Planning your community

“Now entering Harrietta, A zoned community.” In driving to a wedding last weekend I passed through this quaint town and saw this sign at the city limits. Working in a development company and growing up in the real estate business, Zoning is something that I have been very familiar with. I can’t count the amount of times I have heard, Unless we can get the zoning needed, we will not be able to purchase this property. From a purely profit standpoint, the zoning can have one of the greatest impacts on the value of a piece of property. Even with Location, location, location, being the mantra of real estate investors, if you have a prime corner, and the only thing you can put on it is a single family home, the piece of property is only going to be worth 25% of what the house will sell for completed. Had this piece been zoned commercial, you could sell it in some cases for hundred’s of thousands more.
I had the opportunity to attend a workshop last week with many of the local officials on planning and zoning boards from Ingham and Eaton counties. This was a three hour workshop on the basics of planning and zoning from the government side of the business. Forsberg for the most part has had excellent experiences working with many of the local municipalities and has built many projects that have been win-win for the different communities, and for our company. Occasionally there have been some head-butting, but in the end things have always worked out. Seeing how zoning is put in place gave a little bit different perspective to how our communities work.
When you see a sign on a town that states it is a zoned or planned community, most likely it has had a Comprehensive Plan or sometimes known as a Master Plan put in place. This is an official document that is authorized under Michigan law. It has many components, and in many ways, could be looked at as the business plan for a community. If you really want to see where your community is heading in the next 10 to 20 years, this is the document to look at. It will tell you what the community planners are expecting for the municipality. According to the Michigan Association of Planning, the compnents of a Comprehensive Plan is as follows; a Transportation Plan, Housing Plan, Land Use Plan, Recreation Plan, Facilities Plan, and Sub Areas Plan. I will go into detail on these sections in later posts. Interacting with the officials, and learning what they do about putting these documents together was a great experience. If you are interested in real estate investing, this is a good document to look at to see what types of investments that a particular municipality is looking for. Talk to the planners about what they want to see for growth, or rehabilitation in their communities. For more information on the Michigan Association of Planning please go to www.planningmi.org . Have a great holiday.

Happy Thanksgiving

I apologize for not posting in the last week, but I have been out with a severe cold. I will try to post the recap of the Michigan association of planning meeting that I went to last week. Being on the development side of the business, it was very interesting sitting in a class that was designed for governemnt officials on how to design a master plan for a community. I will also have the podcast up of my interview with a first time home investor by Monday next week. I am really excited with these upcoming stories for the week and I hope you find them interesting and educational. If you have any topics that you want covered, please email me at brent@lansingrealestate.com, or post a comment. Thanks and I look forward to hearing from you.

Trespassers Beware!

Many times in Michigan we hear of property rights disputes involving where bodies of water and private land meet. Over the years there has been a lot of case law involving riparian rights. This website seems to have a lot of information regarding property rights for land owners adjacent to a body of water www.mwai.org . There is a large section of the rights of property owners and a list of cases regarding this issue.
Being a sportsman, respect of land and property is something that has always been very important to me. As more and more land is developed and purchased privately, it is getting harder to find large property for enjoying outdoor sports. Michigan has done a great job in developing its parks, and heading to the areas in the more rural parts of Ingham, Eaton, and Clinton Counties, there are tracts of State land available for use by Residents. I am bringing up land rights issues due to an incident that happened on our property behind our office on November 11, 2007. A gentleman was given permission to hunt the property with a bow, and harvested a 10 point buck. The animal ran onto property owned by a utility company. A neighbor adjacent to the utility company’s property confronted the hunter stating that he had illegally taken the animal and removed the head of the deer and took it. The neighbor had stated that he leased the property from Consumers Power. Here is the link to the article posted at WILX TV
www.wilx.com/home/headlines/11227326.html . This seems highly unlikely since several people have pointed out that Consumers Energy does not lease there property. So whose deer was it? According to the “Tagging Big Game and Furbearers” Section of the Michigan Department of Natural Resource’s Hunting and Trapping Guide. “It is unlawful to tag and animal you did not legally kill.” So even if the Neighbor did tag the head before he took it, he would still be in violation. Leaving the game laws out of, it brings up questions of property rights. If the deer had fallen on Mr. Wisniewski’s (AKA The Neighbors) property and he would not allow the hunter to retrieve it, the animal would become the State’s property. This is due to trespassing laws of Michigan. “MCLA 750.552 is the general state statute for trespass. This statute prevents anyone from trespassing upon the premises of another after having been forbidden to do so.” According to Attorney Clifford H. Bloom in an article called Trespass! Posted on the mwai.org website above, since the hunter would have been prevented from entering the premise, and the land owner could not tag the animal, an officer would have to confiscate it.
Now the question becomes since the property was not posted as private, when the hunter went on the property to retrieve his animal, was he in violation of any laws. He had never been forbidden to enter the property either by signs on the property or by any individual. If I am reading how the statute is being interpreted by Mr. Bloom, it would seem that he had every right to enter the property, especially since he thought he was still on the property he had been given permission to hunt. He had no intention of trespassing on someone else’s property. The DNR is currently involved now, and it will be interesting to see what the outcome of this incident is going to be. If you have any comments or know more about the laws involved, please leave me your comment.

