Budget Booster Tip: Get your property taxes reviewed and see if you are paying too much!

With the drop in property values in the past few years you may qualify to save some money on your property taxes. A homes taxable value is supposed to be approximately 50% of the fair market value in the State of Michigan. Depending on when you purchased, the yearly savings could be significant. The hard part is assessing what the fair market value is for your property. First question everyone has is, do foreclosures count as comparable that can be used in evaluating my house? Here are the guidelines directly out of a memo from the State to assessors for use this year in determining taxable value.

In my interpetation I would take this that Foreclosed properties are going to be allowed this year. Looking through the criteria most reo transactions contains most or all the 5 points listed. The only caviaut I would give is based on the condition of the property. If you are going to use foreclosed properties, be ready to give points and adjustments on the difference in condition of the subject home (yours) and the foreclosed property being used as the comparable. I will be posting more information on property tax assessments as we get closer to the property tax reviews in the second week in March. I will also be providing a service this year of handling property tax reviews for a fee. If you are interested in seeing if you have a case, email me at brent@taforsberg.com or call 517.349.9330 x206. I would be happy to schedule a complimentary sit down meeting at my office.

Thanks Marty for your effort on the 911 center

For those of you that don't know Marty Colburn, he is the city manager of Mason. I would like to give him kudos for his effort on trying get the 911 emergency center next to all of the other county services in Mason. Despite common sense of keeping all the county emergency services together, the is being moved to South Lansing. Marty put a lot of effort into this even though the deck was stacked against him before he started. I hope people in Mason who see Marty thank him for the effort. He still won by showing other governing bodies in the area that his city is organized has a vision for their part of the region.

Parade of Homes provides less homes than years past but doesn't disapoint

I am one of the lucky people that get to inspect homes in the Parade before it opens to the public. Even though there is just shy of 35 projects this year, the ones in won't disappoint. I viewed the homes in Okemos, Haslett, and Williamston this weekend. A couple of the models had been in the Parade before. They were still very nice and some of the decor inside had been changed up. Mayberry's home in Okemos is beautiful and I really enjoyed the counter tops in the kitchen. The cost is still $10 per person or $25 per family. Even Committee members and Home Builder Association Staff pay the fee to enter. Remember, the money helps benefit local charities.
Cindy at the home builders association stated that traffic was steady throughout the weekend, and was similar to last year at this time. "We are excited to see the housing market turning around and there are great opportunities still available for buyers. Be sure to stop by one of the Parade homes to pick up your ticket to see these great projects and support our local charities."
The market does seem to have made a turn, three of the homes I inspected all sold prior to the Parade this year. All of these were over $300,000. If you haven't been to the Parade before, it is worth the time to go around and see what local builders are creating in your town. If you have been in the past, just because there are less homes, don't let that stop you from going this year.
Here is a link to preview some of the Parade homes. http://www.obeo.com/Public/Search/AgentSearchResults.aspx?agent=119692&resultsonly=true&rpp=100 . Take a look and see where you want to start.

Is a foreclosure your best option?

