortage of low-priced inventory in the market, which means that the lower-priced properties take more rehab work to get them in functional order.  Make sure you're calculating the time and effort involved when taking on rehab jobs and what that will cost in lost rent.

    Rental times may be 30-60 days.     It may make more sense to buy a property already cash-flowing and tenanted than start a new project from scratch.


    Need help finding the best deals?  Don't hesitate to contact our Team!




    Letitia Patterson is a licensed Realtor in Michigan. She currently holds certifications as a Certified Investor Agent and Certified Foreclosure/Short Sale Resource.

    She has sold hundreds of Investment Properties to Investors from all around the world and  loves helping th
    em invest wisely for immediate cash-flow, as well as long-term gain. Letitia's mission is to help make Real Estate millionaires!



    Join our mailing list or request Investment Properties

    Letitia N. Patterson
    (la-tee-sha)

    Office: 248-905-1531

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

  • Are Section 8 Homes "The Perfect Investment"? (with Video)

    Posted Under: Market Conditions in Detroit, Home Buying in Detroit, Investment Properties in Detroit  |  April 9, 2013 12:03 PM  |  131,780 views  |  No comments
                            Our Most Controversial Post Ever


    We know there will be a lot of flack from this post, but it has to be said:

    Section 8 Properties are Not For Everyone!

    I can't begin to tell you how many calls and emails we get from Investors who only insist on purchasing Section 8 tenanted investment properties.

    They somehow believe that these homes will be the perfect, stress-free investment. 

    News Flash: There's no such thing as a perfect investment property!

    Each property and investment model has its risks and rewards. It's important to understand fully prior to investing the potential upside and downside of each investment.

    The Section 8 housing program
    is a United States Department of Housing and Urban Developing (HUD) program that authorizes the payment of rental housing assistance to private landlords on behalf of tenants that qualify.

    It's based on the Housing Act of 1937 and provides many different housing and rental payment assistance programs.

    The program that affects investors most is the Housing Voucher program. A tenant, based on their family size and income qualifies for all or a portion of their monthly rental payments to be paid directly to the landlord from the local HUD office or other housing authority. 

    This gives investors the impression that the rents are guaranteed, thus making these properties "better and safer" investment homes.

    We brought in a very special guest to address this important issue and provide some insight.


    Meet Ronald D. Weaver. He is our resident Property Manager Extraordinaire. 

    Ron is the Vice-president of Management Systems, a Michigan-based corporation that has over 30 years of commercial and residential property management experience. 

    Ron is our go-to guy for all things management and he has much to say about the rude awakening investors experience with Section 8 properties

    Take a look at the video:




    At one time, Section 8 homes paid more than market rent and there was reimbursement for some maintenance and repairs.

    That's no longer the case and there's as much as a 30% overhead charge that's assesed each year:





    So, to recap:

    Properties with Section 8 tenants must pass the annual Section 8 inspection each year and any repairs required must be completed before rent can continue to be collected.

    This means that investors should choose properties carefully that are being sold with tenants on the Section 8 program and have a thorough inspection and repair estimate of the home.


                                    A Few Points to Remember
               
    • Get a thorough assessment of any current maintenance issues, as well as consider the life span of the major systems and overall structure of the home.

    • Interview the current tenant to determine their concerns, challenges and interest in remaining in the property before you purchase the home.

    • Verify the monthly amount of the tenant's housing voucher with the Housing Authority that issues that voucher. Request the HAP contract or other form of documentation that clearly shows how much is paid by Section 8 and how much is paid by the tenant.

    Section 8 properties, like any investment properties can be wonderful income-producers, but only if you are fully aware of what you're purchasing prior to investing.

    Good Luck and Happy Investing!


    To reach Ronald Weaver:

    Ronald Weaver Jr.
    Vice-President
    Management Systems Residential
    27503 Schoolcraft Rd.
    Livonia, MI. 48150



    (313) 687-4677 - Office
    (313) 790-3295 - Mobile
    ron@management-systems.com







    Letitia Patterson is a licensed Realtor in Michigan. She currently holds certifications as a Certified Investor Agent and Certified Foreclosure/Short Sale Resource.

    She has sold hundreds of Investment Properties to Investors from all around the world and  loves helping th
    em invest wisely for immediate cash-flow, as well as long-term gain. Letitia's mission is to help make Real Estate millionaires!



    Join our mailing list or request Investment Properties

    Letitia N. Patterson
    (la-tee-sha)

    Office: 248-905-1531

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





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