Sellers Market Unhealthy, Unprecedented time for buyers

We saw more bad news in the papers last week with foreclosures rising 54% in Ingham County. New homes being started in the area through the third quarter are also down over 40%. Currently in Lansing as of today there are 5117 houses available for sale according to the MLS. Using the average of 366.5 sales per month year to date, this would mean we have almost 14 months of inventory currently on the market in the Greater Lansing area. It is no secret that the market has switched from a sellers to a buyers market.
Believe it or not this is one of the best times in the history of real estate for a buyer to purchase. The last time Lansing’s building permit numbers dropped this low was in 1982. Interest rates were through the roof and it was extremely difficult compared to today to get a mortgage. Even with the tightening of the market, there is a program for just about any one looking for a loan. I have seen some unbelievable deals on homes that have sold in the last few months. There are many different incentives and just regular price reductions that are going to allow many people who purchase right now a chance to have large equity positions in property in the future. We just came off of the longest run in housing growth in US history. Metaphorically, the new years party ended and it is currently mid morning Jan. 1st and the hangover is really setting in. Some people really tried to play the market, especially in some parts of the country were there was 15%-30% gains per year in housing value. They jumped in at the end and are currently getting burned. Michigan’s real estate market isn’t healthy if you are a seller, but in very few instances are the consequences of purchasing a home in our hottest markets of 2004 and 2005 going to have as much of an impact dollar wise as someone who purchased in Florida or California. One thing I will guarantee you, in the future, real estate will be more valuable than it is currently. I don’t have a crystal ball to tell you how to time the market and I don’t think that we are going to see the type of market we saw a few years ago for quite some time. Our area was overbuilt, financing got a little aggressive, and it is going to be hard for a while for some people to be able to get their money back out of there homes. However, we are seeing signs of the market stabilizing.
I have accumulated the building permit data for the area for the last 30+ years. It is easy to see to see the trend of the growth and then a sharp drop off for a few years. This would coincide with the existing home real estate market as well, since new homes are primarily needed when there is growth in an area. The easiest way to track new home growth is by looking at the employment growth in an area. The more job growth the more new construction that can be absorbed in a market area. Looking at jobs in the Greater Lansing area from 2000 to 2007, there were 10,000 jobs cut out of our market. This data was not seasonally adjusted, but it still shows a downward trend which would create a situation where existing housing stock would be in over supply, let alone adding new homes. New construction permits pulled were at record highs in 04-05 which has now caught up with us. The good news, we have seen employment numbers stabilize over the last year. This is a good sign for the market, because we should start to see our local market stabilize over time. For buyers right now, if you need a home there has never been a better time to find a good deal on a piece of property. When the market does stabilize and we start to see growth, people who purchase now are going to have the best chance of being in a great equity position in a few years. If you are thinking about real estate investing, now is the time to start researching properties and neighborhoods to learn values. With foreclosures at an all time high, interest rates at an all time low, and the new job announcements in Lansing and the surrounding area this market is showing signs of being healthy again faster than many of the other areas in Michigan. If you are interested in seeing what properties are available right how, please visit my website www.lansingrealestate.com, click on listings and MLS. You can either search properties my company currently has listed, or search all listings in the MLS by clicking on the MLS button in the upper right corner. If you are interested in government foreclosure homes, check out www.homesales.gov. This will give you the list of all the government foreclosed properties in the US. For strictly HUD homes in Michigan here is the link to Michigan broken down by cities. http://sales.clfres.com/SelectCities.aspx?State=MI&DollarExclusive=Y
If you are interested in viewing any of these homes, or have any questions regarding real estate investing or purchasing, please post a comment, or email me at brent@lansingrealestate.com. I will also be posting some of the podcasts that I listen to regarding real estate investing and real estate in general, as well as links to other sites I find useful.
Please let me know what other good sites are out there, I am always looking for more information. I am working on setting up to interviews regarding real estate investing. One from an investor that just purchased and flipped his first piece of property, and one from a gentleman who has been buying flipping and renting properties for quite some time. I hope to have these within a week.

Learn how land planning and Development is done

As development and land use become an ever more heated topic in the United States, many people have questions as to how different decisions are made. Ingham county residents will have a chance to take a workshop to learn how planning and zoning works. This would be an excellent class for anyone interest in learning about board procedures, or just curious about getting involved in our region with development issues. The workshop is being put on by Ingham Economic Development Corporation. This group is dedicated to helping communities and businesses develop through education and links to local, state, and federal funding and other services. I am looking forward to attending this seminar to learn more about the process. The cost of $35 seems more than fair for this course. Here is the Link for Ingham Economic Development if you would like to learn more about them, www.ingham.org/DV/developm.htm . To register for this course, you can contact Susan at spigg@ingham.org or find out more at Lansing area events under the lecture and Seminar section. As always, with any question, or comments, please email me brent@lansingrealestate.com