You watch the news and see many companies downsizing and plants idling. Real Estate has all but been written off by the media. I even read in Newsweek that home builders have all but written off 2009. The word foreclosure is now the new marketing “Buzzword” for Realtors. You hear that word and you think, bargain. All around town I see real estate signs that actually say “Foreclosure” on it like it is a good thing. I had one realtor tell me he received a call on one of his listings from a sign and the first question out of the prospects mouth was “Is this a foreclosure, if it’s not I don’t want to see it?” The foreclosure has really come to the forefront of the current real estate cycle that we are in. The foreclosure market is also the media darling at this time, so is this the best opportunity for you?
Before you jump on the foreclosure band wagon you need to ask yourself a couple of questions. Is this worth the time investment that I will have, and is the money it take to complete the project worth it in the end? We will talk about exit strategies more in the next week. I am sure you have heard that just because something is cheap doesn’t make it a good deal. All over the media it is plastered that you can buy houses 60 cents on the dollar, and I had an investor tell me that he purchased a house for 25 cents on the dollar. So what does this actually mean when you are done. To give you some background on me, the last 6 months I have bought two foreclosed properties. I have a client who has bought 13 through me in the past 8 months, and have showed countless other foreclosed properties in the area. I am stating this because I want you to know that I have experience when dealing with these homes.
This first part I want to discuss is time. For every one of these homes that myself or my client has bought we probably looked at close to 20 in person and at least 50 on paper. I spend at least an hour a day reviewing houses and at least 3 hours a week going into and getting cost for repairs together. Next, it is usually a month to get these homes back to market or in rentable shape. So you need to make a real commitment if you are going to find a deal.
Next, cheap doesn’t necessarily mean a good deal. There are so many hidden costs in getting one of these homes back to market. You need to make sure that if you are doing the estimating you have a good handle on the costs, or you could hire an inspector, but that is going to run you about $300. This may be money well spent if you are going to be making a substantial investment in these homes. It should help speed your learning curve, and could save you thousands in mistakes further down the road. If you have a partner that has been remodeling for years, you will have an advantage here.
If you are looking at purchasing one as a home owner, you need to take extra care. Human instinct draws us towards advertisements like “Good Deal,” “Best Deal in Town,” “Discount,” and of course “Foreclosure.” What actually happens when you buy most of that cheap stuff. If breaks, it has some sort of defect that you may be able to live with but would be too costly to repair, in worst case scenarios, you could end up spending a lot more money to cover the mistake than it would of to put the extra money in up front. This can be a real issue in the foreclosure category.
I am going to give a real example of two houses located in the popular “Colonial Village” community. Both are +/- 1100 Sq. Ft. Cape Cods. One is a move in ready Cape Cod that sold for approx 83K and the other was government owned that sold for around 60K. These numbers I am giving are strictly my opinion, but I feel are an accurate representation of my point. The 83K house didn’t need anything, but lets say you didn’t like the color so you spent 2K to change it. Should be high, but it puts you into the house for 87K. You have the other cape cod that you just picked up for 60k. This home has been sitting with out any climate controls for months causing cracking of the plaster and leaving a lot of deferred maintenance. Here are the numbers off my bid sheet. For kitchen update we had $7500. Redo all floorings we had $2.5 per sq ft. This totals out to $2887. Bathroom we had $3100. Paint/drywall repair $3600. Landscape $1000. New Doors/trim $1900. This was because we needed to replace a slider and put trim through out the house. Mechanicals would have been $2200. The roof and fencing also needed maintenance at approximately $2000. This brings the total of repair to just under $23000. Let’s say it takes you two months to repair it. You will have at least a thousand dollars of holding costs or if you paid cash, lost opportunity cost.
If you add it all together it comes out to $84,000 that you would have effectively has into that home. So as a home owner you would have had two invest two extra months living somewhere else, and would have had close to the same money into your home. If you are really handy around a house (which is not me), this may be a great opportunity for sweat equity. If you haven’t done it before, think out your costs. My old football coach always said, “if it was easy everyone would be doing it.” Same scenario here.
This is not meant to scare you, but just to get you thinking. A foreclosed property may be your best bet. And when you look hard enough there are good deals that need minimal work. Be careful when you hear the word discount. Before you buy the “good deal” take time to assess your skills, and write down what your needs are before just finding a house. In other words, think about your lifestyle first, then find the property that suites that. If you have any questions, please feel free to email, or call me anytime. Good luck in your house hunting!

Doom's Day for Education

This morning at the Lansing Regional Chamber of Commerce Ryan Doom of the company WebAscender gave a great talk on the value of social marketing on the web. He gave a great example of how the sharing of knowledge verses keeping it a secret helped out a corporation in the mining industry that otherwise would have been in deep financial trouble.

I know that this isn't exactly real estate related, but it fits into the scope of this blog because Ryan and Webascender is the type of company that the Tri-County area needs. It is locally founded and is growing to become an asset in this region. Ryan mentioned that he is a member of the local Technology council that also has members from MC Squared Technology Group and Tech Smith to help educate local workers and bring more talented web designers into the area. This is a great way to help combat Michigan's Brain Drain from the state. Even with the soft state of our economy there are more and more signs of these businesses really starting to grow and be noticed. It was also exciting to see in the paper today the fact that another thirty million in grants are going out in June as part of the 21st century jobs fund. If real estate is to see another growth spurt in the area it is going to take more of these types of companies to grow and gives us large employment growth in the region.

Ryan's presentation covered the importance of social networking and showed the benefits of many of the websites and communities available online. He posted his presentation on his website www.webascender.com and his company could provide some guidance if you are interested in learning more about using Facebook.com, myspace.com, linkedin.com, wiki's, and blogs to as he put it "leverage the world." It is truly encouraging to see people like Ryan who believe in our community and working to help better the region. There has been a lot of exciting things going on in our region that will be covered in the next few weeks. I will be covering a new type of home being built that Mid-Michigan has not seen before, Lance Queen, a local bank expert just moved to a non-profit to help people with home purchasing, and John and Brad have moved to Keller Williams to bring a new level of service to their real estate careers. Again, if you have anything that you would like to learn more about or have a comment in general, please feel free to call me, email, or post a comment here. Have a great day, and thank you again Ryan for sharing your knowledge this morning.

Investor education key for success

An investor friend of mine from Dayton, Ohio informed me last week about a very interesting real estate site. www.reiclub.com is full of information for those of you who are looking to make real estate investing a long term goal. I will be adding it to my links on the the right side of this page. For those looking to make bids on HUD houses, it is going to be a week or two before the site is back up and running. Chapman announced on Saturday that they are turning Michigan back over to Michealson, Connor, & Buhl as of today. The short notice has left current accepted bids up in the air, but after talking with them today, it seems they will have it smoothed out soon. The new site, or old site if you bought or sold these a few years ago will be www.mcbreo.com. If you are interested in learning more about how to bid on these, please leave a question posted here, or email me at brentforsberg@gmail.com.

Lansing Housing Market Stabilizing

Good news for the Lansing Real Estate Market, we are finally seeing the amount of inventory on the market getting lower. In July 2007 our company found that there was approximately 15.35 months of inventory based on the amount of homes available divided by what had sold over the previous year. This information is based on data pulled from the Multiple List Service of the Greater Lansing Association of Realtors. A current snapshot using sales data from 2007 over current inventory shows that the amount of inventory has dropped to 13.2 months. This is still up from the beginning of last year, but hopefully it is a good sign of what this year will offer to us in the real estate market. New construction has also seen a significant drop. Currently there is approximately a 14.2 month supply of new homes in the Greater Lansing Area. This also shows a drop in the amount of supply currently available. Most of that is due most likely to the significant drop in permits pulled for new homes in 2007. We saw one of the lowest years for new permits pulled in the tri-county area since the early 1980’s.
In our communities we have around the Lansing area, we are also seeing an increase in the amount of traffic that is coming through the doors. We currently have three new homes being built in Lakeside, two getting ready to start in Williamston, and one that just completed in Mason. Even with an election year, it seems that barring an announcement of a major job catastrophe for the Lansing area, we have seen a turning point in our housing market.

Housing starts at 25 year low Good for Lansing

As housing starts continue to drop, some people might argue that this is further news of the real estate market falling off. Here is a link to the article at yahoo; http://biz.yahoo.com/ap/080117/economy.html This is simple supply and demand. We built a few to many houses in the U.S. over the last few years, and simple economics states that as demand fell off, prices are going to fall, and production will slow. This should mean that we will finally see some of the market inventory start to reduce. We have seen a steady increase in inventory over the last few years in Lansing. This should be the year where we see that number stabilize and start to decrease.
What this area needs is job creation. We have seen some positive signs of growth with the revitalization of the downtown buildings and several of the companies in the area growing employees. The West side GM and Grand River Plant are producing award winning vehicles and our housing starts are at a 25 year low. This is a good formula for the Greater Lansing Real Estate Market. We already are the strongest economic region in Michigan based on unemployment. We should look forward to a stabilization of our real estate market over the next 12 to 14 months.
Also congratulations to Coldwell Banker Hubbell and Briarwood Realty for the Merger. Both Bob Hubbell and Bill Mcleod are great businessmen and I am sure that the combining of these companies will be great for our community. They both have exciting projects going on around town with the Stadium District, Point West, and many other new construction communities. I hope the merger goes smoothly and the combined company has continued success.

Despite National Gloom, Lansing Real Estate Shows Life.

If you did not get a chance to read the business section of the local paper today, it wasn't great news for the new construction housing industry. The Articles title was "New Home Sales Plunge." It is interesting to see that according to data collected by the Commerce Department, the Midwest saw a decline of 27.6 percent from October to November. I found this interesting since November this year was one of our busiest months. In our community Lakeside, we welcomed three new neighbors that are all in the process of building their homes. I find it interesting that the paper has a quote from Richard Yamarone a national economist that states "This is one sector of the economy that doesn't show any signs of life." It is interesting because the U.S. is still on pace to sell 647,000 new homes this year. It might not be the million homes that we topped a few years ago, and I am not saying that this is a healthy market. I just don't think that it is fair to say that here is no sign of life.
Locally, many of the bankers and Realtors that I have talked to have been very happy with the level of activity going on right now in our market. One builder we work with is putting in five more basements for customers before the end of January. I bring this up, because these are positive spots in our local area that you won't hear about in our main media streams. I know that homes aren't valued as high as they were a few years ago, and if you are a seller that sales are not as strong as they were. Even so, there is life in the real estate market and homes are still selling. The market will come back, and we will see real estate values rise in the future. What this region needs to focus on is job growth and stability. More jobs in the region mean a greater demand for housing helping marketing times and values.

More on Green in Lansing

If any of you have not had a chance to check out the new online Magazine for Lansing, Capital Gains, add this to your favorites. This company has had great success in other markets doing positivie news stories showing what is going good in cities across the U.S. They started this fall in Lansing and are off to a great start. I have linked to an article that they have put together on Green Building and LEED Certification. http://www.capitalgainsmedia.com/features/leed0109.aspx This gives a lot of information on what the different developers in Lansing are doing. There are also many other articles on different neighborhoods and other activities going on in the Greater Lansing area. I will put a link in my publications section on right side of this page.

Market hangover brings valuable lessons

Last night I was at a Christmas party at Dublin Square. I think out of the two hundred or so people there, 199 asked me, “so how’s the market right now? “ I respond with the same generic answer “slow in some segments, but steady in others.” Lately in Lakeside, I have been able to say we have three homes under construction for new neighbors out there. This really seems to open eyes when people hear that comment. They think housing is at a complete stop. The truth is, this market is not dead. We are seeing people still buying nice homes, the difference is, they are getting more value for the dollar. The party of the housing boom is over, and the United States housing market has finally awoken with a huge hangover. Unfortunately, some people got hurt when they fell victim to predatory lending. Others really thought the housing market would never crash and bought more than they could afford because they felt that the appreciation would bring them riches in the future. This is going to hurt for a little while nationally, but hopefully we can take a few lessons from this situation. I know I will be more careful on how little equity I leave in one of my properties so should I need to sell it fast I won’t be in a position to bring money to close. As goods become more expensive and gas prices raise again, this is a good time for all of us to readjust our budgets, and put together a program for a rainy day. A home is still a good investment if you need a place to live, but listening to a Rich Dad tape, Robert explains how a house is really a liability as a personal investment for our future. I did not understand this at first, especially being in the real estate profession. We are taught to show the tax advantages, appreciation values, and all of the other benefits that come on paper from owning a home. These are all true, but after watching the foreclosure rate, it all comes down to the simple fact of how much money is coming in the door versus what is going out. It is unfortunate that so many people are learning this at the expense of their homes.

Goal Setting

As the new year rapidly approaches many people begin to work on their New Years Resolutions, or goals. Goals are something that our office takes very seriously. Through out the year we are constantly reassessing our goals, both within the company and individual employees work and personal goals. A few years ago some of the other agents and myself attended a seminar by a gentleman names Brian Tracy. If you have not heard of him, he is probably one of the best motivational speakers I have ever heard. I have included a link to his website on this blog site, and I am also going to post the notes below that we took from the seminar on goal setting. If you are looking for some direction on self actualization and goal setting, I highly suggest looking through Brian Tracy’s materials. We also have some goal templates that we use in the office, if you are interested in receiving a copy, please email me at brent@lansingrealestate.com, and I will be more than happy to send you one. If you have any tips regarding goal setting please feel free to post them here.
12 Steps:

1) Desire/Need – The force that compels us toward our goal. It is always personal or selfish.
2) Belief – Most important element. You must believe you can achieve. Make your goals challenging so they cause you to stretch yourself (gets you out of your comfort zone).
3) Write it down – This is a way to program it into your subconscious. Write in complete details exactly as you wish to have it. Have a very clear representation.
4) Determine benefit – How will you benefit from achieving your goal? This will help you see more reasons to achieve your goal.
5) Analyze your position – See where you’re at. Where you’re beginning.
6) Set a deadline – What is the latest outside date to achieve goal. You should be able to measure how long it will take to accomplish and measure your success. You should see progress along the way and get a feeling of being a winner.
7) Identify Obstacles – What will you have to overcome? There are always obstacles. Write down what these are.
8) Identify knowledge required – What knowledge do you need to obtain your goal?
9) Clearly identify people needed – THREE LAWS OF RETURN:
1. Law of Return: Sewing & Reaping – more you put in/more you get out.
2. Law of Compensation – Every action gets an equal reaction (get what you give).
3. Law of Service – Can only get success by serving others (go extra mile). More Blessed to give then to receive. More profitable to give then to receive.
10) Take all steps – Make a plan and write down all activities. Prioritize your time – 1st, 2nd, etc. Continually go back and re-prioritize.
11) Clear mental image – Should already have obtained this and should already be in existence. Play the mental picture in your mind daily!!
12) Back plan with determination & persistence – Don’t give up!! Know that there will be setbacks. Winners pick themselves up. Self-discipline is persistence in action.

Market report on Lansing housing supply

I apologize for not getting the investor interview posted, I have had some scheduling conflicts with getting the interview done. I am hoping to record it this week. I have just run a market report for my company using the Realtor multiple list data. I do this every couple of months to try and keep a pulse on our local market. When I ran these numbers in July we had seen a constant rise in the amount of homes available on the market of both existing homes and new homes. This has been right in line with the national numbers that we have all seen on T.V. and in the papers. As of the end of November there were currently 4978 residential properties listed in the MLS. Looking at the amount of homes sold year to date, this means there is currently just over 14 months worth of housing stock available in the greater Lansing area. This is about a month more of supply than was available earlier this year. We are starting to see the market stabilize especially in new construction where permits pulled for new homes have declined more than 40% year over year for two years in a row. For the first time since the early 1980’s we may see less than 600 new homes built in this area. If you are interested in buying a home, it has been over twenty years since we have had this strong of a buyers market. I have many homes that come across my desk daily that would be a good buy, and there have been several that are almost steals. Whether you are looking for a home to live in, or for an investment, now is the time to really start doing your homework and seeing what’s out there. It might not be the best time to flip properties, but if you can buy and hold, it will be worth it in the future. You can start looking at properties by going to www.lansingrealestate.com and clicking on the home search function. If you are interested in learning more about investing I have a few good links on the side of this page you should check out. If you have any questions, please feel free to send me an email at brent@lansingrealestate.com or call my office at (517) 349-9330 ext. 206. Have a great day.

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.

10/19/2007 Regional Changes in Lansing

As we are constantly reminded of budget deficits, tax issues, and the automotive industry doldrums in the State of Michigan, under the radar Mid Michigan has seen a lot of small start up growth.
Lansing has had an exciting week of announcements. Accident Fund is working on finally coming up with a solution for the vacant Ottawa plant building and bringing it back to a community asset. Pat Gillespie has yet again shown that Lansing has the potential to really shine as an urban core with reclaiming more of the riverfront and turning it into a destination spot for the tri-county area. The entire region has seen some real changes for the enhanced quality of life. Old town just received national recognition from Ikea thanks to the support of the entire Lansing community getting together and voting. The festivals located there are packed with people and activities. REO town has started their Labor Day festival that brings in local and national bands that was truly a great time.
Many of the smaller communities in the area have events that attract hundreds to thousands of people. DeWitt has their Harvest fest coming up and the next few months will be full of Chili cook-offs and holiday celebrations across the region. Over the past decade people have really began to realize how important the fabric of the community is to the quality of life for all of its members. As you drive into the downtowns of our local cities, the streetscapes are being improved and many of the towns are very walk able and full of many exciting small businesses. I am sitting in the downtown Mason coffee shop and bookstore, looking at the town square and admiring the building facades that are all being renovated and the ones that are already restored. Even though its raining, people have been coming in and out of the coffee shop, and quite a few people are walking in and out the of the businesses and shops here.
Right now, downtown Lansing is hard to get in and out of due to the road construction. Next time you go down Washington though, notice how almost every building on the street is either restored, or in the process of being so. All of those second and third stories that were sealed in a metal shell for decades are now being re-utilized into lofts for residents and small businesses. As little as two years ago when you went downtown after five, you would be one of just a few people walking in what looked like a ghost town. Now, there are lines in front of the clubs to get in, the restaurants are starting to get busy, and the coffee shops have people enjoying a cup either before or after they get on with their days. Our region has seen our quality of life enriched with so many different types of activities and the towns all working to make their shopping districts more pedestrian friendly.
I am excited that this doesn’t seem to just be a trend, but a change in our daily lifestyle. As the world becomes more connected economically and many companies are competing for market share in regions and countries that it may not have been possible to do even 5 years ago, people are also realizing how important it is to support and build the local economies, to make sure that we keep the quality of life that we have created here. We have a great balance of businesses that compete on the international, regional, and local level. I hope we continue to see the business growth in the region, and the continued improvement of our cities and towns as we move forward. I really enjoy being a part of the tri county community, and want to know about what you find enjoyable here. Please email me the highlights of your experiences here in Mid-Michigan. What events, festivals, and businesses do you enjoy that adds to your quality of life here? Let me know at brent@lansingrealestate.com and I will get the answers posted. You can also post a response immediately at www.lansingrealestateopportunities.blogspot.com. Have a great weekend, and I look forward to reading what experiences you enjoy in Mid-Michigan.